Analysts expect international business will offset U.S. weakness.
10.27.08
Business at department stores has declined dramatically since September as a financial meltdown and weaker economy have made consumers more concerned about job security and their retirement savings. At the same time, a slowdown in airline travel is likely to crimp momentum for the cosmetics company, which sells its products in airport duty free shops.
Both factors could put a damper on Estée Lauder's fiscal first quarter results, which the company will report on Tuesday. Still, analysts like the New York-based company's earnings potential in a tough economy.
iti Investment Research analyst Wendy Nicholson, who rates the stock "Buy," expects healthy sales in the fiscal first quarter, despite a tough economy.
Ms. Nicholson expects sales in the company's Americas segment will rise a "small" 2 percent, but sales will be "far more robust" for the company's international segment. She said revenue in Europe, the Middle East and Africa will increase 15 percent, while sales in the Asia/Pacific should rise 17.9 percent.
Ms. Nicholson predicts sales growth will be most robust for the New York company's makeup segment, followed by skin care products.