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Estee Lauder Beats Q2 Estimates; Reports Weak Outlook; Shares Fall (EL)

Estee Lauder (EL ) reported higher than expected second quarter results on Thursday, but shares fell due to its weak outlook for the third quarter and FY2015.

EL's Earnings in Brief

  • EL reported earnings of $435.7 million, or $1.13 per share, up from $432.5 million, or $1.09 per share, last year.
  • Sales rose 1% to $3.04 billion from $3.02 billion a year ago.
  • On average, analysts expected to see EPS of $1.05 and $3.01 billion in revenue.
  • Looking forward, EL expects to see Q3 EPS between 45 cents and 50 cents, while analysts expect EPS of 68 cents.
  • For FY2015, EL now expects to see EPS in the range of $2.72 – $2.80 and adjusted EPS between $2.82 and $2.90. Analysts expect to see EPS of $2.84.

CEO Commentary

Fabrizio Freda, President and CEO of EL, commented: “Our successful performance this quarter reflected solid global demand for our brands, including a strong holiday season. Our results further demonstrate our ability to grow despite currency headwinds and softness in several countries. For the quarter, our sales and profits came in higher than planned as we continued to leverage our diverse growth engines and capitalized on high-growth opportunities, which translated into excellent results in several of our higher-margin brands and channels, while efficiently managing costs. Key drivers of our performance were the United Kingdom and emerging markets, our makeup and luxury brands, and online, specialty-multi and freestanding store channels."

EL's Dividend

EL paid its last 24 cent quarterly dividend on December 15. We expect the company to declare its next dividend in the coming weeks.

Stock Performance

Shares of EL were down $2.55, or 3.51%, during pre-market trading Thursday. The stock is down 4.79% YTD.

EL Dividend Snapshot

As of market close on February 4, 2015

EL dividend yield annual payout payout ratio dividend growth

Click here to see the complete history of EL dividends.

The Bottom Line

Estee Lauder (EL ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.