×
6 638
Fashion Jobs
OYSHO
New Store Opening - Oysho White City - General Manager
Permanent · LONDON
HARRODS
Uniformed Security Officer
Permanent · LONDON
HARVEY NICHOLS HEAD OFFICE
Ecommerce Director
Permanent · LONDON
NEXT
Sales Coordinator - Galashiels
Permanent · HUDDERSFIELD
SPORTS DIRECT
Loss Prevention Supervisor
Permanent · LEICESTER
SPORTS DIRECT FITNESS
Assistant General Manager - Everlast Fitness
Permanent · BURY ST EDMUNDS
SPORTS DIRECT FITNESS
General Assistant - Everlast Gyms
Permanent · BURY ST EDMUNDS
SPORTS DIRECT FITNESS
General Manager - Everlast Fitness
Permanent · RUGBY
EVERLAST GYMS
General Manager - Everlast Fitness
Permanent · STOKE-ON-TRENT
AESOP
Retail Consultant | Full-Time | Aesop st James Quarter, Edinburgh, Scotland
Permanent · London
HEAD OFFICE
Merchandise Planner – Food & Grocery Merchandising
Permanent · BRACKNELL
HEAD OFFICE
Digital Product Manager
Permanent · LONDON
NEXT
Delivery Coordinator - Llandudno
Permanent · LLANDUDNO
NEW LOOK
Sales Manager
Permanent · STRETFORD
EVERLAST GYMS
General Assistant - Everlast Fitness
Permanent · NETHERFIELD
CANADA GOOSE
Security Ambassador- Part Time
Permanent · MANCHESTER
JOHN LEWIS
Loss Prevention Partner
Permanent · DARTFORD
HARRODS
Digital Production Manager
Permanent · LONDON
HARRODS
Senior Mechanical & Electrical Project Manager
Permanent · LONDON
NEXT
Delivery Coordinator - Lincoln Valentine Retail Park
Permanent ·
HARVEY NICHOLS BRISTOL
Security Guard - 40hrs
Permanent · BRISTOL
HARVEY NICHOLS KNIGHTSBRIDGE
Brand Consultant - Dries Van Noten
Permanent · LONDON
Ads
By
Reuters
Published
May 3, 2007
Reading time
2 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

Estee Lauder profit up but weak sales hit stock

By
Reuters
Published
May 3, 2007

By Aarthi Sivaraman

NEW YORK (Reuters) - Cosmetics maker Estee Lauder Cos. Inc. reported higher quarterly profit Thursday on strong business in Europe and Asia, but disappointing U.S. sales sent its shares tumbling as much as 10 percent.

Earnings at the company, known for its Aveda, Clinique and Bobbi Brown brands, rose to $93.9 million, or 45 cents a share, in the fiscal third quarter ended on March 31, from $59.5 million, or 28 cents, a year earlier.

Analysts on average had expected profit of 46 cents a share, according to Reuters Estimates.

Net sales increased 7.1 percent, to $1.69 billion, helped by strong sales of new skin-care products like Continuous Rescue Antioxidant Moisturizer and Repairwear Lift, and new makeup such as Full Potential Lips and Projectionist High Definition Volume Mascara.

But the New York-based company reported weakness in core brands, in fragrances, and in the United States, as it felt a lingering squeeze after Federated Department Stores Inc. FD.N, which owns Macy's and Bloomingdale's, shut several stores to consolidate after its acquisition of May Department Stores.

"(The) Americas region and each of our product categories except hair care were adversely impacted by fewer department store doors resulting from the merger," Estee Lauder Chief Executive William Lauder said during a conference call with investors.

U.S. sales fell 1.5 percent to $856.9 million in the quarter. But net sales rose as more than half of sales and operating income came from a mix of established and emerging markets outside the United States, Lauder said.

The company's shares were down $4.10, or 8 percent, to $46.90 in afternoon trade on the New York Stock Exchange after falling as low as $45.75 earlier in the session.

EXPECTED FALL

Analysts had expected U.S. sales to be higher.

"In a quarter where most companies in the sector beat guidance, this result will disappoint, especially after a big run in Estee Lauder shares," Bear Stearns analyst Justin Hott wrote in a research note. He rates the company's stock "peer perform."

"The Americas sales were weaker than we thought, as we had expected flat," Morgan Stanley analyst William Pecoriello wrote in a note to investors. He rates the stock "equal weight."

Estee Lauder said its Clinique and namesake brands are expected to do well going forward, and it forecast fiscal 2007 sales would increase 6 to 7 percent, with earnings from continuing operations at $2.15 to $2.20 per share.

There is great "untapped potential" in the travel retail channel, such as airport stores, where the company already derives high profit margins, Estee Lauder said.

Boosting international performance could be a way to lift sales in the coming quarter, one analyst said.

"We believe that the disappointing third-quarter performance will energize management to accelerate its search for growth opportunities in international markets," Credit Suisse analyst Filippe Goossens wrote in a note. A likely strategy is acquisitions, he added.

Estee Lauder rival Avon Products Inc. , which sells cosmetics directly to consumers, posted better-than-expected quarterly earnings earlier this week. Smaller rival Nu Skin Enterprises reported a quarterly profit on Thursday, reversing a year-earlier loss.

© Thomson Reuters 2022 All rights reserved.