DOW JONES NEWSWIRES
Estee Lauder Cos. (EL) swung to a fiscal fourth-quarter loss as
the beauty products company was hit hard by restructuring charges
and weak sales.
The company also projected results for the current quarter above
analysts' estimates as the new year's outlook was basically in
line. Fiscal first-quarter earnings are seen at 23 cents to 30
cents a share, on net sales falling 5% to 9%. Analysts were looking
for a 16-cent profit and revenue falling 10% to $1.72 billion.
For the year, Estee Lauder expects earnings excluding
restructuring charges of $1.55 to $1.70 a share with revenue up as
much as 3%. Analysts polled by Thomson Reuters were expecting
earnings of $1.70 on 1% sales growth to $7.39 billion.
The beauty products industry has suffered as consumers continue
to curb spending. New Chief Executive Fabrizio Freda, a former
Procter & Gamble Co. (PG) veteran who joined the cosmetics
giant last month, has taken on the challenge of reducing Estee
Lauder's dependence on faltering U.S. department stores. In a
streamlining move, Estee Lauder early this year said it would slash
6% of its work force.
For the quarter ended June 30, the company posted a loss of
$17.9 million, or 9 cents a share, compared with a year-earlier
profit of $120.2 million, or 61 cents a share. Excluding
restructuring charges, the latest quarter's earnings would have
been 20 cents.
Net sales tumbled 16% to $1.68 billion, with six percentage
points due to currency changes.
Analysts expected a 20-cent profit and revenue of $1.72
billion.
Gross margin fell to 74.6% from 75.6% amid the sales
declines.
The sales slump was most acute for fragrances, which reported a
35% slump, pushing the segment into the red. The much-larger
skin-care and makeup businesses reported drops of 13% and 12%,
respectively, with profit falling sharply.
Shares closed Wednesday at $37.64 and were inactive premarket.
The stock has soared 90% from an early March low.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com;