By Andria Cheng
NEW YORK (Dow Jones) -- Beauty giant Estee Lauder Cos. said
Monday that its fiscal third-quarter profit plunged 70%, hurt by a
stronger dollar and declining demand in the Americas and European
regions.
Profit dropped to $27.2 million, or 14 cents a share, from $90.1
million, or 46 cents, a year earlier. Sales in the quarter ended
March 31 declined 9.8% to $1.7 billion. They would have fallen 2%
minus the impact of currency translations.
Excluding restructuring charges, the company said it would have
earned 16 cents a share. Analysts, on average, estimated Estee
Lauder to earn 5 cents a share, according to FactSet.
The company forecast per-share profit excluding non-recurring
items to be between $1.32 to $1.44 a share for the year with sales
declining as much as 3% excluding the impact of currency
translations.
Wall Street analysts expected an average profit of $1.36 a
share, according to FactSet.
Estee Lauder (EL) shares rose 6% to $32.99 in pre-market
trading.
Estee Lauder has been hurt by the economic downturn that has cut
into consumer demand and led its department store customers to
lower inventory. Shoppers also have traded down to cheaper drug
store cosmetics and skincare products, analysts have said. Like
other companies, Estee Lauder has pared costs and said it's seeking
additional opportunities to be more efficient.
Sales in the Americas dropped 8.7% to $804.4 million. In Europe,
they tumbled 17% to $583.5 million. In Asia, they rose 3.8% to
$308.6 million.
By product categories, skin care sales fell 6.3% to $709
million. Make up sales declined 8.1% to $694.5 million. Fragrance
sales tumbled 28% to $187.7 million. Hair care sales dropped 7.7%
to $90.6 million.