The Estee Lauder Companies Inc. (EL) raised its forecast for the second quarter of fiscal 2010. The company now expects earnings in the range of $1.23 to $1.30, on sales growth of 10%-11%. The previous guidance was for net sales growth of 0%-3% and earnings of 80-87 cents per share. The company attributed the revised forecast to stronger net sales, favorable product mix and lower spending levels.
Better-than-expected sales performance is being driven by continued growth in Asia, successful new innovation, and improved results from the company’s travel retail business and the holiday season in the U.S. In addition, a favorable impact of foreign currency translation contributed to the company’s top-line in the quarter.
The lower spending in the quarter reflects caution in many of the company’s businesses given the extent of the global economic downturn and the potential risks in the near term. The company maintained a measured approach to investing, particularly in advertising and promotion.
However, to sustain competitiveness, the company said that it plans to accelerate investment spending behind its brands and key priorities in the second half of the fiscal year.
Estee Lauder Companies is one of the world’s leading manufacturers and marketers of skin care, makeup, fragrance and hair care products.
The company is scheduled to report its second-quarter results on January 28, 2010.
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