Estee Lauder posts strong Q4 but outlooks is unsure

By Simon Pitman

- Last updated on GMT

Related tags Revenue

Estee Lauder reported a double digit rise in revenues and almost doubled its net profits for the fourth quarter, but rising commodity prices and economic instability make the future look uncertain.

The colour cosmetics and fragrance giant said tha tsales were up 12 per cent to $2.06bn (€1.4bn), up from $1.84bn in the corresponding period last year, and a figure that marginally beat analysts' expectations.

Combined with the increased sales and cost savings initiatives, the company's net profit increased from $23.9m in the corresponding period last year, to reach $41.1bn, a figure that was in line with analaysts' expectations.

The sales were driven by big gains in the Europe. Middle East and Africa and Asia Pacific markets, where sales were sales were up 13 per cent and 16 per cent respectively.

Sales driven by airport sales in Asia

The company said that the strong performance in the Asia Pacific region was mainly driven by an increased rate of flying, which in turn led to improved duty free sales - an important category for the company.

In the Americas region, sales grew by 10 per cent, driven by stronger gains in the Latin American markets, but the company also pointed out that North America had the best performance in a decade, driven by stronger department store sales.

For the full year net income rose by 47 per cent to $700,8m, while net revenues rose by 13 per cent, up from $7.8bn to $8.8bn.

Make-up and skin care lead the way

By category, skin care continues to have the strongest growth during the financial year, with sales up 15 per cent to $3.72bn, while colour cosmetic sales also showed strong gains, increasing by 13 per cent to $3.37bn.

However, the company is predicting slower growth in the next financial year, predicting that sales will grow at between 6 and 8 per cent, excluding the effects of currency translation.

The figure reflects a less uncertain global outlook, particularly in light of the fact that many of the major economies in the developed markets are facing major national and global debt crisis.

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