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Estée Lauder Reports $1.99 Billion Q4 Net Sales

Posted: February 1, 2007

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Makeup sales and operating income for the quarter increased, primarily reflecting solid growth from the company's makeup artist brands. The recent launches of Resilience Lift Extreme Ultra Firming Makeup SPF15 and High Gloss Lip Gloss from Estée Lauder along with High Definition Lashes from Clinique contributed solid incremental sales.

Fragrance sales increased compared to the prior year, reflecting strong growth in Europe and the Americas and an easy comparison to the prior-year quarter when the category decreased 11%. The recent launches of DKNY Red Delicious, DKNY Red Delicious Men, Pure White Linen and Unforgivable by Sean John contributed positively to the category's sales, as did Youth Dew Amber Nude from Tom Ford for Estée Lauder.

Sales of hair care products and services increased, primarily due to higher sales at Aveda and Bumble and bumble. Higher sales at Bumble and bumble were primarily due to strong like-door growth and new points of distribution. Aveda net sales growth was due to the recent shipments of Be Curly Shampoo and Conditioner, the international launch of Damage Remedy hair care products, and the recent acquisition of a distributor. Net sales are expected to grow between 6% and 7% in constant currency for the current fiscal year. Diluted earnings per share from continuing operations is now projected to be between $2.10 and $2.20. The company continues to expect to deliver approximately $30 million in incremental savings in the current fiscal year ending June 30, 2007, under its cost savings initiative implemented in fiscal 2006.

On a product category basis, in constant currency, sales in hair care and makeup are expected to be the leading sales growth categories, followed by skin care and fragrance. Geographic region net sales growth in constant currency is expected to be led by Asia/Pacific and Europe, the Middle East & Africa, followed by the Americas.