NEW YORK — Fred Langhammer’s tenure as chief executive officer of Estée Lauder Cos. has seen historic highs as well as tough times.

Under Langhammer, Lauder breached the $5 billion annual sales barrier for the first time. At the same time, however, the economic turmoil of the last three years resulted in a sharp decline in the value of the company’s shares.

Soon after he took the helm in January 2000, shares of the firm reached a high of around $53 in New York Stock Exchange trading. A struggling economy, terrorist attacks and the tumbling stock market conspired to push share prices down to lows of around $25 in December 2002, a fall that closely mirrored declines experienced by the Standard & Poor’s 500 Index during the same period.

However, the company has already rebounded sharply. For the fiscal year ended June 30, 2003, earnings shot up 50 percent to $319.8 million, or $1.26 a diluted share, before adjusting for the effects of an accounting charge. Comparatively, the company reported earnings of $212.5 million, or 78 cents, in 2002.

Sales for the year increased 7.9 percent to $5.12 billion compared with $4.74 billion in 2002.

Results from the company’s most recent quarter, ended Sept. 30, promised continued growth. For the first quarter the company reported a 4.9 percent gain in net income to $77 million, or 33 cents a diluted share, from $73.4 million, or 28 cents, a year ago. Net sales for the three months pushed up 8.8 percent to $1.35 billion from $1.24 billion last year, as the company experienced sales growth across all product categories, in most geographic markets and from currency fluctuation, as well. In local currencies, sales gained 6 percent.

The company is also moving ahead with its strategic alliance with Kohl’s Corp. to create and manage color cosmetics and skin care departments in Kohl’s stores beginning this fall. Lauder confirmed that it is investing $15 million in fiscal 2004 primarily to develop the new business with the Menomonee Falls, Wis.-based department store chain.

By product category in the first quarter, recent launches of wrinkle and refinishing creams elevated sales of skin care products 10 percent to $462.9 million, or 7 percent before giving effect to currency translation. Makeup sales rose 6 percent to $494.1 million, or 4 percent in local currencies; fragrance sales grew 12 percent to $331.1 million, or 9 percent in constant currency, and hair care products saw sales improve 9 percent to $54.8 million.

This story first appeared in the January 7, 2004 issue of WWD. Subscribe Today.

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William G. Schmitz, Deutsche Bank North America, said of the management change: “It was a foregone conclusion that this would happen. I just didn’t think it was going to happen so quickly. William [Lauder] was only the [chief operating officer] for a year. Langhammer never really got a chance to run the company in a good economy.”

As for an Estée Lauder Cos. under William Lauder, Schmitz said, “If you look at what William did, he’s always the guy in charge of alternative development. He’s the retail strategist. He’s the guy who’s going to push this Kohl’s thing forward. He’ll probably concentrate on doing more of that.”

Lauder shares fell 41 cents, or 1.1 percent, to close at $38.22 in Tuesday trading.