Estee Lauder revises guidance
This article was originally published in The Rose Sheet
Executive Summary
The Estee Lauder Companies will lower its sales and earnings per share guidance for the second quarter of fiscal 2009 and its full year. Move reflects "the deteriorated global economic conditions during the quarter" and further uncertainty about consumer spending and market conditions in the near future, firm says Jan. 16. Second-quarter sales are now expected to slip 6% from prior-year figures on a constant currency basis; currency exchange rates will lower reported sales 6.5%. Previously Lauder forecasted 2%-3% sales growth. Diluted net earnings per share will be $0.75-$0.82. Lauder says it expects current retail trends to continue in North America for the rest of the fiscal year; meanwhile growth will fall off in Europe, the Middle East and Africa. Firm retains a "cautiously positive" outlook for Asia/Pacific region. New outlook for fiscal 2009 has net sales flat to down 3% on a constant currency basis. Foreign currency translation is expected to depress sales 5%-7%, with diluted net earnings per share between $1.30 and $1.60. CEO William Lauder says firm is taking steps to protect its business during the economic downturn, "including making prudent investments to support our brands while diligently controlling expenses.