The Estee Lauder Companies Inc. (EL, Financial) filed Quarterly Report for the period ended 2009-09-30.
Estee Lauder Co. is one of the world's leading manufacturers and marketers of quality skin care makeup fragrance and hair care products. Its products are sold in numerous countries and territories under the following well-recognized brand names: Estee Lauder Clinique Aramis Prescriptives Origins M.A.C Bobbi Brown essentials La Mer jane Aveda Stila Jo Malone and Bumble and bumble. The company is also the global licensee for fragrances and cosmetics sold under the TommyHilfiger Donna Karan and Kate Spade brands. The Estee Lauder Companies Inc. has a market cap of $8.36 billion; its shares were traded at around $42.5 with a P/E ratio of 30 and P/S ratio of 1.1. The dividend yield of The Estee Lauder Companies Inc. stocks is 1.3%. The Estee Lauder Companies Inc. had an annual average earning growth of 8.2% over the past 10 years. GuruFocus rated The Estee Lauder Companies Inc. the business predictability rank of 3-star.
We incurred other special charges in connection with the implementation of the Program for the three months ended September 30, 2009 of $3.5 million related to consulting, other professional services, and accelerated depreciation. The total amount of other special charges expected to be incurred to implement these initiatives, including those incurred through September 30, 2009, is approximately $38 million. In addition to the other special charges, and predominantly related to the exit from the global wholesale distribution of the Prescriptives brand, we recorded $18.5 million reflecting anticipated sales returns (less a related cost of sales of $3.9 million) and a write-off of inventory associated with exiting unprofitable operations of $9.5 million. The total amounts expected to be incurred, including those incurred through September 30, 2009, related to sales returns is between $29 million to $33 million and approximately $10 million related to inventory write-offs.
Net sales decreased 4%, or $70.1 million, to $1,833.4 million, primarily reflecting declines in Europe, the Middle East & Africa and in the Americas, partially offset by growth in Asia/Pacific. Net sales decreases in the fragrance, makeup and hair care product categories were partially offset by growth in the skin care category. Excluding the $54.3 million impact of foreign currency translation, net sales decreased slightly. The following discussions of Net Sales by Product Categories and Geographic Regions exclude the impact of anticipated returns associated with restructuring activities of $18.5 million recorded during the current-year period. We believe the following analysis of net sales better reflects the manner in which we conduct and view our business.
Net sales of skin care products increased 2%, or $13.5 million, to $730.3 million. The recent launches of Advanced Night Repair Synchronized Recovery Complex and the new Time Zone line of moisturizing products from Estée Lauder contributed incremental sales of approximately $63 million, combined. These increases were partially offset by approximately $47 million of lower sales from existing products in the Perfectionist, Advanced Night Recovery, Idealist and Future Perfect lines from Estée Lauder and products from Good Skin LabsTM, as well as Cliniques 3-Step Skin Care System, which anniversaried a program that featured value-driven introductory kits. Excluding the impact of foreign currency translation, skin care net sales increased 5%.
Makeup net sales decreased 3%, or $25.0 million, to $717.9 million, primarily reflecting lower combined net sales from our heritage brands. These declines reflected a challenging comparison to the prior-year period which featured a greater number of new launches. Among those prior-year launches were High Impact Lip Colour SPF 15, reformulated Superfit Makeup and Defining Liner for Lips from Clinique and Sumptuous Bold Volume Lifting Mascara from Estée Lauder, which collectively had lower sales of approximately $26 million in the current-year period. Sales declines in most other product lines were mostly offset by approximately $25 million of incremental sales from the recent launches of Even Better Makeup SPF 15 and Superbalanced Powder Makeup SPF 15 from Clinique and Double Wear Stay-in-Place Lip and Eye Pencils from Estée Lauder. Excluding the impact of foreign currency translation, makeup net sales decreased 1%.
Net sales of fragrance products decreased 11%, or $36.3 million, to $291.5 million, due in part to the continued economic downturn, coupled with competitive dynamics. This decline reflected lower sales of DKNY Delicious Night and Estée Lauder Sensuous, which were launched in the prior-year period, of approximately $17 million combined. Also contributing to the decrease were certain Sean John and Clinique fragrances, as well as DKNY Red Delicious Women and Estée Lauder pleasures delight, which collectively reflected lower sales of approximately $23 million. The recent launches of DKNY Be Delicious Fresh Blossom and Very Hollywood Michael Kors partially offset these declines by collectively contributing sales of approximately $13 million to the category. Excluding the impact of foreign currency translation, fragrance net sales decrease
Read the The complete ReportEL is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Arnold Van Den Berg of Century Management.
Estee Lauder Co. is one of the world's leading manufacturers and marketers of quality skin care makeup fragrance and hair care products. Its products are sold in numerous countries and territories under the following well-recognized brand names: Estee Lauder Clinique Aramis Prescriptives Origins M.A.C Bobbi Brown essentials La Mer jane Aveda Stila Jo Malone and Bumble and bumble. The company is also the global licensee for fragrances and cosmetics sold under the TommyHilfiger Donna Karan and Kate Spade brands. The Estee Lauder Companies Inc. has a market cap of $8.36 billion; its shares were traded at around $42.5 with a P/E ratio of 30 and P/S ratio of 1.1. The dividend yield of The Estee Lauder Companies Inc. stocks is 1.3%. The Estee Lauder Companies Inc. had an annual average earning growth of 8.2% over the past 10 years. GuruFocus rated The Estee Lauder Companies Inc. the business predictability rank of 3-star.
Highlight of Business Operations:
We expect that the implementation of this Program, combined with other on-going cost savings efforts, will result in savings of approximately $450 million to $550 million (beginning with approximately $175 million to $200 million in fiscal 2010) including the reduction of certain costs relative to an assumed normalized spending pattern. Our long-range forecast for operating margin reflects these anticipated savings, net of strategic reinvestments.We incurred other special charges in connection with the implementation of the Program for the three months ended September 30, 2009 of $3.5 million related to consulting, other professional services, and accelerated depreciation. The total amount of other special charges expected to be incurred to implement these initiatives, including those incurred through September 30, 2009, is approximately $38 million. In addition to the other special charges, and predominantly related to the exit from the global wholesale distribution of the Prescriptives brand, we recorded $18.5 million reflecting anticipated sales returns (less a related cost of sales of $3.9 million) and a write-off of inventory associated with exiting unprofitable operations of $9.5 million. The total amounts expected to be incurred, including those incurred through September 30, 2009, related to sales returns is between $29 million to $33 million and approximately $10 million related to inventory write-offs.
Net sales decreased 4%, or $70.1 million, to $1,833.4 million, primarily reflecting declines in Europe, the Middle East & Africa and in the Americas, partially offset by growth in Asia/Pacific. Net sales decreases in the fragrance, makeup and hair care product categories were partially offset by growth in the skin care category. Excluding the $54.3 million impact of foreign currency translation, net sales decreased slightly. The following discussions of Net Sales by Product Categories and Geographic Regions exclude the impact of anticipated returns associated with restructuring activities of $18.5 million recorded during the current-year period. We believe the following analysis of net sales better reflects the manner in which we conduct and view our business.
Net sales of skin care products increased 2%, or $13.5 million, to $730.3 million. The recent launches of Advanced Night Repair Synchronized Recovery Complex and the new Time Zone line of moisturizing products from Estée Lauder contributed incremental sales of approximately $63 million, combined. These increases were partially offset by approximately $47 million of lower sales from existing products in the Perfectionist, Advanced Night Recovery, Idealist and Future Perfect lines from Estée Lauder and products from Good Skin LabsTM, as well as Cliniques 3-Step Skin Care System, which anniversaried a program that featured value-driven introductory kits. Excluding the impact of foreign currency translation, skin care net sales increased 5%.
Makeup net sales decreased 3%, or $25.0 million, to $717.9 million, primarily reflecting lower combined net sales from our heritage brands. These declines reflected a challenging comparison to the prior-year period which featured a greater number of new launches. Among those prior-year launches were High Impact Lip Colour SPF 15, reformulated Superfit Makeup and Defining Liner for Lips from Clinique and Sumptuous Bold Volume Lifting Mascara from Estée Lauder, which collectively had lower sales of approximately $26 million in the current-year period. Sales declines in most other product lines were mostly offset by approximately $25 million of incremental sales from the recent launches of Even Better Makeup SPF 15 and Superbalanced Powder Makeup SPF 15 from Clinique and Double Wear Stay-in-Place Lip and Eye Pencils from Estée Lauder. Excluding the impact of foreign currency translation, makeup net sales decreased 1%.
Net sales of fragrance products decreased 11%, or $36.3 million, to $291.5 million, due in part to the continued economic downturn, coupled with competitive dynamics. This decline reflected lower sales of DKNY Delicious Night and Estée Lauder Sensuous, which were launched in the prior-year period, of approximately $17 million combined. Also contributing to the decrease were certain Sean John and Clinique fragrances, as well as DKNY Red Delicious Women and Estée Lauder pleasures delight, which collectively reflected lower sales of approximately $23 million. The recent launches of DKNY Be Delicious Fresh Blossom and Very Hollywood Michael Kors partially offset these declines by collectively contributing sales of approximately $13 million to the category. Excluding the impact of foreign currency translation, fragrance net sales decrease
Read the The complete ReportEL is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Arnold Van Den Berg of Century Management.
