Estée Lauder posts increase in Q1 net sales and earnings

The Estée Lauder Companies Inc. recorded net sales of 3.52 billion dollars, an 8 percent increase for its first quarter driven by growth in nearly all product categories, geographic regions and channels. Excluding the impact of currency translation and the adoption of the new revenue recognition accounting standard (ASC 606), the company said, net sales increased 11 percent. Net earnings rose 17 percent to 500 million dollars. Diluted net earnings per common share increased 17 percent to 1.34 dollars, while adjusted diluted earnings per common share, before the 0.06 dollar impact of ASC 606 were 1.47 dollars, up 22 percent or 24 percent in constant currency.

Commenting on the first quarter trading, Fabrizio Freda, the company’s President and CEO, said in a statement: “We are operating in a challenging macro environment with many economic and geopolitical risks, but we are confident in the strength of our business strategy, the quality of our products, the desirability of our brands and our ability to execute with discipline and agility. With our strong first-quarter results and exciting upcoming launches and programs, we are raising our EPS guidance for the year.”

Estée Lauder guidance for second quarter and full year

For the second quarter, the company expects reported net sales to increase between 4 percent and 5 percent, including a 2 percent impact from currency translation and a 2 percent impact from the adoption of ASC 606. Excluding these items, net sales are expected to grow between 8 percent and 9 percent. Reported diluted net earnings per common share are projected to be between 1.37 dollars and 1.41 dollars. Excluding restructuring and other charges and adjustments, diluted net earnings per common share are projected to be between 1.47 dollars and 1.50 dollars.

Reported net sales for the full year are forecasted to increase between 4 percent and 5 percent versus the prior-year period, which includes a 2 percent impact from currency translation and 1 percent from the adoption of ASC 606. Excluding these items, net sales are forecasted to grow between 7 percent and 8 percent, at the high-end of the company’s long-term growth goal of 6 percent to 8 percent. Reported diluted net earnings per common share are projected to be between 4.40 dollars and 4.53 dollars. Excluding restructuring and other charges and adjustments, diluted net earnings per common share are projected to be between 4.73 dollars and 4.82 dollars.

Picture credit:Brunswick Group

 

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