Estee Lauder (EL) reported robust first-quarter 2011 results with earnings of 95 cents per share. Earnings (excluding one-time items) were well above the Zacks Consensus Estimate of 77 cents and soared 14.1% from 71 cents delivered in the prior-year quarter.
The New York-based Estee Lauder now expects second-quarter 2011 earnings (excluding one-time items) in the range of $1.32 to $1.45 per share.
The company raised its full year guidance for earnings to the range of $2.90 to $3.10 per share from $2.75 per share previously. The Zacks Consensus Estimate for fiscal 2011 is $3.06.
Revenue and Quarterly Details
Net sales for the quarter grew 14.1% year-over-year to $2.09 billion from $1.83 billion in the prior year quarter. The company posted sales gains in three of four of its its major product categories and across all of its geographic regions.
Strong sales growth came from the company’s international businesses, particularly in travel retail, Asia/Pacific and emerging markets. Revenues were also above the Zacks Consensus Estimate of $2.02 billion.
Management expects second-quarter 2011 revenue to increase between 8% and 10% in constant currency. For the full fiscal 2011, the company expects revenues to grow in the range of 7% to 9% in constant currency compared to 6% to 8% earlier.
By product categories: Skin Care product sales rose 17.4% to $857.7 million; Makeup sales jumped 10.6% to $794.2 million; Fragrance product sales inched 14.8% to $334.5 million; and Hair Care product sales fell by 3.6% to $94.4 million.
By region: sales in the Americas rose 11.8% to $997.2 million; in Europe, the Middle East & Africa sales surged 13.1% to $680.9 million; and sales in the Asia/Pacific region hiked 15.6% to $413.6 million.
Cash Flow and Balance Sheet
For the full fiscal, 2010, net cash flows provided by operating activities reduced to $39.1 million from $2.7 billion in the prior year. The decrease was attributable to higher working capital requirements. The company has a debt to capitalization ratio of 36%.
As part of a four-year strategic plan (fiscal years 2010 – 2013), which includes trimming of headcount, and realigning and optimizing the structure of the geographic regions resulted in $49 million savings during the first quarter 2011.
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