Estee Lauder Offers Mixed 2017 Outlook as Q4 Results Top Expectations

Cosmetics giant Estee Lauder Companies Inc (NYSE:EL) reported solid fiscal Q4 earnings this morning, but its 2017 forecast fell short of expectations, sending its shares lower in premarket trading.

The New York-based company posted fiscal Q4 net income of $0.44 per share, beating Wall Street’s view of $0.40. Revenue rose 5% from last year to $2.65 billion, which was in-line with estimates.

Looking ahead, EL forecast Q1 EPS to range from $0.73 to $0.77, which would badly miss analyst projections of $0.90. The company said it expected net sales to rise 1% to 2% year-over-year in Q1.

For the full year 2017, EL issued EPS guidance of $3.38 to $3.44, well below Wall Street’s view of $3.53. Sales are forecasted to range from $11.9 to $12.1 billion, higher than analysts’ consensus estimate of $11.93 billion.

From the press release:

Fabrizio Freda, President and Chief Executive Officer, said, “Our fiscal 2016 performance gives us much to celebrate. We again delivered strong constant currency net sales growth and double-digit adjusted constant currency EPS growth, reflecting the compelling products and services we bring to consumers around the world. We capitalized on shifting consumer preferences by leveraging our strength in makeup and positioning our Company to win in luxury fragrances. We nimbly allocated resources and made strategic investments in areas that gave us terrific results, including emerging markets, our makeup category, and the online and specialty-multi retail channels. Importantly, we achieved these results against a backdrop of social and political instability, currency volatility and economic challenges.”

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Estee Lauder shares $3.10 (-3.26%) to $92.00 in premarket trading Friday. Prior to today’s report, EL had gained about 8% year-to-date, which is roughly in-line with the performance of the S&P 500 in the same period.

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