01.16.09
The Estée Lauder Companies Inc. is lowering its net sales and net earnings per share expectations for its second fiscal quarter ended Dec. 31, 2008 and the fiscal year ending June 30, 2009 to reflect the deteriorated global economic conditions during the quarter, which were well beyond the company’s expectations.
Results for the holiday shopping season were worse than previously anticipated and the company’s outlook for the remainder of the fiscal year reflects further uncertainty about future market conditions and consumer spending patterns.
Net sales for the fiscal 2009 second quarter are now expected to decrease approximately 6% versus last fiscal year’s second quarter, compared with previous expectations of sales growth of between 2% and 3%. In addition, the adverse effect of exchange rates is forecasted to lower reported sales for the second quarter by approximately 6.5%.
William P. Lauder, chief executive officer, said in a statement to the press, “The unprecedented global economic crisis produced one of the worst holiday seasons in decades, with many U.S. retailers experiencing double-digit sales declines in nearly all categories. Our business was no exception to the downturn in consumer spending and our second quarter results will come in lower than we expected. Nevertheless, we believe we are growing global market share, even in the exceptionally challenging United States, with some of our brands generating share improvements during the quarter. We believe the current economic conditions, coupled with significant retailer destocking, will continue to negatively affect our sales for the balance of our fiscal year.”
Mr. Lauder added, “We have encountered difficult periods driven by external events before, and have emerged stronger. Overall, our business fundamentals are sound, our balance sheet remains solid and we expect to generate relatively strong cash flow for fiscal 2009. We will protect our business in the near term and stay the course for the long term. We are continuing to focus on our strategies, including making prudent investments to support our brands, while diligently controlling expenses. I am confident that employing these disciplines will drive our future growth and create greater value for our stockholders.”
The company will announce its fiscal 2009 second quarter financial results on Feb. 5.
Results for the holiday shopping season were worse than previously anticipated and the company’s outlook for the remainder of the fiscal year reflects further uncertainty about future market conditions and consumer spending patterns.
Net sales for the fiscal 2009 second quarter are now expected to decrease approximately 6% versus last fiscal year’s second quarter, compared with previous expectations of sales growth of between 2% and 3%. In addition, the adverse effect of exchange rates is forecasted to lower reported sales for the second quarter by approximately 6.5%.
William P. Lauder, chief executive officer, said in a statement to the press, “The unprecedented global economic crisis produced one of the worst holiday seasons in decades, with many U.S. retailers experiencing double-digit sales declines in nearly all categories. Our business was no exception to the downturn in consumer spending and our second quarter results will come in lower than we expected. Nevertheless, we believe we are growing global market share, even in the exceptionally challenging United States, with some of our brands generating share improvements during the quarter. We believe the current economic conditions, coupled with significant retailer destocking, will continue to negatively affect our sales for the balance of our fiscal year.”
Mr. Lauder added, “We have encountered difficult periods driven by external events before, and have emerged stronger. Overall, our business fundamentals are sound, our balance sheet remains solid and we expect to generate relatively strong cash flow for fiscal 2009. We will protect our business in the near term and stay the course for the long term. We are continuing to focus on our strategies, including making prudent investments to support our brands, while diligently controlling expenses. I am confident that employing these disciplines will drive our future growth and create greater value for our stockholders.”
The company will announce its fiscal 2009 second quarter financial results on Feb. 5.