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Lauder Earnings Grow to $700.8 million in Fiscal 2011

The Estée Lauder Companies Inc. reported net sales of $8.81 billion for the fiscal year ended June 30, 2011, a 13% increase compared with $7.80 billion reported in the prior year. The company reported net earnings for the year of $700.8 million, compared with $478.3 million last year.

"Fiscal 2011 was an outstanding year for our company," said Fabrizio Freda, president and CEO, The Estée Lauder Companies. "We achieved record sales, gross margin, operating margin, earnings per share and operating cash flow. These results confirm that our strategy is working and has allowed us to reach our original 13% operating margin target two years earlier than anticipated. We had strong sales growth in every geographic region and product category, and notably, we recorded the best performance in North America in a decade, including excellent department store results. Our company also established market leadership in China in prestige, and in the important fast growing travel retail channel the company became the leader in skin care.

"In fiscal 2012, we will continue to do what has been successful: focus our creative ingenuity on the biggest product ideas and marketing opportunities, improve our High-Touch services, aggressively pursue growth in emerging markets and distribution channels and invest in our strategic modernization initiative."

The company's record performance was due, according to a press release, to stronger overall business, particularly from the company's largest brands, helped by a weaker U.S. dollar. The company posted strong across-the-board sales gains in its geographic regions and major product categories.

The skin care category is a strategic priority for the company. The company gained share in this category during the year in certain countries, in the stores where its products are sold. Increased sales of Advanced Night Repair Eye Synchronized Complex from Estée Lauder and Even Better Clinical Dark Spot Corrector from Clinique, which were launched in the prior year, contributed to the net sales growth.

Makeup net sales growth reflected strong increases, primarily from the company's makeup artist brands and certain heritage brands, as well as incremental sales from the acquisition of the Smashbox brand on July 1, 2010.

Incremental sales were generated from the recent launches of Estée Lauder Pleasures Bloom and Hilfiger Loud for Her fragrances. Fragrance operating income increased over 200%, primarily reflecting higher net sales from Estée Lauder and designer fragrances driven by recent product launches, cost reductions and a more strategically focused approach to support spending on successful launches and classics, and in markets and channels with the greatest potential.

Hair care net sales increased, primarily from the recent launch of Be Curly Style-Prep and Control Force from Aveda. Incremental sales in the category also resulted from expanded global distribution.

For the complete results, including by region, see The Estée Lauder Companies website.

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