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Lauder Reports Record Earnings in Fiscal 2010
Posted: August 12, 2010
The Estée Lauder Companies Inc. reported financial results for the fourth quarter and fiscal year ended June 30, 2010, that were sharply higher than the prior-year periods. For the year, the company had net sales of $7.80 billion, a 6% increase compared with $7.32 billion reported in the prior fiscal year. In fiscal 2010, the company generated its largest full-year increase in operating income and operating margin since becoming a public company in 1995. The company reported net earnings for the year of $478.3 million, compared with $218.4 million last year.
“In fiscal 2010, we surpassed our own financial goals," said Fabrizio Freda, president and CEO, said, The Estée Lauder Companies Inc. "In this first full year of our long-term plan, we made substantial progress advancing our strategic goals and aligned many facets of our company to continue to achieve sustainable, profitable growth. We successfully launched initiatives on our biggest brands, took advantage of improving retail environments, saw international passenger traffic pick up, which helped the strong growth in our travel retail business, and realized greater-than-expected cost savings. We generated an impressive performance in our international business and produced strong sales growth in skin care, both of which are key areas of our strategic focus.
“Looking at fiscal 2011, we intend to build upon the solid foundation that we established this past year to achieve our strategic and financial goals. In this new fiscal year we will increase investment spending behind targeted advertising, merchandising and sampling for major initiatives on our biggest brands and markets. Additionally, we will further capitalize on opportunities that will strengthen our product categories and distribution channels, expand our geographic presence and develop our brand portfolio. We are committed to prioritizing resources and taking action that will generate even greater stockholder value.”
The company posted sales gains in each of its geographic regions and most major product categories. Strong sales growth came from the company’s international businesses, particularly in travel retail, Asia/Pacific and emerging markets. Modest sales gains were reported in the Americas. These results reflect solid increases from higher-margin product launches and the positive effect of foreign currency translation.
All product categories and geographic regions benefited from company-wide efforts to reduce or eliminate non-value added costs, as well as significant improvement in cost of sales from favorable product mix and enhanced inventory management, including SKU reductions, resulting in substantial improvements in their operating income.