Estee Lauder net falls on tax settlement, charge
SAN FRANCISCO – Estee Lauder Cos. said profit fell in the latest quarter, hurt by a restructuring charge and a tax settlement.The New York-based cosmetics company, whose brands include Aveda, Clinique and Bobbi Brown, on Wednesday said it earned $44.5 million, or 21 cents a share, on revenue of $1.6 billion in the fiscal fourth quarter ended June 30.Earnings included special charges of 28 cents a share related to a cost-cutting plan and a tax settlement. Excluding those charges, profit was 49 cents per share.Analysts were expecting earnings of 48 cents a share excluding charges, according to Thomson Financial.In the same period a year earlier, Estee Lauder earned $66.6 million, or 30 cents a share, on revenue of $1.53 billion.Estee Lauder is projecting that travel retail sales won’t be affected by the new air-travel restrictions brought on last week by a major terrorist threat in London.The new limits prohibit travelers from carrying liquid or gel products on planes, meaning that they can’t transport lotions, lipstick or even mascara in carryon bags.In fiscal 2006, the company’s travel retail business comprised about 7 percent of sales and about 20 percent of operating income.Estee Lauder said it expects first-quarter earnings of 15 cents to 20 cents a share, and sales growth between 5 percent and 7 percent. Analysts had been expecting first-quarter earnings of 33 cents a share.The company said results will be hurt by the closing of stores last year due to the merger of Federated Department Stores Inc. and May.Cosmetics companies have struggled with department-store mergers, which have cut the number of selling locations.The company said significant planned increases in investment in certain core, fast-growing and developing brands are also expected to temper fiscal first-quarter results.Estee Lauder expects fiscal 2007 earnings of $2 to $2.10 a share and sales growth between 5 percent and 7 percent. Analysts had been expecting earnings of $2.10 a share.Estee Lauder shares fell $1.21, or 3.3 percent, to $35.97 in morning trading on the New York Stock Exchange.