Estee Lauder profits double on restructuring
Sales for the quarter rose to $2.26bn, up from $2.04bn in the corresponding quarter last year, which represented growth of 6 percent excluding the positive impact of foreign currency exchange.
Likewise net earnings increased by 89.8 percent to $396.9m, compared to $209.1m for the corresponding quarter, while operating earnings rose by 47.8 percent to $399.6m, up from $270.3bn.
The company said that its earnings were significantly boosted by cost reductions attributable to its restructuring, which delivered estimated savings of $83m during the quarter.
Guidance raised on strong Asian and travel retail results
Last week the company raised its guidance, as preliminary results showing a stronger performance in Asia and at the all-important travel retail business, combined with stronger holiday sales made results look more promising.
The company also reported that some of its more expensive brands such as Clinique and Aveda, which have been hard hit by falling consumer spend during the course of the year, were starting to show signs of improvement.
However, despite the gains, the company said that it continued to be affected by the ‘challenging and volatile economic conditions’ experienced in all product categories and geographic regions.
Caution, despite the gains
“While certain businesses have shown signs of improvement, and the economic challenges and some external uncertainties have abated, we remain mindful that they have not completely disappeared,” said CEO Fabrizio Freda.
For the full fiscal year ahead the company is predicting revenue growth of 3 – 5 percent, which should see sales in the region of $7.54bn - $7.69bn, with growth likely to be led by the Asia-Pacific region, backed up by Europe.
Net savings from its restructuring plan during the fiscal year are expected to be in the range of $275m - $300m.
