Exhibit 99.1
THE News
ESTEE Contact:
LAUDER Investor Relations:
COMPANIES INC. Dennis D'Andrea
(212) 572-4384
Media Relations:
767 Fifth Avenue Sally Susman
New York, NY 10153 (212) 572-4430
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FOR IMMEDIATE RELEASE:
ESTEE LAUDER COMPANIES LOWERS OUTLOOK FOR
FISCAL 2002 FIRST QUARTER AND FULL YEAR
New York, NY, September 28, 2001 - The Estee Lauder Companies Inc. (NYSE: EL)
today announced it is lowering its net sales and net earnings expectations for
its fiscal 2002 first quarter and full year. The lower expectations, due in
large part to recent events, reflect further uncertainty about consumer
confidence and spending, inventory contraction by U.S. retailers, and a
significant reduction in worldwide travel, directly affecting the Company's
travel retail business. The Company cannot predict with certainty the extent or
duration of these conditions and remains cautious that the current economic
climate may affect the overall holiday season and the Company's results for the
first half of the fiscal year.
Fred H. Langhammer, President and Chief Executive Officer, said, "Every company
is facing unexpected challenges brought about by the recent dramatic events,
which have further compounded an already soft economy. Despite these challenges,
we will grow our Company this year. We have encountered difficult periods
before, driven by external events, and have responded with determination and
achieved growth. This year will be no exception."
Mr. Langhammer added, "We are continuing to focus on our strategies to grow
through product innovation, distribution enhancements and program execution. Our
business fundamentals are solid, our Company is strong and we will stay on the
course of action that has made us successful."
The Company currently expects a net sales increase for the fiscal 2002 full year
of between 5% and 6% on a constant currency basis versus the prior fiscal year,
compared with its previous expectations of 7% to 9% sales growth. As a result,
the Company expects diluted earnings per share for fiscal 2002 to be between
$1.45 and $1.50. The Company continues to anticipate that its business
performance will accelerate during the fiscal year, with stronger growth in the
second half than in the first half. The adverse effect of exchange rates could
temper reported sales growth for the full fiscal year by approximately one
percentage point.
Net sales for the fiscal 2002 first quarter are expected to be flat to up 1% on
a constant currency basis versus last fiscal year's first quarter, compared with
previous expectations of sales growth of between 4% and 5%. Given the revised
sales expectations, the Company anticipates that diluted earnings per share for
the first quarter will be approximately $.38. In addition to the cautious retail
outlook and the importance of the last two weeks of September for shipments in
the Americas region, the fiscal 2002 first quarter will face a very difficult
comparison with the same prior-year quarter. Last year, the Company reported an
overall 10% sales increase in local currency and strong growth in each region
and most product categories. The first quarter net sales in constant currency
are expected to be led by low double-digit growth in Asia/Pacific and
mid-single-digit growth in Europe, the Middle East & Africa, while the Americas
is expected to report a low single-digit sales decline. On a product category
basis, in constant currency, the Company expects its strongest sales growth from
hair care, off of a smaller base, followed by a solid increase in makeup and
modest growth in skin care, while fragrance sales are expected to post a small
decline. The adverse effect of exchange rates in Europe and Asia could temper
reported sales growth by one to two percentage points.
Forward-looking Statements
--------------------------
The forward-looking statements in this press release, including those containing
words like "will," "expect," "anticipate," and "estimate" and those in Mr.
Langhammer's remarks involve risks and uncertainties. Factors that could cause
actual results to differ materially from those forward-looking statements
include the following:
(i) increased competitive activity from companies in the skin care,
makeup, fragrance and hair care businesses, some of which have
greater resources than the Company does;
(ii) the Company's ability to develop, produce and market new
products on which future operating results may depend;
(iii) consolidations and restructurings in the retail industry
causing a decrease in the number of stores that sell the Company's
products, an increase in the ownership concentration within the
retail industry, ownership of retailers by the Company's competitors
and ownership of competitors by the Company's customers that are
retailers;
(iv) shifts in the preferences of consumers as to where and how they
shop for the types of products and services the Company sells;
(v) social, political and economic risks to the Company's foreign
manufacturing, distribution and retail operations, including changes
in foreign investment and trade policies and regulations of the host
countries and of the United States;
(vi) changes in the laws, regulations and policies, including changes
in accounting standards, and legal or regulatory proceedings, that
affect, or will affect, the Company in the United States and abroad;
(vii) foreign currency fluctuations affecting the Company's results
of operations and the value of its foreign assets, the relative
prices at which the Company sells its products and its foreign
competitors sell products in the same markets and the Company's
operating and manufacturing costs outside of the United States;
(viii) changes in global or local economic conditions that could
affect consumer purchasing and the cost and availability of capital
to the Company, which may be needed for new equipment, facilities or
acquisitions;
(ix) shipment delays, depletion of inventory and increased production
costs resulting from disruptions of operations at any of the
facilities which, due to consolidations in the Company's
manufacturing operations, now manufacture nearly all of the Company's
supply of a particular type of product (i.e., focus factories);
(x) real estate rates and availability, which may affect the
Company's ability to increase the number of retail locations at which
the Company's products are sold;
(xi) changes in product mix to products which are less profitable;
(xii) the Company's ability to develop e-commerce capabilities, and
other new information and distribution technologies, on a timely
basis and within the Company's cost estimates;
(xiii) the Company's ability to integrate acquired businesses and
realize value therefrom; and
(xiv) consequences attributable to the events that took place in New
York City and Washington, D.C. on September 11, 2001.
The Estee Lauder Companies Inc. is one of the world's leading manufacturers and
marketers of quality skin care, makeup, fragrance and hair care products. The
Company's products are sold in over 120 countries and territories under
well-recognized brand names, including Estee Lauder, Clinique, Aramis,
Prescriptives, Origins, M.A.C, Bobbi Brown, Tommy Hilfiger, La Mer, jane, Donna
Karan, Aveda, Stila, Jo Malone and Bumble and bumble.
An electronic version of this release can be found at the Company's Website,
www.elcompanies.com.