Estee Lauder (EL) more than doubled its third-quarter profit, as strong sales growth across the globe and tighter expenses weren't hampered by weaknesses in Japan deriving from the catastrophic earthquake.
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The company even raised its fiscal view, despite predicting negative impacts on its Japanese sales for at least six to nine months.
The New York-based seller of Clinique, MAC and Bobbi Brown products reported on Thursday net earnings of $124.7 million, or 62 cents a share, compared with $57.5 million, or 28 cents a share, in the same quarter last year. Excluding one-time items, the company earned 71 cents a share, matching average analyst estimates polled by Thomson Reuters.
Revenue for the three months ended March 31 was $2.16 billion, up 16% from $1.86 billion a year ago, beating the Street’s view of $2.05 billion.
Heading the sales growth was across-the-board improvements in its geographical regions, as well as heightened demand for its makeup products, which climbed 24% to $878.2 million. The company’s skin care and hair care units were both up 14%.
In a statement, the company said it made “substantial progress” on its previously announced strategic goals, including tightening operating expenses and reducing non-value added costs.
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“Our results for the quarter and year to date continue to validate our strategic direction,” Estee Lauder CEO Fabrizio Freda said in a statement. “Our broad and well differentiated portfolio of brands, product categories and geographies gives us the flexibility to take advantage of opportunities in stronger environments to compensate for challenges that may arise in other areas of the world.”
Estee Lauder said the March 11 earthquake and tsunami in Japan did not materially impact its quarterly results, though Japanese sales did contract about 4%.
Looking ahead, Estee Lauder predicts a full-year negative impact on total sales from the Japanese disaster of about a half a percentage, and said it will likely feel negative impacts for at least six to nine months.
For the fiscal year, Estee Lauder raised its non-GAAP earnings forecast to the range of $3.55 to $3.65 a share, just below analyst estimates of $3.66 a shear. It continues to anticipate sales growth across its geographical regions.