Sales Rise 7% at Estee Lauder

For the six months ended Dec. 31, 2012, the Estée Lauder Companies Inc. reported a 5% increase in net sales to $5.48 billion. Net sales grew in each of the company’s geographic regions and major product categories.

Fabrizio Freda, president and chief executive officer, said, “Our performance this quarter reflected the global appeal of our brands in all regions. These results demonstrate our ability to continue to grow, on top of the double-digit trends we generated in the prior year, even in the face of macro-economic headwinds and challenges in certain international countries. Organic sales growth for the quarter was in line with our expectations, while earnings per share exceeded our forecast.

“We began the second half of our fiscal year by successfully launching another wave of our Strategic Modernization Initiative in early January, a key driver to achieving additional long-term efficiencies. Our recent increased strategic marketing spending behind key innovations and existing winning products in countries with good momentum should help drive sales growth in coming months. We expect continued solid growth in the U.S., many emerging markets and e-commerce and improving trends in travel retail. For the full fiscal year, we are re-affirming our sales growth forecast of between 6% and 7% in local currency, while raising our earnings per share guidance to $2.51 to $2.59.”

The global prestige beauty industry continues to experience mixed results and overall growth has slowed from the prior year as the Company expected. Nonetheless, the company’s performance was broad-based, generating local currency sales gains in each of its geographic regions and major product categories. Sales growth was solid in the US States and certain developed countries and strong overall in emerging markets.

By category, net sales: Skin care, approximately $32 million; makeup, approximately $23 million; fragrance, approximately $8 million and hair care, approximately $1 million. Reported net sales in skin care, makeup, fragrance and hair care would have increased 7%, 4%, 2% and 8%, respectively.
Operating income: Skin care, approximately $27 million; makeup, approximately $20 million; fragrance, approximately $7 million; hair care, approximately $1 million. Operating results in skin care, makeup, fragrance and hair care would have increased/(decreased) 6%, (1)%, (4)% and (34)%, respectively.

For the full year, net sales are forecasted to grow between 6% and 7% in constant currency.