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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.”