Cosmetics maker Estee Lauder Companies Inc. (EL) on Friday reported a profit for the first quarter that surged 36% from last year, reflecting a 14% increase in sales and fewer charges as compared to last year. Buoyed by the results, the company raised its earnings and revenue growth outlook for fiscal year 2011.
The New York-based company's net earnings for the first quarter were $191.1 million or $0.95 per share, up from $140.7 million or $0.71 per share last year.
The just concluded quarter's results include restructuring charges of $0.02 per share, much lower than $0.14 per share recorded last year.
Excluding one-time items, net earnings for the quarter rose to $194.4 million or $0.97 per share from $168.0 million or $0.85 per share in the prior-year period. The company was projecting first-quarter earnings, excluding one-time charges, of between $0.67 and $0.80 per share.
On average, eighteen analysts polled by Thomson Reuters expected the company to report earnings of $0.77 per share for the quarter. Analysts' estimate typically exclude special items.
Net sales for the first quarter were $2.09 billion, up 14% from $1.83 billion in the comparable prior-year period. The company had earlier forecast net sales to increase between 11% and 13% in constant currency. Excluding the impact of foreign currency translation, net sales increased 15%. Analysts had a consensus revenue estimate for the quarter of $2.02 billion.
Fabrizio Freda, President and Chief Executive Officer of Estee Lauder, said, "We had an excellent quarter and made a strong entrance into fiscal 2011 with solid, double-digit top and bottom line growth. Our results included acceleration in the U.S., where we generated robust sales growth, and continued strong gains from our international business. Strong worldwide demand for our products resulted from our superb innovations, supported by targeted advertising and our high-touch selling model."
Sales growth was led by the company's international businesses, particularly in travel retail and emerging markets. Net sales grew in the company's skin care, makeup and fragrance categories, which more than offset a modest decline in hair care.
Looking ahead, Estee Lauder forecasts net earnings for the second quarter, including charges associated with restructuring activities, in a range of $1.28-$1.41 per share. Net earnings for the quarter before charges associated with restructuring activities are projected to be between $1.32 and $1.45 per share. Analysts expect the company to earn $1.37 per share for the quarter.
The company expects net sales for the second quarter to increase between 8% and 10% in constant currency.
For fiscal year 2011, Estee Lauder raised its earnings outlook and now projects net earnings before charges associated with restructuring activities in a range of $2.90-$3.10 per share, compared to the prior range of $2.80-$3.05 per share.
The company now forecasts net earnings per share, including charges associated with restructuring activities to be between $2.67 and $2.90. This compares to the earlier forecast in a range between $2.62 and $2.90 per share.
Analysts expect the company to earn $3.06 per share for the year.
Net sales for the year are now forecast by the company to grow between 7% and 9% in constant currency, compared to the earlier forecast for net sales growth between 6% and 8% in constant currency.
EL closed Thursday's regular trading session at $64.41, down $0.36 on a volume of 1.46 million shares. In the past 52 weeks, the stock has been trading in a range of $40.13-$71.29.
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