Yahoo Finance How Estée Lauder Outdid Its Earnings Estimate for the 19th Time
Why Estée Lauder Has Fallen 2 Weeks after Its Fiscal 3Q16 Results
Estée Lauder’s fiscal 3Q16 earnings
Estée Lauder (EL) released its fiscal 3Q16 earnings on May 3, 2016. The quarter ended on March 31, 2016. The company’s diluted net earnings per share (or EPS) rose 4% to $0.76. However, before charges and the impact of foreign currency translations, its diluted net earnings per share rose 5% to $0.73. Its revenue rose 2.9% to $2.7 billion in fiscal 3Q16.
In fiscal 3Q16, Estée Lauder came in ahead of Wall Street analysts’ consensus estimate on earnings for the 19th consecutive quarter. The consensus estimate had projected adjusted EPS of $0.61.
Earnings rise compared to peers
EPS for EL’s fiscal 3Q16 included $0.02 of dilution from acquisitions and $0.03 of unfavorable currency translation. Diluted earnings included charges of $0.02 per share in connection with EL’s global technology infrastructure. They also included a re-measurement charge of ~$0.01 per diluted share both before and after tax, which was related to changes in Venezuelan foreign currency exchange rate mechanisms.
The company’s rise in earnings was driven by strong performances delivered by most brands including MAC, Tom Ford, Clinique, and Smashbox.
Procter & Gamble’s (PG) core earnings fell 3% to $0.86 per share in fiscal 3Q16, while its reported diluted EPS rose 29% to $0.97. Avon’s (AVP) adjusted EPS also fell to -$0.07 in 1Q16 compared to $0.04 in 1Q15.
Coty’s (COTY) fiscal 3Q16 adjusted diluted EPS rose 18.7% to $1.08 compared to $0.91 in fiscal 3Q15. This was due to a favorable tax settlement benefit.
EPS guidance
EL expects its diluted EPS to be in the range of $3.09–$3.14, a rise of $0.02 from its last guidance range. This includes a currency impact of ~$0.27 and a ~$0.05 of dilution from its acquisition of By Kilian. However, on a constant-currency basis, diluted EPS growth is expected to be 10%–12% in fiscal 2016.
In the next part of the series, we’ll take a look at the components that led to EL’s rise in revenue in fiscal 3Q16.
EL makes up 0.9% of the First Trust Large Cap Growth AlphaDEX ETF (FTC).
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