LAUDER NET UP 7.8%
Byline: Evan Clark
NEW YORK — Strong European sales helped The Estee Lauder Cos. Inc. weather poorer economic times at home and post a 7.8 percent increase in third-quarter earnings.
Net income for the quarter was $65.1 million, or 24 cents a diluted share. This compares to $60.4 million, or 22 cents, a year ago. Wall Street was looking for earnings of 23 cents a share from the company based here.
Revenues for the period ended March 31 rose 6 percent, to $1.10 billion from $1.04 billion in the year-ago quarter. Excluding the effects of foreign currency translation, sales rose 9 percent.
Sales of makeup products rose 10 percent, to $464.1 million, while skin care sales were up 4 percent, to $419.1 million. Fragrance sales declined 4 percent, to $172.9 million, with ongoing weakness in Tommy Hilfiger fragrances more than offsetting strength in the Intuition international rollout.
The Americas region saw sales increase 4 percent, to $686.5 million, which Fred Langhammer, chief executive officer described as “somewhat disappointing.” However, international results more than compensated. The Europe-Mideast-Africa region saw sales increase 14 percent, to $282.4 million, or 21 percent on a constant-currency basis. Sales in the Asia-Pacific region increased slightly, to $132.8 million, but 10 percent in local currency.
Carol Warner Wilke, an analyst with Credit Suisse First Boston, said the firm’s domestic business, while not as strong as it has been, did improve, and that Lauder’s “European sales, particularly, were much better than expected.” The firm’s retail stores and new brands have also been robust, she added.
For the nine months, earnings jumped 10.9 percent, to $284.8 million, or $1.10 a diluted share, from $256.9 million, or 99 cents, a year ago. Sales for the period rose 6 percent, to $3.57 billion, compared to $3.37 billion a year ago.