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Lauder 2003 Sales Reach $5B

For the first time in its history, Lauder’s sales in 2003 breached the $5 billion mark, increasing 7.9 percent to $5.12 billion.

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By region, sales in the Americas advanced 3 percent to $2.95 billion, due to new and some existing products and growth from virtually all developing brands. In addition, operating income rose because of its prior restructuring initiatives. In Europe, the Middle East and Africa, sales rose 19 percent to $1.51 billion and 8 percent excluding the impact of currency fluctuations. Operating profits increased due to higher results in the United Kingdom, Spain, Italy and Greece. Sales in the Asia-Pacific region climbed 8 percent to $657.8 million and 3 percent in local currencies.

Langhammer said the company’s commitment to breakthrough innovation and product leadership will continue to be a priority in 2004, noting he expects hair care and fragrance to lead growth, followed by skin care and makeup, including the new fragrance Beyond Paradise from the Estée Lauder brand, which will be on counters this month, and Clinique’s Simply, which will be rolled out in the U.S. next month.

He also said that in view of the changes in consumers’ shopping habits, the firm is embarking on a strategy to seize opportunities in alternate distribution channels. “We are in the process of developing a number of brands to allow us to capitalize on these opportunities around the globe,” he said, noting this strategy calls for “meaningful investment during the development phase” for which the firm set aside funds in 2004.

The company predicted earnings in 2004 to range between $1.45 and $1.50 a share on a 7 to 8 percent increase in sales. For the first half, Lauder forecast earnings to run between 78 cents to 81 cents a share as it continues to invest in advertising, sampling and merchandising and support significant launch activity on a 8 percent to 9 percent sales increase.

“I do feel better about recent trends,” Langhammer said. “June and July sell-throughs in department stores improved in the mid-single-digit range and I am seeing our own stores sales doing very well with mid-teen increases over the period.”
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