Estee Lauder Closes Out an Exceptional Fiscal 2019

The company’s fiscal fourth-quarter earnings report exceeded expectations across all levels. 

The ongoing trade war has taken many U.S. companies hostage and left them vulnerable to tariffs and falling sales. So it’s refreshing to see companies like Estee Lauder doing well in spite of this economic uncertainty.

Estee Lauder released its fiscal fourth-quarter earnings report this week and the results were exciting. The company’s sales and full-year guidance rose, largely thanks to an increasing demand for the company’s skincare line. 

The company’s shares rose 5% in premarket trading and on Tuesday, it reached a new 52-week high. Here is an overview of the earnings report as well as what to expect from Estee Lauder going forward.

Takeaways from the earnings report

Estee Lauder has been investing heavily in its skincare line in recent years, as consumer demand for these products continues to grow. This investment has obviously paid off since the company has seen strong gains in this area. 

Revenue from the company’s skincare line grew 15% to reach $1.59 billion during the fourth quarter. And many of these gains were due to the company’s strong sales in the Asia-Pacific region. 

In this region, the company’s skincare sales grew by 18%. Most of these sales came from China, Hong Kong, and emerging markets in Southeast Asia.

The company’s net sales rose 9% to reach $3.59 billion, surpassing forecasts of $3.53 billion. Adjusted earnings were 64 cents per share, as opposed to 53 cents per share, which is what investors were expecting. 

But most exciting of all to investors is that the company raised its full-year guidance. The company expects sales to grow by 7% to 8% in fiscal 2020, instead of the 6% originally anticipated. 

Where is the company headed from here?

Estee Lauder has been a publicly-traded company since 1996 and 2019 has been its best year yet. The company’s shares are up 56% year to date and 44% from a year earlier. 

Going into the next fiscal year, the company did caution that trade war concerns and other geopolitical issues could affect its sales. But given the company’s 2019 success, management seemed optimistic about its prospects going forward.