Estee Lauder Posts Upbeat Q4 Profit, But Sales Drop

Estee Lauder Companies Inc

reported better-than-expected earnings for its fiscal fourth quarter. However, the company issued a weak forecast. The New York-based company reported quarterly net earnings of $153.0 million, or $0.40 per share, compared to $257.7 million, or $0.66 per share, in the year-ago period. Its net sales slipped to $2.52 billion from $2.73 billion. However, analysts were expecting earnings of $0.34 per share on revenue of $2.57 billion. The company's sales in skin care business dropped 16 percent to $1.01 billion, while sales in makeup business declined 4 percent to $1.02 billion. Fragrance business sales climbed 9 percent to $336.1 million in the quarter, while sales in hair care business rose 4 percent to $139.8 million. Fabrizio Freda, President and Chief Executive Officer, said, "Today, our Company is more balanced, resilient, and agile and has demonstrated its ability to produce consistent and sustainable results. Together with our powerful brand portfolio and financial discipline we finished our fiscal year with a strong fourth quarter, generating 7% constant currency sales growth, after adjusting for the accelerated sales orders we reported in fiscal 2014. One of the great strengths of our Company is our ability to successfully execute our well-defined strategy. This was clearly evident in fiscal 2015 as we once again delivered strong results despite considerable macroeconomic headwinds and challenges." For the first quarter, Estee Lauder expects net earnings, including the negative impact of foreign currency translation and acquisitions, of $0.66 to $0.69 per share. The company expects Q1 constant currency earnings of $0.75 to $0.78 per share, and net sales growth of 13 percent to 14 percent in constant currency. Analysts projected earnings of $0.81 per share. For full year fiscal 2016, Estee Lauder projects constant currency earnings of $3.28 to $3.35 per share and net sales growth between 8 percent and 10 percent in constant currency. Estee Lauder shares fell 2.03 percent to $87.02 in pre-market trading.