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"Our strong top line growth reflected gains in all major product categories within each geographic region, as well as favorable foreign currency movement," said William P. Lauder, president and CEO, The Estée Lauder Companies. "At the same time, the company's cost savings initiatives and disciplined expense control aided the bottom line. As a result, we generated a 260 basis point increase in operating margin this quarter and better than expected earnings per share growth.
"Our strong earnings and cash flow give us the opportunity to accelerate and increase our investments in our business, enabling us to grow for the long term. Taking a shorter term perspective, the solid first half and our confidence in our business for the balance of the fiscal year permits us to raise our full year earnings per share estimate to $2.10 to $2.20."
According to the company, the skin care, makeup and fragrance categories were adversely impacted by fewer department store doors during the current-year quarter as compared to the prior-year quarter, resulting from the merger of Federated Department Stores, Inc. and The May Department Stores Company.
Net sales of skin care products benefited from the recent launches of Advanced Night Repair Concentrate Recovery Boosting Treatment by Estée Lauder, and Repairwear Lift and All About Eyes Rich from Clinique. The continued success of Resilience Lift Extreme Ultra Firming Cremes and Advanced Night Repair Eye Recovery Complex by Estée Lauder also contributed to growth.