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Freda: “We intend to keep our focus on leveraging our competitive advantage” |  |
Lauder: “We reacted quickly and strongly to temper the impact on our results” |
US. The Estée Lauder Companies has reported fourth quarter and fiscal full year results which it maintains are “in line with the company’s expectations”.
For the year ended 30 June 2009, net sales reached US$7.32 billion, a -7% decrease compared with the US$7.91 billion reported in the prior fiscal year. Excluding the impact of foreign currency translation, net sales declined just -2%.
The group reported net earnings for the year, including charges associated with restructuring activities, of US$218.4 million, compared with US$473.8 million last year. Diluted net earnings per common share for the year were US$1.10, compared with US$2.40 reported in the prior year.
The fiscal 2009 full year results include charges associated with restructuring activities of US$91.7 million (pre-tax), equal to US$.31 per diluted common share. Excluding these charges, net earnings for the year were US$280.1 million and diluted earnings per share were US$1.42.
The Lauder group admitted that each of its product categories and geographic regions continued to be adversely impacted by the “challenging and volatile global economic conditions”.
Within Europe, the Middle East & Africa, in constant currency the overall decline in net sales was led by the company’s travel retail business, Spain, France and Italy. Lower results in travel retail also affected operating income.
By product category, for the full fiscal year, fragrance sales declined -19.6% to US$1.15 billion, skin care decreased by -3.7% to US$2.89 billion, and make-up shrank by -5.6% to US$2.83 billion.
By region, annual sales in the Americas dipped -7.8% to US$3.42 billion, while the Europe, Middle East & Africa region decreased by -13.2% to US$2.61 billion. Asia Pacific, however, put in a positive performance, growing +9% to reach US$1.3 billion.
Executive Chairman William P. Lauder commented: “The extraordinary economic difficulties we faced in fiscal 2009 resulted in lower net sales and earnings. While I am disappointed with our overall performance, throughout the fiscal year our company rallied to meet the challenging business conditions in the many regions of the world we serve.
“We reacted quickly and strongly to temper the impact on our results. We prioritised investments and accelerated cost reductions. We also resized our company to meet near-term needs and began implementing a restructuring programme to position us for the long term. As a result, our company today remains strong: we were profitable, our balance sheet is healthy and our cash flow was solid.”
President and Chief Executive Officer Fabrizio Freda noted: “Across the company we are leveraging our strengths and addressing our opportunities while building needed capabilities and focusing on cost savings.
“The Estée Lauder Companies will benefit from a more integrated organisation that will bring us closer to consumers around the world and is pursuing our most promising opportunities across categories, brands, regions and channels. I am very pleased how well our company has embraced this new structure.”
Fourth Quarter Results
For the three months ended 30 June 2009, the company reported net sales of US$1.68 billion, a -16% decrease from the US$2.01 billion in the fourth quarter of fiscal 2008. Excluding the impact of foreign currency translation, net sales declined -10%.
The group reported a net loss, including charges associated with restructuring activities, for the fourth quarter of US$17.9 million, versus net earnings of US$120.2 million last year. Diluted net loss per common share was US$.09, compared with net earnings per diluted common share of US$.61 reported in the same prior-year period.
Looking ahead to the new fiscal year, the company admitted that the high degree of global economic uncertainty made definitive forecasting difficult.
Freda concluded: “In the new fiscal year, we intend to advance our strategy towards reaching our long-term financial goals. I am confident that our organisation is fully aligned and determined to succeed at this task and further enhance our global leadership position in prestige beauty.
“Our top priority in the future is to drive our businesses, grow global market share, improve our margins and continue to refine our asset management. We intend to keep our focus on leveraging our competitive advantage by drawing on the breadth of our brands and the strength of our assets and employees.”
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