The Strategist

Estee Lauder shares jump record high

02/06/2019 - 09:36

American cosmetics company Estee Lauder Cos Inc reported a sharp increase in profits in the second quarter of the current fiscal year and raised its forecast for the 2019 financial year as a whole.

Estee Lauder shares jumped 14% in price at the start of trading on Tuesday, at a record pace in seven years. Over the past 12 months, the company's capitalization has increased by 16%, to $ 49.4 billion.

According to the company’s press release, its net income in the quarter ended December 31 jumped to $ 573 million, or $ 1.55 per share, compared with $ 1.23 million, or $ 0.33 per share, for the same period in the previous year.

Excluding one-time factors, earnings per share were $ 1.86.

Estee Lauder’s quarterly revenue increased 7% to $ 4.01 billion.

Analysts polled by FactSet expected adjusted earnings per share of $ 1.55 on revenue of $ 3.92 billion.

In the last quarter, sales of skin care products jumped by 16%, cosmetics sales increased by 3%, hair care products - by 7%. At the same time, revenue from the sale of perfumes decreased by 5%.

In October-December, sales of Estee Lauder products in North and South America decreased by 7%, in the region uniting Europe, the Middle East and Africa - increased by 13%, in the Asia-Pacific region - grew by 17%.

The company improved its adjusted earnings forecast for the current fiscal year to $ 4.92-5 per share from previously expected $ 4.73-4.82 per share. The forecast of revenue growth increased to 5-6% from 4-5%.

Estee Lauder produces perfumes and beauty products of more than 30 brands, including Estee Lauder, Origins, Clinique, Tommy Hilfiger, Donna Karan and Ermenegildo Zegna, which are sold in more than 150 countries.