Estee Lauder beats the Street, share price jumps
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Estee Lauder beats the Street, share price jumps

Cosmetics giant Estee Lauder reported earnings this week that solidly overshot the Street’s expectations. Even more impressive, Estee Lauder said that it achieved these strong results despite softness in two of its key markets, the UK and the US, both of which were weighed down by geopolitical issues (Brexit and the trade war, respectively). The company’s CEO, Fabrizio Freda paid thanks to a wide range of forces, including strength in China retail and the company’s continued evolution of its digital platforms.

Estee Lauder’s share price soared on the back of strong earnings

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Source: Yahoo Finance

Estee Lauder said that earnings per share for the second quarter of 2019 came in at $1.86. That’s a significant jump from the second quarter of 2018, which saw earnings of $1.52 per share, and it’s an easy beat against analysts’ expectations of $1.54. The company also beat on revenue, delivering $4.01 billion for the three-month period. Analysts had hoped for revenues of $3.92 billion, and Estee managed revenues of $3.74 billion in the year-ago quarter. Net income and operating income also both soared year on year.

Discussing the company’s first-ever quarter of more than $4 billion net sales, CEO Fabrizio Freda said: “We achieved this milestone despite an extremely challenging and volatile environment, which included softness in two of our largest markets, the U.S. and the U.K. and global trade tensions. This is a testament to our strategic resource allocation, superb execution by our talented employees, and improved capabilities throughout the organization. We leveraged our strengths where we had the greatest growth opportunities, including China in travel retail. And we further broadened and diversified our growth engines with strong results in the rest of Asia and emerging markets, in our fast-growing channels, and in most brands.”

Estee was so successful throughout the second quarter that it’s raised its full-year guidance on earnings to a range between $4.92 and $5.00. Analysts are looking for just $4.86 for the full year – an encouraging sign that management appears to have every confidence in its ability to deliver the goods.

Disclosure
Dominion holds Estee Lauder in its Global Trends Luxury Fund.


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