Estee Lauder Predicts Double-Digit Sales Gain

2007-03-06 | 09:19

Estee Lauder Cos. Inc. forecast up to 12 percent annual earnings growth over the next three years as it cuts costs and expands overseas and announced a $750 million share buyback on Tuesday.

"We are exploring multiple avenues for growth and (are) focused in particular on maximizing international opportunities," Chief Executive William Lauder said at an investor meeting in New York.

The company also expects annual sales growth of up to 8 percent through 2010, fueled by expansion of its core brands, makeup and skin products and strength in international markets including Europe and China.

The company expects to cut costs by $200 million over the next three years and plans to buy about 16 million shares of its class A common stock in an "overnight share repurchase" deal with Bank of America.

Under the deal, Estee Lauder expects to buy the shares at a cost of about $750 million later this week from Bank of America. It then expects the bank to purchase an equivalent number of shares in the market over the next several months, Estee Lauder said.