The Estée Lauder Companies Inc. (NYSE:EL) today reported net sales for
its third quarter ended March 31, 2014 of $2.55 billion, an 11% increase
compared with $2.29 billion in the prior-year quarter. Excluding the
impact of foreign currency translation, net sales increased 12%. The
Company reported a 270 basis-point increase in operating margin, and net
earnings for the quarter rose 19% to $213.2 million, compared with
$178.8 million last year. Diluted net earnings per common share rose 20%
to $.54, compared with $.45 reported in the prior year.
Fabrizio Freda, President and Chief Executive Officer, said, “Our
excellent results this quarter reflect our multiple engines of growth
across product categories, countries and channels, enabling us to
achieve strong local currency sales growth in every geographic region.
Sales came in higher than our expectations and we again exceeded our
earnings per share forecast. These results were driven by the broad
global demand for our diverse prestige beauty brands, the strength of
our emerging markets, accelerated growth in certain developed markets
and solid progress in skin care.”
During the quarter, the Venezuelan government enacted changes to its
foreign currency exchange rate regulations, which expanded the use of
its existing exchange rate mechanisms and created another mechanism,
SICAD II. Based on these changes, the Company evaluated all rate
mechanisms made available by the Venezuelan government to determine the
most appropriate rate to use. As a result, the Company changed the
exchange rate used to remeasure its Venezuelan net monetary assets to a
newly enacted SICAD II rate. Accordingly, the Company recorded a
remeasurement charge of $38.3 million, both before and after tax, equal
to approximately $.10 per diluted share.
Excluding charges, principally related to the Venezuela remeasurement,
net earnings for the three months ended March 31, 2014 were $251.7
million, and diluted net earnings per common share were $.64, versus
$.45 in the prior-year period.
Additionally, comparisons between the current and prior year third
quarters were affected by the acceleration of $94 million in sales
shifted into the Company’s fiscal 2013 second quarter in advance of the
January 2013 implementation of SAP as part of its Strategic
Modernization Initiative (SMI). This amounted to approximately $78
million in operating income, equal to approximately $.13 per diluted
common share.
Excluding the impact of the shift, the Venezuela remeasurement charge
and restructuring activities, net sales in local currency and operating
income for the three months ended March 31, 2014 would have increased 8%
and 18%, respectively. A reconciliation between GAAP and non-GAAP
financial measures is included in this release.
“Our outlook for the balance of the year remains positive and we expect
to achieve our financial objectives,” Mr. Freda said. “We continue to
forecast local currency sales growth of 6% to 7%, and we are raising our
earnings per share guidance to $2.86 to $2.90, before charges and the
effect of potential accelerated sales orders relating to our SMI go-live
in July 2014. Driving this performance will be new and recent product
offerings across categories, particularly in skin care and makeup. For
the remainder of the fiscal year we also expect our growth will continue
to be fueled by our success in high-growth channels and emerging
markets, while enhancing our local relevance. Importantly, our mid-size
brands continue to grow faster than the average, increasing their
contribution to the Company’s sales and profitability, while
strengthening our portfolio. We are flexible in our investment spending,
targeting opportunities that provide the highest returns, promote demand
for our brands and foster global growth. At the same time, we are
improving operating leverage and eliminating non-value added costs to
further improve operating margins and profitability.”
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Results by Product Category
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Three Months Ended March 31
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(Unaudited; Dollars in millions)
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Net Sales
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Percent Change
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Operating
Income (Loss)
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Percent
Change
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2014
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|
2013
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Reported
Basis
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Local
Currency
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2014
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2013
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Reported
Basis
|
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Skin Care
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$
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1,132.1
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$
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1,015.0
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|
12
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%
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13
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%
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$
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179.0
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$
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134.4
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33
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%
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Makeup
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1,015.7
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919.2
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10
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11
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149.9
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107.3
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40
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Fragrance
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270.5
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233.2
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16
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|
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16
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(1.9
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)
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(0.2
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)
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(100
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)+
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Hair Care
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120.8
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116.2
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4
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|
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5
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13.2
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5.1
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100
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+
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Other
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10.7
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8.2
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|
30
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|
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32
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|
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1.6
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(3.2
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)
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100
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+
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Subtotal
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2,549.8
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2,291.8
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11
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12
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341.8
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243.4
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40
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Returns and charges associated
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with restructuring activities
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—
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—
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|
|
|
|
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(0.2
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)
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1.7
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Total
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$
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2,549.8
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$
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2,291.8
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|
11
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%
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|
12
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%
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|
$
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341.6
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$
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245.1
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39
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%
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The change in net sales and operating income for the quarter was
favorably impacted by the prior year shift in orders from certain
retailers, due to the Company’s implementation of SAP, as previously
mentioned, in the following product categories:
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Net sales: Skin care, approximately $48 million; makeup, approximately
$32 million; fragrance, approximately $10 million; and hair care,
approximately $4 million.
-
Operating income: Skin care, approximately $40 million; makeup,
approximately $26 million; fragrance, approximately $9 million; and
hair care, approximately $3 million.
Excluding the impact of the shift in orders:
-
Reported net sales in skin care, makeup, fragrance and hair care would
have increased 7%, 7%, 11% and 1%, respectively.
-
Operating results in skin care, makeup, fragrance and hair care would
have increased/(decreased) 3%, 12%, (100)+% and 63%, respectively.
The current-year period remeasurement of net monetary assets in
Venezuela, as previously mentioned, primarily impacted the operating
income of the skin care, makeup and fragrance product categories by $12
million, $16 million and $10 million, respectively.
Skin Care
-
The skin care category is a strategic priority and the Company is well
positioned to capitalize on its strong pipeline of innovative
products. The Company gained share during the quarter in this category
in certain countries where its products are sold.
-
Sales reflect the recent launches of the Company’s new Advanced Night
Repair Synchronized Recovery Complex II and Micro Essence Skin
Activating Treatment Lotion from Estée Lauder and Dramatically
Different Moisturizing Lotion + and Even Better Essence Lotion from
Clinique.
-
Sales from the reformulated Repairwear Laser Focus by Clinique and
continued strong growth from the Company’s luxury skin care brand, La
Mer, also contributed to growth.
-
Operating income increased sharply, including the shift, primarily
reflecting higher-margin product launches from certain of the
Company’s heritage brands, as well as increased results from
higher-end prestige skin care products.
Makeup
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Higher makeup sales primarily reflected strong growth from the
Company’s makeup artist brands and from recent launches, such as Pure
Color Envy Sculpting Lipstick from Estée Lauder and All About Shadow
from Clinique.
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Sales from makeup artist brands benefited from new product offerings,
as well as expanded distribution in line with the Company’s retail
store strategy.
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Increased sales from Smashbox and the Tom Ford line of cosmetics
contributed to the category’s growth.
-
The increase in makeup operating income primarily reflected improved
performance from the Company’s makeup artist brands due to the higher
sales, and certain heritage brands.
Fragrance
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In fragrance, strong sales growth came from luxury brands Tom Ford and
Jo Malone. Sales gains were also generated from the recent launches of
Estée Lauder Modern Muse, Tory Burch and the Michael Kors Fragrance
Collection.
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Fragrance operating loss increased, due to the Venezuela remeasurement
charge. Operating results also reflected higher net sales from recent
launches, partially offset by higher investment spending.
Hair Care
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Hair care net sales growth was primarily driven by Aveda, reflecting
gains in the salon channel and the continued success of its Dry Remedy
and Damage Remedy franchises.
-
Sales increased at Bumble and bumble, primarily due to higher sales to
specialty-multi brand retailers. Ojon sales decreased, primarily due
to its exit from the direct response television channel.
-
The category growth also benefited from expanded global distribution,
in particular to specialty-multi brand retailers for Bumble and bumble
and to salons and travel retail for Aveda.
-
Hair care operating income increased more than 100%, primarily
reflecting higher net sales driven by expanded global distribution and
new product launches, as well as lower investment spending.
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Results by Geographic Region
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Three Months Ended March 31
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(Unaudited; Dollars in millions)
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Net Sales
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Percent Change
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Operating
Income (Loss)
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|
Percent
Change
|
|
|
|
|
2014
|
|
2013
|
|
Reported
Basis
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|
Local
Currency
|
|
2014
|
|
2013
|
|
Reported
Basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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The Americas
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$
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1,072.0
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$
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988.1
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8
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%
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10
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%
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$
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111.5
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$
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68.0
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64
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%
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Europe, the Middle East & Africa.
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959.4
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847.9
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13
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12
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160.2
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137.5
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17
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Asia/Pacific
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518.4
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455.8
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|
14
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|
|
18
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|
|
70.1
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|
37.9
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|
85
|
|
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Subtotal
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2,549.8
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|
2,291.8
|
|
11
|
|
|
12
|
|
|
341.8
|
|
243.4
|
|
40
|
|
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Returns and charges associated
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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with restructuring activities
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|
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—
|
|
—
|
|
|
|
|
|
|
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(0.2
|
)
|
1.7
|
|
|
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Total
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$
|
2,549.8
|
|
$
|
2,291.8
|
|
11
|
%
|
|
12
|
%
|
|
$
|
341.6
|
|
$
|
245.1
|
|
39
|
%
|
|
|
In the quarter, the change in net sales and operating income in the
Company’s geographic regions was favorably impacted by the prior year
shift in orders from certain retailers as previously mentioned, as
follows:
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Net sales: the Americas, approximately $29 million; Europe, the Middle
East & Africa, approximately $15 million; and Asia/Pacific,
approximately $50 million.
-
Operating income: the Americas, approximately $23 million; Europe, the
Middle East & Africa, approximately $12 million; and Asia/Pacific,
approximately $43 million.
Excluding the impact of the shift in orders:
-
Reported net sales in the Americas, Europe, the Middle East & Africa
and Asia/Pacific would have increased 5%, 11% and 2%, respectively.
-
Operating income in the Americas, Europe, the Middle East & Africa and
Asia/Pacific would have increased/(decreased) 22%, 7% and (13)%,
respectively.
The Americas
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Net sales in the United States increased, reflecting growth from the
Company’s makeup artist and luxury brands and certain heritage brands.
Sales also increased in Latin America and Canada.
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Sales of the Company’s online business grew double digits.
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Operating income in the Americas rose, reflecting the increased sales
and a more measured approach to spending. Additionally, operating
income in the region reflects the charge of $38.3 million in the
current-year period to remeasure net monetary assets in Venezuela.
Europe, the Middle East & Africa
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In constant currency, net sales increased in each major product
category and in virtually all countries in the region. The Company
estimates that it continued to outperform prestige beauty in many
markets.
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The net sales increase was led by double-digit growth in a number of
areas, including the United Kingdom, Germany, Switzerland, Turkey,
France and Russia. Net sales growth in Switzerland and France were
due, in part, to the accelerated retailer orders, as previously
discussed. Certain European countries continued to experience soft
retail environments.
-
In travel retail, sales increased high-single digits, primarily
reflecting higher sales from the Company’s luxury brands, an increase
in global airline passenger traffic and expanded distribution.
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Operating income increased, as higher results from the United Kingdom,
Switzerland, France and Russia were partially offset by lower
operating results in Spain and certain Eastern European countries.
Asia/Pacific
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Constant currency net sales increased in the majority of countries in
the region. The strongest growth was generated in China, Japan, Hong
Kong, Taiwan and Australia. The sales increase in China, Hong Kong and
Taiwan reflect the shift in retailer orders, as previously discussed.
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Sales were lower in Thailand, Korea and the Philippines.
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The Company estimates that it gained share in certain countries within
its points of distribution during the quarter.
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In Asia/Pacific, operating income increased, led by China, Japan,
Korea and Taiwan. Results in China and Taiwan primarily reflect the
impact from the accelerated retailer orders. Lower operating results
were posted in Hong Kong and the Philippines.
Nine-Month Results
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For the nine months ended March 31, 2014, the Company reported net
sales of $8.24 billion, a 6% increase from $7.77 billion in the
comparable prior-year period. Excluding the impact of foreign currency
translation, net sales increased 7%. Net sales grew in each of the
Company’s geographic regions and product categories.
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The Company reported net earnings of $946.4 million for the nine
months ended March 31, 2014, a 2% increase compared with $925.8
million in the same period last year. Diluted net earnings per common
share for the nine months ended March 31, 2014 increased 2% to $2.40,
compared with $2.35 reported in the prior-year period.
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The fiscal 2014 nine-month results included the remeasurement charge
of $38.3 million related to Venezuela, as previously mentioned.
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The fiscal 2013 nine-month results included charges associated with
restructuring activities of $13.3 million ($8.9 million after tax),
equal to $.02 per diluted common share. Additionally, during the nine
months ended March 31, 2013, the Company recorded a pre-tax charge of
$19.1 million ($12.2 million after tax), for the extinguishment of
debt, equal to $.03 per diluted common share.
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Excluding these charges, net earnings for the nine months ended March
31, 2014 rose 4% to $983.5 million and diluted net earnings per common
share increased 4% to $2.50, versus a comparable $2.40 in the
prior-year period.
Cash Flows
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For the nine months ended March 31, 2014, net cash flows provided by
operating activities increased 25% to $1,169.4 million, compared with
$934.2 million in the prior-year period.
-
The increase primarily reflected the higher net earnings and a net
increase in cash from certain working capital components.
Outlook for Fiscal 2014 Full Year
The Company expects global prestige beauty to grow approximately 3% to
4%, tempered by continued softness in certain European countries and
Korea, and slower near-term growth in China and the United States. The
Company expects to further improve its gross and operating margins by
leveraging its strong sales growth and continuing to reduce
non-value-added costs.
-
Net sales are forecasted to grow between 6% and 7% in constant
currency.
-
Foreign currency translation is expected to negatively impact sales by
approximately 1% versus the prior-year period.
-
Diluted net earnings per common share, including the charge related to
the Venezuela remeasurement and the effect of potential accelerated
retailer orders, are projected between $2.90 to $2.97.
-
As mentioned previously in this press release, the impact of the
Venezuela remeasurement is equal to $.10 per diluted common share.
-
Diluted net earnings per share, before the charge related to the
Venezuela remeasurement and the effect of potential accelerated
retailer orders, are projected between $2.86 to $2.90. The
approximately 1% negative currency impact on the sales growth equates
to about $.02 of earnings per share.
-
July 2014 SMI Implementation:
The
Company expects to roll out the last major wave of SMI in July 2014 in
certain of its locations. In advance of this implementation, the
Company expects some retailers will accelerate sales orders that would
normally occur in its fiscal 2015 first quarter into the fiscal 2014
fourth quarter to provide adequate safety stock to mitigate any
potential short-term business interruption associated with the SMI
rollout. Those additional orders are estimated to amount to between
$125 million and $150 million of sales, equal to $.14 to $.17 per
diluted common share.
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Reconciliation between GAAP and non-GAAP estimates
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|
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Net Sales Growth
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|
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(Unaudited)
|
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|
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Reported
Basis
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|
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Constant
Currency
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Diluted Earnings
Per Share
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Full-year forecast including the Venezuela
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charge and fiscal 2015 accelerated
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retailer orders
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6% – 7%
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(1)
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7% – 8%
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$2.90 – $2.97
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(1)
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Non-GAAP
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Venezuela charge
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—
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—
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.10
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Full-year forecast excluding the
Venezuela charge
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6% – 7%
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7% – 8%
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3.00 – 3.07
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Impact of fiscal 2015 accelerated orders
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~(1)%
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~(1)%
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(.14 – .17
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)
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Full-year forecast excluding the Venezuela
charge and
accelerated retailer orders
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5% – 6%
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6% – 7%
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$2.86 – $2.90
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(1) Represents GAAP estimates.
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Conference Call
The Estée Lauder Companies will host a conference call at 9:30 a.m. (ET)
today, May 2, 2014 to discuss its results. The dial-in number for the
call is 888-294-4716 in the U.S. or 706-902-0101 internationally
(conference ID number: 30824577). The call will also be webcast live at http://investors.elcompanies.com.
Forward-Looking Statements
The forward-looking statements in this press release, including those
containing words like “expect,” “plans,” “may,” “could,” “anticipate,”
“estimate,” “projected,” “forecasted,” those in Mr. Freda’s remarks and
those in the “Outlook for Fiscal 2014 Full Year” section involve risks
and uncertainties. Factors that could cause actual results to differ
materially from those forward-looking statements include the following:
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(1)
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increased competitive activity from companies in the skin care,
makeup, fragrance and hair care businesses, some of which have
greater resources than the Company does;
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(2)
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the Company’s ability to develop, produce and market new products on
which future operating results may depend and to successfully
address challenges in the Company’s business;
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(3)
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consolidations, restructurings, bankruptcies and reorganizations in
the retail industry causing a decrease in the number of stores that
sell the Company’s products, an increase in the ownership
concentration within the retail industry, ownership of retailers by
the Company’s competitors or ownership of competitors by the
Company’s customers that are retailers and our inability to collect
receivables;
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(4)
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destocking and tighter working capital management by retailers;
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(5)
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the success, or changes in timing or scope, of new product launches
and the success, or changes in the timing or the scope, of
advertising, sampling and merchandising programs;
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(6)
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shifts in the preferences of consumers as to where and how they shop
for the types of products and services the Company sells;
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(7)
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social, political and economic risks to the Company’s foreign or
domestic manufacturing, distribution and retail operations,
including changes in foreign investment and trade policies and
regulations of the host countries and of the United States;
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(8)
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changes in the laws, regulations and policies (including the
interpretations and enforcement thereof) that affect, or will
affect, the Company’s business, including those relating to its
products or distribution networks, changes in accounting standards,
tax laws and regulations, environmental or climate change laws,
regulations or accords, trade rules and customs regulations, and the
outcome and expense of legal or regulatory proceedings, and any
action the Company may take as a result;
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(9)
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foreign currency fluctuations affecting the Company’s results of
operations and the value of its foreign assets, the relative prices
at which the Company and its foreign competitors sell products in
the same markets and the Company’s operating and manufacturing costs
outside of the United States;
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(10)
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changes in global or local conditions, including those due to the
volatility in the global credit and equity markets, natural or
man-made disasters, real or perceived epidemics, or energy costs,
that could affect consumer purchasing, the willingness or ability of
consumers to travel and/or purchase the Company’s products while
traveling, the financial strength of the Company’s customers,
suppliers or other contract counterparties, the Company’s
operations, the cost and availability of capital which the Company
may need for new equipment, facilities or acquisitions, the returns
that the Company is able to generate on its pension assets and the
resulting impact on its funding obligations, the cost and
availability of raw materials and the assumptions underlying the
Company’s critical accounting estimates;
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(11)
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shipment delays, commodity pricing, depletion of inventory and
increased production costs resulting from disruptions of operations
at any of the facilities that manufacture nearly all of the
Company’s supply of a particular type of product (i.e., focus
factories) or at the Company’s distribution or inventory centers,
including disruptions that may be caused by the implementation of
SAP as part of the Company’s Strategic Modernization Initiative or
by restructurings;
|
|
(12)
|
|
real estate rates and availability, which may affect the Company’s
ability to increase or maintain the number of retail locations at
which the Company sells its products and the costs associated with
the Company’s other facilities;
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|
(13)
|
|
changes in product mix to products which are less profitable;
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|
(14)
|
|
the Company’s ability to acquire, develop or implement new
information and distribution technologies and initiatives on a
timely basis and within the Company’s cost estimates and the
Company’s ability to maintain continuous operations of such systems
and the security of data and other information that may be stored in
such systems or other systems or media;
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|
(15)
|
|
the Company’s ability to capitalize on opportunities for improved
efficiency, such as publicly-announced strategies and restructuring
and cost-savings initiatives, and to integrate acquired businesses
and realize value therefrom;
|
|
(16)
|
|
consequences attributable to local or international conflicts around
the world, as well as from any terrorist action, retaliation and the
threat of further action or retaliation;
|
|
(17)
|
|
the timing and impact of acquisitions and divestitures, which depend
on willing sellers and buyers, respectively; and
|
|
(18)
|
|
additional factors as described in the Company’s filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the fiscal year ended June 30, 2013.
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|
The Company assumes no responsibility to update forward-looking
statements made herein or otherwise.
|
|
|
The Estée Lauder Companies Inc. is one of the world’s leading
manufacturers and marketers of quality skin care, makeup, fragrance and
hair care products. The Company’s products are sold in over 150
countries and territories under the following brand names: Estée Lauder,
Aramis, Clinique, Prescriptives, Lab Series, Origins, M•A•C, Bobbi
Brown, Tommy Hilfiger, Kiton, La Mer, Donna Karan, Aveda, Jo Malone,
Bumble and bumble, Darphin, Michael Kors, American Beauty,
Flirt!, GoodSkin Labs, Grassroots Research Labs, Tom Ford, Coach, Ojon,
Smashbox, Ermenegildo Zegna, Aerin Beauty, Osiao, Marni and Tory Burch.
An electronic version of this release can be found at the Company’s
website, www.elcompanies.com.
|
|
|
THE ESTÉE LAUDER COMPANIES INC.
CONSOLIDATED
STATEMENTS OF EARNINGS
(Unaudited; In millions, except
per share data and percentages)
|
|
|
|
|
|
|
|
Three Months Ended
March 31
|
|
|
Percent
Change
|
|
Nine Months Ended
March 31
|
|
|
Percent
Change
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
$
|
2,549.8
|
|
|
$
|
2,291.8
|
|
|
|
11
|
%
|
|
$
|
8,243.5
|
|
|
$
|
7,774.3
|
|
|
|
6
|
%
|
|
Cost of Sales
|
|
|
|
|
498.7
|
|
|
|
443.1
|
|
|
|
|
|
|
|
1,624.4
|
|
|
|
1,550.3
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
|
2,051.1
|
|
|
|
1,848.7
|
|
|
|
11
|
%
|
|
|
6,619.1
|
|
|
|
6,224.0
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
|
|
80.4
|
%
|
|
|
80.7
|
%
|
|
|
|
|
|
|
80.3
|
%
|
|
|
80.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (A)
|
|
|
|
|
1,709.5
|
|
|
|
1,605.3
|
|
|
|
|
|
|
|
5,173.9
|
|
|
|
4,831.8
|
|
|
|
|
|
|
Restructuring and other charges (B)
|
|
|
|
|
—
|
|
|
|
(1.7
|
)
|
|
|
|
|
|
|
(2.2
|
)
|
|
|
12.0
|
|
|
|
|
|
|
|
|
|
|
|
1,709.5
|
|
|
|
1,603.6
|
|
|
|
7
|
%
|
|
|
5,171.7
|
|
|
|
4,843.8
|
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expense Margin
|
|
|
|
|
67.0
|
%
|
|
|
70.0
|
%
|
|
|
|
|
|
|
62.7
|
%
|
|
|
62.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
341.6
|
|
|
|
245.1
|
|
|
|
39
|
%
|
|
|
1,447.4
|
|
|
|
1,380.2
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income Margin
|
|
|
|
|
13.4
|
%
|
|
|
10.7
|
%
|
|
|
|
|
|
|
17.6
|
%
|
|
|
17.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
12.3
|
|
|
|
12.6
|
|
|
|
|
|
|
|
38.2
|
|
|
|
41.8
|
|
|
|
|
|
|
Interest expense on debt extinguishment (C)
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
19.1
|
|
|
|
|
|
|
Other income (D)
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
23.1
|
|
|
|
|
|
|
Earnings before Income Taxes
|
|
|
|
|
329.3
|
|
|
|
232.5
|
|
|
|
42
|
%
|
|
|
1,409.2
|
|
|
|
1,342.4
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
115.6
|
|
|
|
53.6
|
|
|
|
|
|
|
|
458.5
|
|
|
|
414.5
|
|
|
|
|
|
|
Net Earnings
|
|
|
|
|
213.7
|
|
|
|
178.9
|
|
|
|
19
|
%
|
|
|
950.7
|
|
|
|
927.9
|
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to noncontrolling interests
|
|
|
|
|
(0.5
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
(4.3
|
)
|
|
|
(2.1
|
)
|
|
|
|
|
|
Net Earnings Attributable to The Estée Lauder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Companies Inc.
|
|
|
|
$
|
213.2
|
|
|
$
|
178.8
|
|
|
|
19
|
%
|
|
$
|
946.4
|
|
|
$
|
925.8
|
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to The Estée Lauder Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inc. per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
.55
|
|
|
$
|
.46
|
|
|
|
20
|
%
|
|
$
|
2.44
|
|
|
$
|
2.39
|
|
|
|
2
|
%
|
|
Diluted
|
|
|
|
|
.54
|
|
|
|
.45
|
|
|
|
20
|
%
|
|
|
2.40
|
|
|
|
2.35
|
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
385.8
|
|
|
|
387.2
|
|
|
|
|
|
|
|
387.3
|
|
|
|
387.5
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
392.1
|
|
|
|
394.0
|
|
|
|
|
|
|
|
394.1
|
|
|
|
394.7
|
|
|
|
|
|
|
|
|
|
|
(A)
|
|
During the quarter, based on recent changes to Venezuela’s foreign
currency exchange rate regulations, the Company changed the exchange
rate used to remeasure its Venezuelan net monetary assets to a newly
enacted SICAD II rate. Accordingly, the Company recorded a
remeasurement charge of $38.3 million, both before and after tax,
equal to approximately $.10 per diluted common share.
|
|
|
|
|
|
(B)
|
|
During the second quarter of fiscal 2013, the Company closed its
multi-faceted cost savings program implemented in February 2009 (the
“Program”) and will continue to execute all remaining initiatives
through fiscal 2014. The impact of returns, charges and adjustments
related to the Program for each fiscal period are set forth in
tables that follow these notes.
|
|
|
|
|
|
(C)
|
|
In the first quarter of fiscal 2013, the Company redeemed $230.1
million principal amount of its 7.75% Senior Notes due November 1,
2013. As a result, the Company recorded a pre-tax charge of $19.1
million ($12.2 million after tax), for the impact of the
extinguishment of debt, equal to $.03 per diluted common share.
|
|
|
|
|
|
(D)
|
|
In December 2012, the Company amended the agreement related to the
August 2007 sale of Rodan + Fields to receive a fixed amount in lieu
of future contingent consideration and other rights. As a result of
the amended agreement, the Company recognized $23.1 million, equal
to $.04 per diluted common share as other income in the consolidated
statement of earnings for the nine months ended March 31, 2013.
|
|
|
|
|
|
|
|
THE ESTÉE LAUDER COMPANIES INC.
SUMMARY OF
CONSOLIDATED RESULTS
(Unaudited; Dollars in millions)
|
|
|
|
|
Nine Months Ended March 31
|
|
|
|
|
|
Net Sales
|
|
Percent Change
|
|
|
Operating
Income (Loss)
|
|
Percent
Change
|
|
|
|
|
|
2014
|
|
2013
|
|
Reported
Basis
|
|
|
Local
Currency
|
|
|
2014
|
|
2013
|
|
Reported
Basis
|
|
Results by Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Americas
|
|
|
|
$ 3,469.0
|
|
$ 3,310.4
|
|
5
|
%
|
|
6
|
%
|
|
$ 419.7
|
|
$ 372.4
|
|
13
|
%
|
|
Europe, the Middle East & Africa
|
|
|
|
3,031.6
|
|
2,778.1
|
|
9
|
|
|
8
|
|
|
673.4
|
|
659.0
|
|
2
|
|
|
Asia/Pacific
|
|
|
|
1,742.8
|
|
1,685.9
|
|
3
|
|
|
7
|
|
|
352.2
|
|
362.1
|
|
(3
|
)
|
|
Subtotal
|
|
|
|
$8,243.4
|
|
$7,774.4
|
|
6
|
|
|
7
|
|
|
$1,445.3
|
|
$1,393.5
|
|
4
|
|
|
Returns and charges associated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
with restructuring activities
|
|
|
|
0.1
|
|
(0.1
|
)
|
|
|
|
|
|
|
2.1
|
|
(13.3
|
)
|
|
|
|
Total
|
|
|
|
$ 8,243.5
|
|
$ 7,774.3
|
|
6
|
%
|
|
7
|
%
|
|
$ 1,447.4
|
|
$ 1,380.2
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results by Product Category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Skin Care
|
|
|
|
|
$
|
3,564.4
|
|
$
|
3,408.4
|
|
5
|
%
|
|
6
|
%
|
|
$
|
758.6
|
|
$
|
750.1
|
|
1
|
%
|
|
Makeup
|
|
|
|
|
3,145.8
|
|
2,928.9
|
|
7
|
|
|
8
|
|
|
564.5
|
|
495.1
|
|
14
|
|
|
Fragrance
|
|
|
|
|
1,115.7
|
|
1,039.6
|
|
7
|
|
|
8
|
|
|
95.5
|
|
130.5
|
|
(27
|
)
|
|
Hair Care
|
|
|
|
|
380.7
|
|
362.0
|
|
5
|
|
|
6
|
|
|
29.3
|
|
25.9
|
|
13
|
|
|
Other
|
|
|
|
|
36.8
|
|
35.5
|
|
4
|
|
|
5
|
|
|
(2.6
|
)
|
(8.1
|
)
|
68
|
|
|
Subtotal
|
|
|
|
|
8,243.4
|
|
7,774.4
|
|
6
|
|
|
7
|
|
|
1,445.3
|
|
1,393.5
|
|
4
|
|
|
Returns and charges associated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
with restructuring activities
|
|
|
|
|
0.1
|
|
(0.1
|
)
|
|
|
|
|
|
|
2.1
|
|
(13.3
|
)
|
|
|
|
Total
|
|
|
|
|
$
|
8,243.5
|
|
$
|
7,774.3
|
|
6
|
%
|
|
7
|
%
|
|
$
|
1,447.4
|
|
$
|
1,380.2
|
|
5
|
%
|
|
______________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This earnings release includes some non-GAAP financial measures relating
to charges associated with restructuring activities, the Venezuela
remeasurement, the extinguishment of debt and the accelerated orders
associated with the Company’s SMI rollout. The following are
reconciliations between the non-GAAP financial measures and the most
directly comparable GAAP measures for certain consolidated statements of
earnings accounts before and after the charges associated with
restructuring activities, the Venezuela remeasurement, the
extinguishment of debt and the accelerated orders. The Company uses
these non-GAAP financial measures, among other things, to evaluate its
operating performance and the measures represent the manner in which the
Company conducts and views its business. Management believes that
excluding these items that are not comparable from period to period
helps investors and others compare operating performance between two
periods. While the Company considers the non-GAAP measures useful in
analyzing its results, they are not intended to replace, or act as a
substitute for, any presentation included in the consolidated financial
statements prepared in conformity with GAAP.
The Company operates on a global basis, with the majority of its net
sales generated outside the United States. Accordingly, fluctuations in
foreign currency exchange rates can affect the Company’s results of
operations. Therefore, the Company presents certain net sales
information excluding the effect of foreign currency rate fluctuations
to provide a framework for assessing the performance of its underlying
business outside the United States. Constant currency information
compares results between periods as if exchange rates had remained
constant period-over-period. The Company calculates constant currency
information by translating current-period results using prior-year
period weighted average foreign currency exchange rates.
|
|
|
THE ESTÉE LAUDER COMPANIES INC.
Reconciliation of
Certain Consolidated Statements of Earnings Accounts Before and
After Returns and Charges
(Unaudited; In millions,
except per share data and percentages)
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2014
|
|
|
Three Months Ended
March 31, 2013
|
|
|
|
|
|
|
|
As Reported
|
|
Returns/
Charges
|
|
Before
Returns/
Charges
|
|
|
|
As Reported
|
|
Returns/
Charges
|
|
Before
Returns/
Charges
|
|
|
% Change
versus Prior
Year Before
Returns/Charges
|
|
Net Sales
|
|
|
|
|
$2,549.8
|
|
|
|
$ 0.0
|
|
|
$2,549.8
|
|
|
|
$2,291.8
|
|
|
$ 0.0
|
|
|
$2,291.8
|
|
|
|
11
|
%
|
|
Cost of sales
|
|
|
|
|
498.7
|
|
|
|
(0.2
|
)
|
|
498.5
|
|
|
|
443.1
|
|
|
0.0
|
|
|
443.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
|
2,051.1
|
|
|
|
0.2
|
|
|
2,051.3
|
|
|
|
1,848.7
|
|
|
0.0
|
|
|
1,848.7
|
|
|
|
11
|
%
|
|
Gross Margin
|
|
|
|
|
80.4
|
%
|
|
|
|
|
|
80.4
|
%
|
|
|
80.7
|
%
|
|
|
|
|
80.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
1,709.5
|
|
|
|
(38.3
|
)
|
|
1,671.2
|
|
|
|
1,603.6
|
|
|
1.7
|
|
|
1,605.3
|
|
|
|
4
|
%
|
|
Operating Expense Margin
|
|
|
|
|
67.0
|
%
|
|
|
|
|
|
65.5
|
%
|
|
|
70.0
|
%
|
|
|
|
|
70.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
341.6
|
|
|
|
38.5
|
|
|
380.1
|
|
|
|
245.1
|
|
|
(1.7
|
)
|
|
243.4
|
|
|
|
56
|
%
|
|
Operating Income Margin
|
|
|
|
|
13.4
|
%
|
|
|
|
|
|
14.9
|
%
|
|
|
10.7
|
%
|
|
|
|
|
10.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
115.6
|
|
|
|
0.0
|
|
|
115.6
|
|
|
|
53.6
|
|
|
(0.7
|
)
|
|
52.9
|
|
|
|
|
|
|
Net Earnings Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Estée Lauder Companies Inc.
|
|
|
|
|
213.2
|
|
|
|
38.5
|
|
|
251.7
|
|
|
|
178.8
|
|
|
(1.0
|
)
|
|
177.8
|
|
|
|
42
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings attributable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to The Estée Lauder Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inc. per common share
|
|
|
|
|
.54
|
|
|
|
.10
|
|
|
.64
|
|
|
|
.45
|
|
|
.00
|
|
|
.45
|
|
|
|
42
|
%
|
|
|
|
|
|
|
|
Nine Months Ended
March 31, 2014
|
|
|
Nine Months Ended
March 31, 2013
|
|
|
|
|
|
|
|
As Reported
|
|
Returns/
Charges
|
|
Before
Returns/
Charges
|
|
|
|
As Reported
|
|
Returns/
Charges
|
|
Before
Returns/
Charges
|
|
|
% Change
versus Prior
Year Before
Returns/Charges
|
|
Net Sales
|
|
|
|
|
$8,243.5
|
|
|
|
$ (0.1
|
)
|
|
$8,243.4
|
|
|
|
$7,774.3
|
|
|
$ 0.1
|
|
|
$7,774.4
|
|
|
|
6
|
%
|
|
Cost of sales
|
|
|
|
|
1,624.4
|
|
|
|
(0.2
|
)
|
|
1,624.2
|
|
|
|
1,550.3
|
|
|
(1.2
|
)
|
|
1,549.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
|
6,619.1
|
|
|
|
0.1
|
|
|
6,619.2
|
|
|
|
6,224.0
|
|
|
1.3
|
|
|
6,225.3
|
|
|
|
6
|
%
|
|
Gross Margin
|
|
|
|
|
80.3
|
%
|
|
|
|
|
|
80.3
|
%
|
|
|
80.1
|
%
|
|
|
|
|
80.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
5,171.7
|
|
|
|
(36.1
|
)
|
|
5,135.6
|
|
|
|
4,843.8
|
|
|
(12.0
|
)
|
|
4,831.8
|
|
|
|
6
|
%
|
|
Operating Expense Margin
|
|
|
|
|
62.7
|
%
|
|
|
|
|
|
62.3
|
%
|
|
|
62.3
|
%
|
|
|
|
|
62.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
1,447.4
|
|
|
|
36.2
|
|
|
1,483.6
|
|
|
|
1,380.2
|
|
|
13.3
|
|
|
1,393.5
|
|
|
|
6
|
%
|
|
Operating Income Margin
|
|
|
|
|
17.6
|
%
|
|
|
|
|
|
18.0
|
%
|
|
|
17.8
|
%
|
|
|
|
|
17.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
extinguishment
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
19.1
|
|
|
(19.1
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
458.5
|
|
|
|
(0.9)
|
|
|
457.6
|
|
|
|
414.5
|
|
|
11.3
|
|
|
425.8
|
|
|
|
|
|
|
Net Earnings Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Estée Lauder Companies Inc.
|
|
|
|
|
946.4
|
|
|
|
37.1
|
|
|
983.5
|
|
|
|
925.8
|
|
|
21.1
|
|
|
946.9
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings attributable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to The Estée Lauder Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inc. per common share
|
|
|
|
|
2.40
|
|
|
|
.09
|
|
|
2.50
|
|
|
|
2.35
|
|
|
.05
|
|
|
2.40
|
|
|
|
4
|
%
|
|
|
THE ESTÉE LAUDER COMPANIES INC.
As part of the Company’s Strategic Modernization Initiative, the Company
anticipates the continued migration of its operations to SAP-based
technologies, with the majority of its locations being enabled through
calendar 2014. As a result, the Company has experienced, and may
continue to experience, fluctuations in its net sales and operating
results resulting from accelerated orders from certain of its retailers
to provide adequate safety stock to mitigate any potential short-term
business interruption associated with the SMI rollout. In particular,
approximately $94 million of accelerated orders were recorded as net
sales in the fiscal 2013 second quarter that likely would have occurred
in the fiscal 2013 third quarter.
This action created a favorable comparison between the fiscal 2014 and
fiscal 2013 third quarters of approximately $94 million in net sales and
approximately $78 million in operating income, equal to $.13 per diluted
common share and impacted the Company’s operating margin comparisons.
The Company believes the presentation of certain comparative information
in the discussions of the quarterly results in this release that exclude
the impact of the timing of these orders is useful in analyzing the net
sales and operating results of its business.
|
|
|
Reconciliation of Certain Consolidated Statements of Earnings
Accounts Before and After
Returns and Charges and
Accelerated Orders Associated with the Company’s Implementation of
SAP
(Unaudited; In millions, except per share data and
percentages)
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2014
|
|
Three Months Ended
March 31, 2013
|
|
|
|
|
|
|
|
As
Reported
|
|
Returns/
Charges
|
|
SAP
Adjust-
ments
|
|
Before
Charges
/SAP
|
|
As
Reported
|
|
Returns/
Charges
|
|
SAP
Adjust-
ments
|
|
Before
Charges
/SAP
|
|
|
|
% Change
versus Prior
Year Before
Charges/SAP
|
|
Net Sales
|
|
|
|
$2,549.8
|
|
$ 0.0
|
|
|
$ —
|
|
|
$2,549.8
|
|
|
$2,291.8
|
|
$ 0.0
|
|
$ 94.3
|
|
$2,386.1
|
|
|
7%
|
|
Cost of sales
|
|
|
|
498.7
|
|
(0.2
|
)
|
|
—
|
|
|
498.5
|
|
|
443.1
|
|
0.0
|
|
16.2
|
|
459.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
2,051.1
|
|
0.2
|
|
|
—
|
|
|
2,051.3
|
|
|
1,848.7
|
|
0.0
|
|
78.1
|
|
1,926.8
|
|
|
6%
|
|
Gross Margin
|
|
|
|
80.4
|
%
|
|
|
|
|
|
|
80.4
|
%
|
|
80.7
|
%
|
|
|
|
|
80.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
1,709.5
|
|
(38.3
|
)
|
|
—
|
|
|
1,671.2
|
|
|
1,603.6
|
|
1.7
|
|
—
|
|
1,605.3
|
|
|
4%
|
|
Operating Expense Margin
|
|
|
|
67.0
|
%
|
|
|
|
|
|
|
65.5
|
%
|
|
70.0
|
%
|
|
|
|
|
67.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
341.6
|
|
38.5
|
|
|
—
|
|
|
380.1
|
|
|
245.1
|
|
(1.7
|
)
|
78.1
|
|
321.5
|
|
|
18%
|
|
Operating Income Margin
|
|
|
|
13.4
|
%
|
|
|
|
|
|
|
14.9
|
%
|
|
10.7
|
%
|
|
|
|
|
13.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
115.6
|
|
0.0
|
|
|
—
|
|
|
115.6
|
|
|
53.6
|
|
(0.7
|
)
|
25.0
|
|
77.9
|
|
|
|
|
Net Earnings Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Estée Lauder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Companies Inc.
|
|
|
|
213.2
|
|
38.5
|
|
|
—
|
|
|
251.7
|
|
|
178.8
|
|
(1.0
|
)
|
53.1
|
|
230.9
|
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable to The Estée
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lauder Companies Inc. per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common share
|
|
|
|
.54
|
|
.10
|
|
|
—
|
|
|
.64
|
|
|
.45
|
|
.00
|
|
.13
|
|
.59
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE ESTÉE LAUDER COMPANIES INC.
Excluding the impact of the prior-year period shift in orders associated
with the Company’s implementation of SMI, the returns and charges
associated with restructuring activities and the Venezuela remeasurement
charge, net sales and operating results for the three months ended March
31, 2014 would have increased/(decreased) as follows:
|
|
|
(Unaudited)
|
|
|
|
Net Sales As Adjusted
|
|
|
|
|
|
|
|
|
|
Reported
Basis
|
|
|
|
Local
Currency
|
|
|
|
Operating
Results As
Adjusted
|
|
Product Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Skin Care
|
|
|
|
|
7
|
%
|
|
|
|
7
|
%
|
|
|
|
9
|
%
|
|
Makeup
|
|
|
|
|
7
|
|
|
|
|
7
|
|
|
|
|
25
|
|
|
Fragrance
|
|
|
|
|
11
|
|
|
|
|
11
|
|
|
|
|
5
|
|
|
Hair Care
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
62
|
|
|
Other
|
|
|
|
|
26
|
|
|
|
|
27
|
|
|
|
|
100
|
+
|
|
Total
|
|
|
|
|
7
|
%
|
|
|
|
8
|
%
|
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Americas
|
|
|
|
|
5
|
%
|
|
|
|
7
|
%
|
|
|
|
64
|
%
|
|
Europe, the Middle East & Africa
|
|
|
|
|
11
|
|
|
|
|
10
|
|
|
|
|
7
|
|
|
Asia/Pacific
|
|
|
|
|
2
|
|
|
|
|
6
|
|
|
|
|
(13
|
)
|
|
Total
|
|
|
|
|
7
|
%
|
|
|
|
8
|
%
|
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE ESTÉE LAUDER COMPANIES INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited; In millions)
|
|
|
|
|
|
|
|
March 31
2014
|
|
June 30
2013
|
|
|
March 31
2013
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
1,530.2
|
|
|
$
|
1,495.7
|
|
|
|
$
|
1,438.6
|
|
Accounts receivable, net
|
|
|
|
|
1,399.0
|
|
|
1,171.7
|
|
|
|
1,361.9
|
|
Inventory and promotional merchandise, net
|
|
|
|
|
1,215.4
|
|
|
1,113.9
|
|
|
|
989.3
|
|
Prepaid expenses and other current assets
|
|
|
|
|
547.2
|
|
|
515.9
|
|
|
|
496.4
|
|
Total Current Assets
|
|
|
|
|
4,691.8
|
|
|
4,297.2
|
|
|
|
4,286.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment, net
|
|
|
|
|
1,434.9
|
|
|
1,350.7
|
|
|
|
1,296.0
|
|
Other Assets
|
|
|
|
|
1,519.3
|
|
|
1,497.3
|
|
|
|
1,512.9
|
|
Total Assets
|
|
|
|
|
$
|
7,646.0
|
|
|
$
|
7,145.2
|
|
|
|
$
|
7,095.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current debt
|
|
|
|
|
$
|
18.4
|
|
|
$
|
18.3
|
|
|
|
$
|
20.0
|
|
Accounts payable
|
|
|
|
|
512.5
|
|
|
481.7
|
|
|
|
388.2
|
|
Other current liabilities
|
|
|
|
|
1,508.4
|
|
|
1,434.6
|
|
|
|
1,507.7
|
|
Total Current Liabilities
|
|
|
|
|
2,039.3
|
|
|
1,934.6
|
|
|
|
1,915.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
1,327.7
|
|
|
1,326.0
|
|
|
|
1,329.2
|
|
Other noncurrent liabilities
|
|
|
|
|
596.6
|
|
|
582.7
|
|
|
|
643.2
|
|
Total Noncurrent Liabilities
|
|
|
|
|
1,924.3
|
|
|
1,908.7
|
|
|
|
1,972.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
|
|
3,682.4
|
|
|
3,301.9
|
|
|
|
3,206.8
|
|
Total Liabilities and Equity
|
|
|
|
|
$
|
7,646.0
|
|
|
$
|
7,145.2
|
|
|
|
$
|
7,095.1
|
|
|
|
|
|
SELECT CASH FLOW DATA
(Unaudited; In millions)
|
|
|
|
|
|
Nine Months Ended
March 31
|
|
|
|
|
2014
|
|
2013
|
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
950.7
|
|
|
|
$
|
927.9
|
|
|
Depreciation and amortization
|
|
|
280.0
|
|
|
|
|
247.2
|
|
|
Deferred income taxes
|
|
|
(33.7
|
)
|
|
|
|
(43.3
|
)
|
|
Loss on Venezuela remeasurement
|
|
|
38.3
|
|
|
|
|
2.8
|
|
|
Other items
|
|
|
130.3
|
|
|
|
|
96.8
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Increase in accounts receivable, net
|
|
|
(226.7
|
)
|
|
|
|
(297.0
|
)
|
|
Increase in inventory and promotional merchandise, net
|
|
|
(87.4
|
)
|
|
|
|
(4.2
|
)
|
|
Increase in other assets, net
|
|
|
(65.1
|
)
|
|
|
|
(24.0
|
)
|
|
Increase in accounts payable and other liabilities
|
|
|
183.0
|
|
|
|
|
28.0
|
|
|
Net cash flows provided by operating activities
|
|
$
|
1,169.4
|
|
|
|
$
|
934.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
$
|
342.8
|
|
|
|
$
|
305.5
|
|
|
Payments to acquire treasury stock
|
|
|
600.3
|
|
|
|
|
363.2
|
|
|
Dividends paid
|
|
|
225.2
|
|
|
|
|
349.3
|
|
|
|
Copyright Business Wire 2014