| Estée Lauder Companies Reports 9% Full Year Net Sales Growth |
Company Achieves Diluted EPS from Continuing Operations of $2.16
Provides Fiscal Year 2008 Expectations
NEW YORK--(BUSINESS WIRE)--Aug. 16, 2007--The Estée Lauder Companies Inc. (NYSE: EL) today reported $7.04 billion in net sales for its fiscal year ended June 30, 2007, a 9% increase over the $6.46 billion reported in the prior year. Excluding the impact of foreign currency translation, net sales rose 7%. The Company reported net earnings from continuing operations for the year ended June 30, 2007 of $448.7 million, compared with $324.5 million last year. Diluted net earnings per common share from continuing operations for the year rose 45% to $2.16, compared with $1.49 reported in the prior year. The prior year included $93.0 million, after-tax, or $.43 per diluted share, in special charges associated with the Company's cost savings initiative and tax-related matters. Included in the prior year charges was an operating expense charge of $92.1 million (or $58.0 million after-tax), equal to $.27 per diluted common share, related to the Company's cost savings initiative, which commenced in fiscal 2006. Fiscal year 2006 results also included a net special tax charge, recorded in the fourth quarter, related to a settlement with the Internal Revenue Service, partially offset by the completion and updated computations related to the repatriation of intercompany dividends under the provisions of the American Jobs Creation Act of 2004. On a combined basis, the tax-related matters amounted to a net charge of $35.0 million and negatively impacted diluted earnings per common share for the full fiscal year 2006 by $.16. William P. Lauder, President and Chief Executive Officer, said, "Fiscal 2007 closed with sales topping the $7 billion mark on growth of 9% and EPS of $2.16, which was above our initial estimates. This performance is particularly impressive in light of the substantial headwinds from retailer consolidations around the world. "I am also pleased with the progress we made on our strategic imperatives in fiscal 2007. Specifically, we further optimized our portfolio with the expansion of our fastest-growing brands. We achieved outstanding international growth in both established and emerging markets. In fact, all geographic regions and all product categories saw overall sales growth this year. Equally encouraging is that each of our product categories grew in each region. Distribution diversification continued through expansion in alternative channels, such as the Internet, European pharmacies and direct response television. Our profits also benefited from the cost initiatives we have been pursuing and we are encouraged with the successful pilot launch of our Strategic Modernization Initiative ("SMI") at Aveda. We plan to build on that success in the coming years as we roll out SMI worldwide." Mr. Lauder added, "Looking toward fiscal 2008, we are expecting another year of strong top-line growth and increased earnings, even as we continue our substantial investments in strategic imperatives. We remain active in the pursuit of new opportunities to build on our global success as illustrated by our recent acquisition of the Ojon hair care and skin care brand. Further expansion of our brands and continued development of the prestige beauty segment in emerging markets is fueling momentum internationally, where we see the largest potential." Net earnings and diluted net earnings per common share for the most recent year increased substantially compared with the prior year. The increases are due to current year operating income improvements and the special charges and discontinued operations last year. Fourth Quarter Results For the three months ended June 30, 2007, the Company reported net sales of $1.76 billion, a 10% increase from $1.60 billion in the fourth quarter of fiscal 2006. Excluding the impact of foreign currency translation, net sales rose 7% in the fourth quarter. On a reported basis, as well as in constant currency, net sales increased in each product category and geographic region. The Company reported net earnings from continuing operations for the fourth quarter of fiscal year 2007 of $88.4 million, versus $49.1 million last year, which included the special charges in the prior-year quarter. Diluted earnings per common share from continuing operations for the three months ended June 30, 2007, was $.45 compared with $.23 reported in the same prior-year period. During the three months ended June 30, 2006, the Company recorded special charges of $59.7 million, after-tax, equal to $.28 per diluted share, consisting of (a) an operating expense charge of $38.9 million ($24.7 million after-tax), or $.12 per diluted share, related to the implementation of the cost savings initiative, and (b) tax-related matters of $35.0 million, equal to $.16 per diluted share. Net earnings and diluted net earnings per common share for the quarter each increased substantially compared with the prior-year quarter, due to the special charges and discontinued operations last year.
Full-Year Results by Product Category
----------------------------------------------------------------------
Year Ended June 30
------------------------------------
(Unaudited; Dollars in millions) Net Sales Percent Change
--------------------------------- ----------------- ------------------
Reported Local
2007 2006 Basis Currency
-------- -------- -------- --------
Skin Care $2,601.0 $2,400.8 8.3% 5.8%
Makeup 2,712.7 2,504.2 8.3 6.5
Fragrance 1,308.6 1,213.3 7.9 5.1
Hair Care 377.1 318.7 18.3 17.3
Other 38.1 26.8 42.2 40.7
-------- --------
Subtotal 7,037.5 6,463.8 8.9 6.7
Special charges related to cost
savings initiative - -
-------- --------
Total $7,037.5 $6,463.8 8.9% 6.7%
======== ========
Year Ended June 30
--------------------------
Operating Percent
(Unaudited; Dollars in millions) Income (Loss) Change
-------------------------------------------- --------------- --------
Reported
2007 2006 Basis
------- ------- --------
Skin Care $341.5 $346.4 (1.4)%
Makeup 339.3 329.4 3.0
Fragrance 28.1 7.7 100.0+
Hair Care 42.5 26.5 60.4
Other (0.4) 1.7 (100.0)+
------ ------
Subtotal 751.0 711.7 5.5
Special charges related to cost savings
initiative (1.1) (92.1)
------ ------
Total $749.9 $619.6 21.0%
====== ======
The skin care, makeup and fragrance categories were adversely impacted by fewer department store doors in the United States during the current year as compared to the prior year resulting from retailer consolidations.
Skin Care
-- Net sales of skin care products were primarily fueled by solid
growth in the Company's European and Asian businesses. Several
recent launches, including Advanced Night Repair Concentrate
Recovery Boosting Treatment by Estée Lauder and Repairwear
Lift Firming Night Cream, Continuous Rescue Antioxidant
Moisturizer and All About Eyes Rich from Clinique, contributed
to the overall sales increase. Sales growth also came from the
continued success of the Company's fast growing La Mer brand
and Resilience Lift Extreme Ultra Firming products by Estée
Lauder, as well as the 3-Step Skin Care System from Clinique.
-- Lower sales of some existing products, particularly in certain
of the Company's core brands, partially offset the increases.
-- Operating income decreased reflecting approximately $30
million of expenses related to the Company's pharmacy channel
business for organizational costs, costs to streamline the
distribution of goods and the impairment of goodwill and other
intangible assets. Additionally, improvements in international
skin care results were partially offset by challenges in
certain core brands in the United States.
Makeup
-- Makeup sales for the year increased, primarily reflecting
growth from the Company's makeup artist brands.
-- Higher sales were generated from products such as Double Wear
Foundation and the recent launch of Resilience Lift Extreme
Ultra Firming Makeup SPF 15 from Estée Lauder, along with Full
Potential Lips from Clinique.
-- Makeup operating income increased, primarily due to higher
profits from increased sales from the Company's makeup artist
brands. These results were partially offset by challenges
among certain core brands.
Fragrance
-- Fragrance sales increased, with the vast majority of the
growth in the Europe, the Middle East & Africa region.
Fragrance sales were also up in the Asia/Pacific region and
modestly in the Americas. While current year sales compared
favorably to the prior year, the Company continues to face
challenges in this product category, primarily in the United
States due in part to competitive dynamics.
-- The recent international launches of DKNY Red Delicious, DKNY
Red Delicious Men and Pure White Linen by Estée Lauder
contributed positively to the category's sales, as did solid
growth of Sean John Unforgivable.
-- Lower sales were reported from certain existing fragrances,
such as True Star and True Star Men from Tommy Hilfiger and
Estée Lauder pleasures.
-- Operating income in the fragrance product category increased,
led by profits from higher international sales. Domestic
fragrance operating income also increased, partially offset by
spending behind new and developing brands.
Hair Care
-- Sales of hair care products increased, primarily due to higher
sales at Aveda and Bumble and bumble.
-- Aveda net sales growth was primarily due to sales of
professional color products, the recent launch of Be Curly
shampoo and conditioner, and the acquisition of a distributor.
-- Higher sales at Bumble and bumble were primarily due to a new
hotel amenities program, growth in existing salon distribution
and new points of distribution.
-- Hair care operating profit rose as the increase in sales
outpaced increased spending in support of new distribution
points and product launches.
Full-Year Results by Geographic Region
----------------------------------------------------------------------
Year Ended June 30
-------------------------------------
(Unaudited; Dollars in Net Sales Percent Change
millions)
------------------------------ ----------------- ------------------
Reported Local
2007 2006 Basis Currency
-------- -------- -------- --------
The Americas $3,560.9 $3,446.4 3.3% 3.2%
Europe, the Middle East &
Africa 2,493.4 2,147.7 16.1 10.4
Asia/Pacific 983.2 869.7 13.1 11.0
-------- --------
Subtotal 7,037.5 6,463.8 8.9 6.7
Special charges related to
cost savings initiative - -
-------- --------
Total $7,037.5 $6,463.8 8.9% 6.7%
======== ========
Year Ended June 30
---------------------------
Operating Percent
(Unaudited; Dollars in millions) Income (Loss) Change
------------------------------------------- --------------- --------
Reported
2007 2006 Basis
------- ------- --------
The Americas $336.4 $344.1 (2.2)%
Europe, the Middle East & Africa 321.4 297.5 8.0
Asia/Pacific 93.2 70.1 33.0
------ ------
Subtotal 751.0 711.7 5.5
Special charges related to cost savings
initiative (1.1) (92.1)
------ ------
Total $749.9 $619.6 21.0%
====== ======
The Americas
-- Net sales for the year increased, led by growth from the
Company's makeup artist brands, hair care business and
internet distribution, as well as solid overall gains in
Canada and Latin America. The recent launch of the fragrance
Sean John Unforgivable also contributed to the positive
growth.
-- Lower sales in core brands in the United States reflected
competitive pressures and the negative impact from retailer
consolidation.
-- Operating income in the Americas declined versus the prior
year, reflecting spending behind strategic initiatives
intended to drive future sales growth and the impact of
retailer consolidations. Improved operating income from the
Company's makeup artist brands, hair care and internet
distribution businesses partially offset these results.
Europe, the Middle East & Africa
-- In constant currency, net sales increased in almost every
country in the region. Higher sales were led by double-digit
increases in the Company's travel retail business, the United
Kingdom, Russia and South Africa. Incremental sales in Turkey,
where the Company established an affiliate in fiscal 2007,
contributed to the region's growth.
-- Operating income increased, primarily due to higher results
from the Company's travel retail business, the United Kingdom,
Russia and Germany. Partially offsetting these increases were
lower results, primarily in France, reflecting strategic
investments in the field sales force. Operating income in the
region reflected expenses related to the Company's pharmacy
channel business for organizational costs, costs to streamline
the distribution of goods and the impairment of goodwill and
other intangible assets.
Asia/Pacific
-- Every country in the region reported local currency sales
increases except Thailand, with strong double-digit growth in
China, Hong Kong, Korea, Australia and Singapore. Japan, the
Company's largest Asian market, benefited from an improved
retail environment, with sales up mid-single digits.
-- Operating profit in the region increased substantially, led by
improved results in Hong Kong, China, Australia and Korea.
Full-Year Cash Flows
-- For the twelve months ended June 30, 2007, net cash flows
provided by operating activities from continuing operations
were $667.3 million, compared with $727.3 million in the
prior-year period.
-- The change primarily reflects increases in inventory levels,
due to significant growth in new and emerging international
markets, planned promotional activities and the building of
safety stock to support the recent implementation of the
Company's strategic modernization initiative at Aveda, as well
as accounts receivable balances, principally related to
significant sales growth from the Company's international
operations. Cash payments made during the current fiscal year
related to the Company's fiscal 2006 cost savings initiative
contributed to the decrease. An improvement in net earnings
from continuing operations partially offset the decline.
-- Operating cash flow was utilized primarily for the repurchase
of shares of the Company's Class A Common Stock, capital
investments, dividends, the repayment of debt and the purchase
of the remaining interest in the Bumble and bumble companies.
Estimate of Fiscal 2008 First Quarter and Full Year
First Quarter
-- Net sales are expected to grow between 5% and 7% in constant
currency.
-- Foreign currency translation benefit is expected to be less
than 1% versus the prior-year period.
-- Diluted earnings per share from continuing operations are
projected to be between $.05 and $.11.
Full Year
-- Net sales are forecasted to grow between 7% and 9% in constant
currency.
-- Foreign currency translation is expected to be minimal versus
the prior-year period.
-- Diluted earnings per share from continuing operations are
projected to be between $2.28 and $2.40.
-- On a product category basis, in constant currency, sales in
hair care and skin care are expected to be the leading sales
growth categories, followed by makeup and fragrance.
-- Geographic region net sales growth in constant currency is
expected to be led by Europe, the Middle East & Africa,
followed by Asia/Pacific and the Americas.
Forward-Looking Statements
The forward-looking statements in this press release, including those containing words like "expect," "planned," "may," "could," "anticipate," "estimate," "projected," "forecasted," those in Mr. Lauder's remarks and those in the "Estimate of Fiscal 2008 First Quarter and Full Year" section involve risks and uncertainties. Factors that could cause actual results to differ materially from those forward-looking statements include the following: (1) 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; (2) 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 core brands, including gift with purchase, and in the Company's fragrance business; (3) 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 and ownership of competitors by the Company's customers that are retailers; (4) destocking by retailers; (5) the success, or changes in timing or scope, of new product launches and the success, or changes in the timing or scope, of advertising, sampling and merchandising programs; (6) shifts in the preferences of consumers as to where and how they shop for the types of products and services the Company sells; (7) 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; (8) changes in the laws, regulations and policies (including the interpretation and enforcement thereof) that affect, or will affect, the Company's business, including those relating to its products, changes in accounting standards, tax laws and regulations, 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; (9) 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; (10) changes in global or local conditions, including those due to 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 or suppliers, the Company's operations, the cost and availability of capital which the Company may need for new equipment, facilities or acquisitions, the cost and availability of raw materials and the assumptions underlying the Company's critical accounting estimates; (11) shipment delays, 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; (12) real estate rates and availability, which may affect the Company's ability to increase the number of retail locations at which the Company sells its products and the costs associated with the Company's other facilities; (13) changes in product mix to products which are less profitable; (14) the Company's ability to acquire, develop or implement new information and distribution technologies, on a timely basis and within the Company's cost estimates; (15) the Company's ability to capitalize on opportunities for improved efficiency, such as publicly announced cost-savings initiatives and the success of Stila under new ownership, and to integrate acquired businesses and realize value therefrom; (16) consequences attributable to the events that are currently taking place in the Middle East, including terrorist attacks, retaliation and the threat of further attacks 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, 2006. 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 135 countries and territories under well-recognized brand names, including Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, M-A-C, Bobbi Brown, Tommy Hilfiger, La Mer, Donna Karan, Aveda, Jo Malone, Bumble and bumble, Darphin, Michael Kors, American Beauty, Flirt!, Good Skin(TM), Grassroots, Sean John, Missoni, Daisy Fuentes, Tom Ford Beauty, Mustang, Coach and Ojon. An electronic version of this release can be found at the Company's website, www.elcompanies.com.
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(Unaudited; In millions, except per share data and percentages)
Three Months Ended
June 30 Percent
-------------------
2007 2006 Change
--------- --------- -------
Net Sales $1,762.4 $1,604.6 9.8%
Cost of sales 421.7 397.1
-------- --------
Gross Profit 1,340.7 1,207.5 11.0%
-------- --------
Gross Margin 76.1% 75.3%
Operating expenses:
Selling, general and administrative 1,179.1 1,021.1
Special charges related to cost
savings initiative (A) 0.7 38.9
-------- --------
1,179.8 1,060.0 11.3%
-------- --------
Operating Expense Margin 67.0% 66.1%
Operating Income 160.9 147.5 9.1%
Operating Income Margin 9.1% 9.2%
Interest expense, net 15.7 4.7
-------- --------
Earnings before Income Taxes, Minority
Interest and Discontinued Operations 145.2 142.8 1.7%
Provision for income taxes (B) 56.1 90.3
Minority interest, net of tax (0.7) (3.4)
-------- --------
Net Earnings from Continuing Operations 88.4 49.1 80.0%
Discontinued operations, net of tax (C) 0.2 (4.6)
-------- --------
Net Earnings $ 88.6 $ 44.5 99.1%
======== ========
Basic net earnings per common share:
Net earnings from continuing
operations $ .46 $ .23 96.6%
Discontinued operations, net of tax .00 (.02)
-------- --------
Net earnings $ .46 $ .21 100.0+%
======== ========
Diluted net earnings per common share:
Net earnings from continuing
operations $ .45 $ .23 94.8%
Discontinued operations, net of tax .00 (.02)
-------- --------
Net earnings $ .45 $ .21 100.0+%
======== ========
Weighted average common shares
outstanding:
Basic 193.8 212.0
Diluted 198.2 214.7
Year Ended
June 30 Percent
-------------------
2007 2006 Change
--------- --------- -------
Net Sales $7,037.5 $6,463.8 8.9%
Cost of sales 1,774.8 1,686.6
-------- --------
Gross Profit 5,262.7 4,777.2 10.2%
-------- --------
Gross Margin 74.8% 73.9%
Operating expenses:
Selling, general and administrative 4,511.7 4,065.5
Special charges related to cost
savings initiative (A) 1.1 92.1
-------- --------
4,512.8 4,157.6 8.5%
-------- --------
Operating Expense Margin 64.1% 64.3%
Operating Income 749.9 619.6 21.0%
Operating Income Margin 10.7% 9.6%
Interest expense, net 38.9 23.8
-------- --------
Earnings before Income Taxes, Minority
Interest and Discontinued Operations 711.0 595.8 19.3%
Provision for income taxes (B) 255.2 259.7
Minority interest, net of tax (7.1) (11.6)
-------- --------
Net Earnings from Continuing Operations 448.7 324.5 38.3%
Discontinued operations, net of tax (C) 0.5 (80.3)
-------- --------
Net Earnings $ 449.2 $ 244.2 83.9%
======== ========
Basic net earnings per common share:
Net earnings from continuing
operations $ 2.20 $ 1.51 45.5%
Discontinued operations, net of tax .00 (.37)
-------- --------
Net earnings $ 2.20 $ 1.14 93.6%
======== ========
Diluted net earnings per common share:
Net earnings from continuing
operations $ 2.16 $ 1.49 44.7%
Discontinued operations, net of tax .00 (.37)
-------- --------
Net earnings $ 2.16 $ 1.12 92.5%
======== ========
Weighted average common shares
outstanding:
Basic 204.3 215.0
Diluted 207.8 217.4
(A) In fiscal 2006, as part of an initiative to reduce expenses, the Company commenced streamlined process and organizational changes. The principal component of the initiative was a voluntary separation program offered to employees. During the three and twelve months ended June 30, 2006, the Company recorded charges of $38.9 million and $92.1 million, respectively, related to the implementation of this cost savings initiative. The provision for income taxes related to these charges was $14.2 million and $34.1 million, for the three and twelve months ended June 30, 2006, respectively. The fiscal 2007 charges were primarily related to facility closings. (B) In July 2006, the Company reached a settlement with the Internal Revenue Service (IRS) regarding its examination of the Company's consolidated Federal income tax returns for the fiscal years ended June 30, 1998 through June 30, 2001. The settlement resolved issues raised during the IRS's examination, including transfer pricing and foreign tax credit computations. While the settlement concluded the audit for fiscal years 1998 through 2001, the statement of earnings impact related to these issues was also computed for all subsequent periods and the aggregate impact was recorded in the fourth quarter of fiscal year ended June 30, 2006. The settlement resulted in an increase to the Company's fiscal 2006 income tax provision and a corresponding decrease in fiscal 2006 net earnings of approximately $46 million, or approximately $.21 per diluted common share.
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
During the fourth quarter of fiscal 2006, the Company completed the repatriation of foreign earnings through intercompany dividends under the provisions of the American Jobs Creation Act of 2004 (the "AJCA"). In connection with the repatriation, the Company updated computations of the related aggregate tax impact, resulting in a favorable adjustment of approximately $11 million, or approximately $.05 per diluted common share, to the Company's initial tax charge of $35 million recorded in fiscal 2005. The tax settlement, combined with the favorable adjustment to the fiscal 2005 AJCA-related tax charge, resulted in a net increase to the Company's fiscal 2006 income tax provision and a corresponding decrease in fiscal 2006 net earnings of approximately $35 million, or approximately $.16 per diluted common share. (C) On September 30, 2005, the Company committed to a plan to sell, and on April 10, 2006, completed the sale of certain assets and operations of the reporting unit that marketed and sold Stila brand products. For the three and twelve months ended June 30, 2007, $0.2 million and $0.5 million of operating income, both net of tax, are reflected as discontinued operations in the above summary of consolidated results. These results reflected the conclusion of transitional distribution services provided to the purchaser. The Company recorded a charge of $4.6 million (net of $2.6 million tax benefit) and $80.3 million (net of $43.3 million tax benefit) as discontinued operations for the three and twelve months ended June 30, 2006, respectively. The charge reflected the then-anticipated loss on the sale of the business of $3.6 million, net of tax, and $69.9 million, net of tax, and the operating loss of $1.0 million, net of tax, and $10.4 million, net of tax, for the three and twelve months ended June 30, 2006, respectively. Net sales associated with the discontinued operations were $6.8 million and $45.1 million for the three and twelve months ended June 30, 2006, respectively.
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(Unaudited; Dollars in millions)
Three Months Ended
June 30 Percent Change
------------------- ------------------
Reported Local
2007 2006 Basis Currency
--------- --------- -------- --------
NET SALES
By Region:
The Americas $ 859.5 $ 816.5 5.3% 5.2%
Europe, the Middle East &
Africa 661.4 569.8 16.1 10.1
Asia/Pacific 241.5 218.3 10.6 9.2
-------- --------
Total $1,762.4 $1,604.6 9.8% 7.5%
======== ========
By Product Category:
Skin Care $ 664.0 $ 622.2 6.7% 4.1%
Makeup 670.7 622.1 7.8 5.9
Fragrance 314.1 265.9 18.1 15.0
Hair Care 103.7 88.8 16.8 15.7
Other 9.9 5.6 76.8 76.8
-------- --------
Total $1,762.4 $1,604.6 9.8% 7.5%
======== ========
OPERATING INCOME
By Region:
The Americas $ 81.4 $ 84.9 (4.1)%
Europe, the Middle East &
Africa 66.3 88.2 (24.8)
Asia/Pacific 13.9 13.3 4.5
-------- --------
Subtotal 161.6 186.4 (13.3)
Special charges related to
cost savings initiative (0.7) (38.9)
-------- --------
Total $ 160.9 $ 147.5 9.1%
======== ========
By Product Category:
Skin Care $ 68.9 $ 94.0 (26.7)%
Makeup 73.5 83.9 (12.4)
Fragrance 6.9 2.5 100.0+
Hair Care 11.6 6.8 70.6
Other 0.7 (0.8) 100.0+
-------- --------
Subtotal 161.6 186.4 (13.3)
Special charges related to
cost savings initiative (0.7) (38.9)
-------- --------
Total $ 160.9 $ 147.5 9.1%
======== ========
Year Ended
June 30 Percent Change
------------------- -----------------
Reported Local
2007 2006 Basis Currency
--------- --------- -------- --------
NET SALES
By Region:
The Americas $3,560.9 $3,446.4 3.3% 3.2%
Europe, the Middle East &
Africa 2,493.4 2,147.7 16.1 10.4
Asia/Pacific 983.2 869.7 13.1 11.0
-------- --------
Total $7,037.5 $6,463.8 8.9% 6.7%
======== ========
By Product Category:
Skin Care $2,601.0 $2,400.8 8.3% 5.8%
Makeup 2,712.7 2,504.2 8.3 6.5
Fragrance 1,308.6 1,213.3 7.9 5.1
Hair Care 377.1 318.7 18.3 17.3
Other 38.1 26.8 42.2 40.7
-------- --------
Total $7,037.5 $6,463.8 8.9% 6.7%
======== ========
OPERATING INCOME
By Region:
The Americas $ 336.4 $ 344.1 (2.2)%
Europe, the Middle East &
Africa 321.4 297.5 8.0
Asia/Pacific 93.2 70.1 33.0
-------- --------
Subtotal 751.0 711.7 5.5
Special charges related to
cost savings initiative (1.1) (92.1)
-------- --------
Total $ 749.9 $ 619.6 21.0%
======== ========
By Product Category:
Skin Care $ 341.5 $ 346.4 (1.4)%
Makeup 339.3 329.4 3.0
Fragrance 28.1 7.7 100.0+
Hair Care 42.5 26.5 60.4
Other (0.4) 1.7 (100.0)+
-------- --------
Subtotal 751.0 711.7 5.5
Special charges related to
cost savings initiative (1.1) (92.1)
-------- --------
Total $ 749.9 $ 619.6 21.0%
======== ========
THE ESTEE LAUDER COMPANIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; In millions)
June 30 June 30
2007 2006
-------- --------
ASSETS
Current Assets
Cash and cash equivalents $ 253.7 $ 368.6
Accounts receivable, net 860.5 771.2
Inventory and promotional merchandise, net 855.8 766.3
Prepaid expenses and other current assets 269.4 270.8
-------- --------
Total Current Assets 2,239.4 2,176.9
-------- --------
Property, Plant and Equipment, net 880.8 758.0
Other Assets 1,005.5 849.2
-------- --------
Total Assets $4,125.7 $3,784.1
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 60.4 $ 89.7
Accounts payable 314.7 264.5
Other current liabilities 1,125.6 1,084.0
-------- --------
Total Current Liabilities 1,500.7 1,438.2
-------- --------
Noncurrent Liabilities
Long-term debt 1,028.1 431.8
Other noncurrent liabilities and minority interest 397.9 291.8
Total Stockholders' Equity 1,199.0 1,622.3
-------- --------
Total Liabilities and Stockholders' Equity $4,125.7 $3,784.1
======== ========
SELECTED CASH FLOW DATA
(Unaudited; In millions)
Year Ended
June 30
-----------------
2007 2006
--------- -------
Cash Flows from Operating Activities
Net earnings $ 449.2 $244.2
Depreciation and amortization 207.2 198.4
Deferred income taxes 9.9 (74.3)
Discontinued operations (0.5) 80.3
Other items 66.2 54.8
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable,
net (68.0) 14.6
Decrease (increase) in inventory and
promotional merchandise, net (70.8) 1.9
Increase in accounts payable and other accrued
liabilities 104.4 138.8
Other operating assets and liabilities, net (30.3) 68.6
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Net cash flows provided by operating
activities from continuing operations $ 667.3 $727.3
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Capital expenditures 312.1 260.6
Repayments and redemptions of debt 37.2 179.8
Payments to acquire treasury stock 1,004.3 400.5
Dividends paid 103.6 85.4
CONTACT: The Estée Lauder Companies Inc. SOURCE: The Estée Lauder Companies Inc. |
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