The Estee Lauder Companies (EL), the manufacturer and marketer of cosmetics products, recently reported better-than-expected second-quarter 2010 results on the heels of robust global sales growth, cost containment and savings from restructuring, registering double-digit increase at both top and bottom-lines. 

The quarterly earnings of $1.28 per share surpassed the Zacks Consensus Estimate of $1.21, and soared 60% from 80 cents delivered in the prior-year quarter. The New York based company, Estee Lauder, now expects third-quarter 2010 earnings in the range of 20 cents to 30 cents a share.

Solid growth in Asia , launch of higher-margin products, gains in the travel retail business, and a strong holiday sales season with favorable foreign currency translation helped results that topped estimates.


Consolidated revenue for the quarter climbed 10.8% year-over-year to $2,262.3 million; excluding foreign currency translation, revenue rose 6.4%. Management expects third-quarter 2010 revenue to increase between 4% and 7% in constant currency. 

By product categories – Skin Care product sales rose 17.3% to $905.8 million, Makeup sales jumped 12% to $815.7 million, Hair Care product sales inched 1.4% to $110 million, whereas Fragrance product sales fell by 2.8% to $403.5 million. 

By region – sales in The Americas rose 1.4% to $916.9 million; in Europe, the Middle East & Africa sales surged 17.5% to $895.5 million, whereas in the Asia/Pacific region, sales soared by 18% to $442.5 million. 

As part of a four-year strategic plan (fiscal year 2010 – 2013), which includes trimming of headcount, and realigning and optimizing the structure of the geographic regions resulted in $83 million savings during the quarter under review. Management expects to realize $65 million in savings during third-quarter 2010. 

Estee Lauder forecasted net sales for fiscal year 2010 to grow in the range of 3% to 5%, in constant currency, and expects full year earnings between $2.55 and $2.73 per share. The company anticipates savings between $275 million and $300 million during the year.