Estee Lauder (EL) Tops Q2 EPS by 34c, Beats on Revenue; Comments on Guidance
Estee Lauder (NYSE: EL) reported Q2 EPS of $0.88, $0.34 better than the analyst estimate of $0.54. Revenue for the quarter came in at $4.28 billion versus the consensus estimate of $4.19 billion.
Leveraging the progress the Company has made through the first half of fiscal 2024, its full year outlook reflects the following assumptions and expectations:
- A return to double-digit organic net sales growth in the second half of fiscal 2024.
- Following meaningful progress made during the first half of fiscal 2024, continued reduction of retailer inventory in Asia travel retail to achieve retailers’ target levels by the end of the fiscal 2024 third quarter.
- Clinique doubling down in Active Derma with new campaigns starting in the United States and the United Kingdom in the second half of fiscal 2024.
- An incremental in-period charge in cost of goods sold, which is pressuring gross margin in both the fiscal 2024 third quarter and for the full year.
- Stronger operating margin in the second half of fiscal 2024 compared to the first half, leveraging the return to organic net sales growth.
- Full year effective tax rate of approximately 35% largely due to the estimated geographical mix of earnings in fiscal 2024.
- Improvements in the Company’s inventory balance and days to sell for fiscal year 2024.
- Excludes the impacts from the remaining payment for DECIEM anticipated in May 2024 primarily related to net interest expense.
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