Estee Lauder Tops Q1 Views, Shares Surge

Shares of

jumped over 8 percent in pre-market trading after the company reported stronger-than-expected profit for its fiscal first quarter and lifted its quarterly dividend by 25 percent to $0.30 per share. The New York-based company reported a quarterly profit of $309.3 million, or $0.82 per share, versus a year-ago profit of $228.1 million, or $0.59 per share. Its total sales surged 7.7 percent to $2.83 billion. However, analysts were expecting a profit of $0.70 per share on revenue of $2.78 billion. The average estimate among 32 Estimize users was for earnings of $0.71 per share and revenue of $2.79 billion. The company's gross margin came in unchanged at 79.6 percent for the quarter. Makeup sales rose around 14 percent to $1.16 billion, while skin-care sales surged 1.6 percent. Fragrance sales climbed 9 percent, while hair-care sales rose 4.7 percent in the quarter. Fabrizio Freda, President and Chief Executive Officer, said, "We began the fiscal year delivering 8% adjusted constant currency sales growth. We achieved this strong performance by leveraging our multiple engines of growth, driven by our broad portfolio of prestige brands, which is diversified by category, geography and channel. Our results this quarter were led by our luxury and makeup brands, Europe, where every country posted gains, emerging markets, and online, specialty-multi and freestanding store channels. Our strong earnings per share reflected the strong sales gains and our ability to leverage those sales through cost saving initiatives and continued financial discipline." For the second quarter, Estee Lauder projects earnings of $1.04 to $1.08 per share, versus analysts' estimates of $1.20 per share. The company expects revenue growth of 6 percent to 7 percent on a constant-currency basis. For the full year, the company expects earnings of $3.10 to $3.17 per share, versus analysts' estimates of $3.18 per share. It also expects sales growth of 8 percent to 10 percent on a constant-currency basis. Estee Lauder shares gained 8.13 percent to $87.00 in pre-market trading.