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EL · Estée Lauder Companies

30 filings

10-K

EL 10-K Annual Reports

Estée Lauder Companies - 30 annual reports

Filing record · 2016–202610-K1110-Q338-K126

2026
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2026
The Estée Lauder Companies Inc. reported fiscal 2026 (year ended June 30, 2026) net sales of $15.05 billion, up from $14.33 billion in fiscal 2025, with reported net sales increasing 5% and constant-currency net sales increasing 3%. Operating income was $780 million compared with an operating loss of $785 million in fiscal 2025, and net earnings attributable to the company were $182 million, or $0.50 per diluted share, versus a net loss of $1.13 billion in the prior year. Excluding restructuring charges, the securities class action settlement, impairments and talc settlement charges, diluted net earnings per share as adjusted were $2.51, up 66% as reported, and operating income as adjusted rose 47% to $1.69 billion. Growth was led by skin care and fragrance, with Mainland China net sales up 12% and EUKEM up 6%. Gross margin rose to 75.5% from 74.0%, reflecting net benefits from the Profit Recovery and Growth Plan (PRGP). The company updated its Restructuring Program estimates to a final net reduction of approximately 10,000 positions and total charges of $1.748 billion, with annual target gross benefits of approximately $1.2 billion. The filing states the company expects tariffs to have an adverse effect on fiscal 2027 profitability and cash flows. Total debt as a percent of total capitalization was 66%, and the company declared a quarterly dividend of $0.35 per share payable September 15, 2026. The Lauder family holds approximately 82% of voting power. Key risks flagged in the filing include ongoing challenges in Western Europe and the United States, tariff uncertainty, reliance on travel retail, litigation including cosmetic talc claims whose number of pending state-court cases rose to 118 from 84, and limited excess fair value on certain trademarks, notably TOM FORD with a carrying value of $1.805 billion exceeding fair value by 19%.
Aug 19, 2026
2025
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2025
The Estée Lauder Companies Inc. reported fiscal 2025 (year ended June 30, 2025) net sales of $14.33 billion, down 8% from $15.61 billion in fiscal 2024, with volume declines of 10% partially offset by 2% pricing. Declines were concentrated in skin care (down 12%) and were driven mainly by lower travel retail sales, plus softness in mainland China, North America and Korea. The company swung to an operating loss of $785 million (operating margin of -5.5%) and a net loss attributable to the company of $1.13 billion, or $(3.15) per diluted share, compared with net earnings of $390 million in fiscal 2024. Results were weighed down by $1.27 billion of goodwill and other intangible asset impairments, primarily relating to the TOM FORD, Too Faced and Dr.Jart+ brands, a $159 million talcum litigation settlement charge, and $486 million of restructuring and other charges. Management's Beauty Reimagined strategy and the expanded Profit Recovery and Growth Plan (PRGP) are central to the outlook. The Restructuring Program now estimates a net reduction of approximately 5,800 to 7,000 positions, total charges of $1.2 billion to $1.6 billion, and annual target gross benefits of $800 million to $1 billion. The company expects a return to a double-digit operating margin over the next few years. Management expects continued challenges in travel retail, the U.S. and Western Europe, and anticipates higher tariff rates to adversely affect fiscal 2026 profitability and cash flows. Total debt as a percent of total capitalization rose to 65% from 59%, cash and cash equivalents fell to $2.92 billion, and the quarterly dividend was declared at $0.35 per share.
Aug 20, 2025
2024
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2024
The Estée Lauder Companies Inc. reported fiscal 2024 (year ended June 30, 2024) net sales of $15.61 billion, down 2% from $15.91 billion in fiscal 2023, with reported net sales decreasing due to volume declines of 8% partially offset by pricing of 7%. Operating income fell 36% to $970 million, and operating margin declined to 6.2% from 9.5%, reflecting a $291 million goodwill impairment and $180 million trademark impairment tied to Dr.Jart+, plus $124 million in restructuring and other charges. Net earnings attributable to the company fell to $390 million, and diluted EPS was $1.08 versus $2.79 a year earlier. Skin care, the largest category, declined 4% in net sales, driven by mainland China softness and Asia travel retail; Asia/Pacific net sales fell 6%. Management is pursuing a Profit Recovery and Growth Plan to rebuild margins in fiscal 2025 and 2026, with a restructuring program expected to cost $500 million to $700 million and yield annual gross benefits of $350 million to $500 million. The company completed its acquisition of the remaining interest in DECIEM (The Ordinary) on May 31, 2024, and reported cash and cash equivalents of $3.40 billion, total debt of $7.77 billion, and cash from operating activities of $2.36 billion. The Lauder family holds approximately 84% of the voting power, and the company disclosed an ongoing securities class action and a 2024 dividend of $.66 per share declared on August 16, 2024.
Aug 19, 2024
2023
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2023
The Estée Lauder Companies Inc. reported fiscal 2023 (year ended June 30, 2023) net sales of $15.91 billion, down 10% from $17.74 billion in fiscal 2022, with reported declines in every geographic region. The filing attributes the decline primarily to a slower-than-anticipated recovery in Asia travel retail and mainland China, along with retailer inventory tightening, pressure from the strong U.S. dollar, and license terminations for certain designer fragrances. Skin care, the largest category, fell 17% to $8.20 billion, while hair care rose 3% and fragrance was virtually flat. Profitability deteriorated sharply. Operating income fell to $1.51 billion from $3.17 billion, and operating margin dropped to 9.5% from 17.9%. Diluted EPS was $2.79 versus $6.55 in fiscal 2022. The results include $207 million of trademark impairments (Dr.Jart+, Too Faced and Smashbox), $85 million of restructuring charges, and a gross margin decline to 71.3% from 75.7%. Net earnings attributable to the company were $1.01 billion, versus $2.39 billion a year earlier. Balance sheet and cash flow shifted materially with the $2.55 billion acquisition of the TOM FORD brand. Total debt as a percentage of total capitalization rose to 59% from 49%, cash flow from operations fell to $1.73 billion from $3.04 billion, and the company issued $2.0 billion of senior notes in May 2023. The Board declared a $0.66 quarterly dividend on August 17, 2023, and share repurchases remain suspended. The Lauder family controls approximately 84% of voting power. The filing also discloses a cybersecurity incident, which it expects to reduce diluted EPS by approximately $0.07 in the fiscal 2024 first quarter.
Aug 18, 2023
2022
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2022
The Estée Lauder Companies Inc. reported fiscal 2022 (year ended June 30, 2022) net sales of $17.74 billion, up from $16.22 billion in fiscal 2021, with reported net sales increasing 9% and 10% in constant currency. Growth was led by fragrance (up 30%), makeup (up 11%) and hair care (up 11%), while skin care rose 4%. Reported operating income increased to $3.17 billion from $2.62 billion, with operating margin rising to 17.9% from 16.1%. Net earnings attributable to the company fell to $2.39 billion from $2.87 billion, and diluted EPS declined to $6.55 from $7.79; fiscal 2021 included a $848 million gain on DECIEM, which drove the comparison. Adjusted diluted EPS rose to $7.24 from $6.45 on a non-GAAP basis. The company recorded goodwill and intangible impairments totaling $241 million, including a $230 million charge on Dr.Jart+ trademarks in Asia/Pacific, and restructuring charges tied to the Post-COVID Business Acceleration Program, now estimated at $500 million to $515 million in total. Management expects annual benefits of $390 million to $410 million once that program is fully implemented. Net cash from operations was $3.04 billion, down from $3.63 billion, while capital expenditures rose to $1.04 billion. Cash and equivalents ended at $3.96 billion, and the company paid $2.31 billion to repurchase treasury stock during the year. The Lauder family controls about 84% of voting power, and China-related exposure remained significant, with mainland China accounting for approximately 34% of net sales in fiscal 2022. The company declared a quarterly dividend of $0.60 per share on August 17, 2022.
Aug 24, 2022
2021
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2021
The Estée Lauder Companies Inc. reported fiscal 2021 (year ended June 30, 2021) net sales of $16.22 billion, up from $14.29 billion in fiscal 2020, with reported net sales growth of 13% (11% in constant currency). Skin care was the primary driver, with net sales of $9.48 billion, up 28% as reported, while makeup declined 12% to $4.20 billion. Asia/Pacific net sales rose 29% to $5.49 billion, and Europe, the Middle East & Africa rose 11% to $6.95 billion, while The Americas was essentially flat at $3.80 billion. Operating income rose to $2.62 billion from $606 million, with operating margin of 16.1% versus 4.2% in the prior year. The improvement was driven largely by the absence of prior-year impairments, which totaled $1.43 billion in fiscal 2020 versus $188 million in fiscal 2021. Net earnings attributable to the company were $2.87 billion, or $7.79 diluted EPS, compared with $684 million, or $1.86, a year earlier. Fiscal 2021 results included an $847 million gain on the previously held DECIEM equity interest, which the company increased to approximately 76% fully diluted ownership in May 2021 for $1.09 billion in cash. The company ended the year with cash and cash equivalents of $4.96 billion and total debt of $5.57 billion. Cash flow from operations was $3.63 billion, and total debt as a percent of total capitalization fell to 48% from 61%. The company announced the two-year Post-COVID Business Acceleration Program, with expected restructuring charges of $400 million to $500 million and annual benefits of $300 million to $400 million once fully implemented. The Lauder family controls approximately 85% of voting power.
Aug 27, 2021
2020
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2020
The Estée Lauder Companies Inc. reported fiscal 2020 (year ended June 30, 2020) net sales of $14.29 billion, down from $14.86 billion in fiscal 2019, with the decline driven in the second half of the year by the COVID-19 pandemic. Net earnings attributable to the company fell to $684 million ($1.86 diluted EPS) from $1.785 billion ($4.82 diluted EPS), largely reflecting $1.426 billion of goodwill, other intangible and long-lived asset impairments, including $812 million of goodwill impairment and $614 million of other intangible impairments, concentrated in the Too Faced, BECCA, Smashbox, GLAMGLOW and Editions de Parfums Frédéric Malle reporting units. Operating income declined to $606 million from $2.313 billion, and the operating margin fell to 4.2% from 15.6%. Skin care was the only category to grow meaningfully, with net sales of $7.38 billion, while makeup fell to $4.79 billion. The company took cost and cash-conservation measures, including suspending share repurchases, skipping the June 2020 dividend, and drawing its $1.5 billion revolver fully before repaying $750 million in June 2020 and the remaining $750 million in August 2020. Total debt rose to $6.14 billion from $3.41 billion, and cash rose to $5.02 billion from $2.99 billion. The Have & Be (Dr. Jart+) acquisition for $1.268 billion in cash was completed in December 2019. On August 20, 2020, the company announced a two-year Post-COVID Business Acceleration Program with estimated charges of $400 million to $500 million and annual benefits of $300 million to $400 million. Management said it cannot reliably estimate the fiscal 2021 impact of COVID-19 with the precision it had before the pandemic. For investors, the key issues are the sharp earnings decline from impairments and COVID-related disruption, the higher leverage (total debt to capitalization rose to 61% from 44%), and whether the restructuring program and recovery in travel retail and China can restore profitability. Control by the Lauder family, with about 86% of voting power, remains a structural consideration.
Aug 28, 2020
2019
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2019
The Estée Lauder Companies Inc. reported fiscal 2019 (year ended June 30, 2019) net sales of $14.86 billion, up 9% as reported and 11% in constant currency from $13.68 billion in fiscal 2018. Net earnings attributable to the company were $1.785 billion, or $4.82 per diluted share, compared with $1.108 billion, or $2.95 per diluted share, in fiscal 2018. Operating income rose to $2.31 billion from $2.06 billion, with operating margin of 15.6%. Diluted EPS excluding restructuring, impairments, contingent consideration changes and tax items rose 18% to $5.34 per share, as stated in the filing's non-GAAP reconciliation. Growth was led by skin care, which increased 17% to $6.55 billion, driven by Estée Lauder and La Mer in China and Hong Kong and in travel retail. Makeup grew 4% to $5.86 billion, while fragrance declined 1% and hair care rose 2%. The Americas declined 5% to $4.74 billion and posted an operating loss of $194 million, reflecting Smashbox goodwill and trademark impairments and weaker U.S. department store traffic. Europe, the Middle East & Africa and Asia/Pacific grew 15% and 21%, respectively. The filing notes that Leading Beauty Forward restructuring charges are now estimated at $950 million to $990 million, before taxes, with annual net benefits of $425 million to $475 million. The balance sheet shows cash and cash equivalents of $2.99 billion and total debt of $3.41 billion at June 30, 2019. Net cash from operating activities was $2.52 billion, and share repurchases totaled $1.56 billion in payments to acquire treasury stock. The company declared a dividend of $.43 per share payable September 16, 2019. The Lauder family controls approximately 86% of voting power, and the company is a controlled company under NYSE rules.
Aug 23, 2019
2018
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2018
The Estée Lauder Companies Inc. reported fiscal 2018 (year ended June 30, 2018) net sales of $13.68 billion, up from $11.82 billion in fiscal 2017, with reported net sales growth of 16% (13% in constant currency). Operating income rose to $2.05 billion from $1.69 billion, and operating margin increased to 15.0% from 14.3%. Net earnings attributable to the company fell to $1.11 billion from $1.25 billion, and diluted EPS declined to $2.95 from $3.35, largely reflecting a $351 million provisional Transition Tax and other Tax Cuts and Jobs Act charges that raised the effective tax rate to 43.6%. Excluding these and other items, the company reports diluted EPS as adjusted of $4.51 versus $3.47, up 30%. Growth was broad across product categories, led by skin care (up 24% to $5.60 billion) and makeup (up 11% to $5.63 billion), with Europe, the Middle East & Africa (up 21%) and Asia/Pacific (up 29%) as the strongest regions, driven by travel retail and China. The Americas grew 4%, but operating income there fell to $211 million from $284 million. Cash flow from operations rose to $2.57 billion from $1.80 billion, and cash and cash equivalents increased to $2.18 billion. Total debt was $3.54 billion, and total debt as a percent of total capitalization decreased to 43% from 45%. The filing also highlights the Leading Beauty Forward restructuring program, whose total estimated charges were raised to $900 million to $950 million before taxes, with estimated annual net benefits of $350 million to $450 million. The Lauder family controls approximately 87% of voting power through its Class A and Class B shares, and the company is a controlled company under NYSE rules. The filing also notes a review of certain product advertising claims that management does not expect to be material.
Aug 24, 2018
2017
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2017
The Estée Lauder Companies Inc. reported net sales of $11.82 billion for fiscal 2017 (year ended June 30, 2017), up from $11.26 billion in fiscal 2016, with net earnings attributable to the company of $1.25 billion and diluted earnings per share of $3.35, compared with $2.96 in fiscal 2016. Reported operating income rose to $1.69 billion from $1.61 billion, though operating margin was flat at 14.3%. The company cited growth in makeup, skin care and fragrance, supported by the fiscal 2017 acquisitions of Too Faced and BECCA, partly offset by softer U.S. brick-and-mortar department store traffic and unfavorable foreign currency translation of approximately $187 million on net sales. Charges associated with restructuring and other activities rose to $212 million under the multi-year Leading Beauty Forward program, which the company expects to total $600 million to $700 million before taxes. Balance sheet and cash flow changed meaningfully during the year. Total assets rose to $11.57 billion from $9.22 billion, largely reflecting the acquisitions, with goodwill increasing to $1.92 billion and other intangible assets to $1.33 billion. Total debt increased to $3.57 billion from $2.24 billion following February 2017 senior note issuances, and total debt as a percent of total capitalization rose to 45% from 39%. Net cash provided by operating activities was $1.80 billion, and cash and cash equivalents ended the year at $1.14 billion. The company paid $1.32 per share in dividends declared during fiscal 2017, compared with $1.14 in fiscal 2016. Governance and risk remain significant considerations for investors. Members of the Lauder family beneficially own shares with approximately 87% of the outstanding voting power, and the company is a 'controlled company' under New York Stock Exchange rules. The company also reported a goodwill impairment of $28 million and other intangible asset impairments of $3 million tied to the RODIN olio lusso and Editions de Parfums Frédéric Malle brands, and it disclosed that a previously reported material weakness in general information technology controls had been remediated as of June 30, 2017.
Aug 25, 2017
2016
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2016
The Estée Lauder Companies Inc. reported fiscal 2016 (year ended June 30, 2016) net sales of $11.26 billion, up from $10.78 billion in fiscal 2015, and net earnings attributable to the company of $1.11 billion, up from $1.09 billion. Diluted EPS was $2.96 versus $2.82. Operating income was essentially flat at $1.61 billion, which the filing attributes to $134.7 million of restructuring charges offsetting a favorable comparison from fiscal 2015 accelerated orders of about $127 million and unfavorable foreign currency translation of about $134 million. Makeup was the strongest category, with net sales rising to $4.70 billion from $4.30 billion, while skin care declined slightly to $4.45 billion. The company announced the multi-year "Leading Beauty Forward" initiative in May 2016, expecting restructuring and other charges of $600 million to $700 million before taxes and annual net benefits of $200 million to $300 million once fully implemented. Cash flow from operations was $1.79 billion, down from $1.94 billion, and total debt rose to $2.24 billion from $1.62 billion after new senior notes were issued. The Lauder family holds approximately 87% of voting power, and KPMG issued an adverse opinion on internal control over financial reporting due to a material weakness in general information technology controls, which management expects to remediate in fiscal 2017. The filing also reports that the largest customer, Macy's Inc., accounted for 9% of fiscal 2016 consolidated net sales, and that the company repurchased about 9.9 million shares for $835.0 million during the year.
Aug 24, 2016
2015
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2015
The Estée Lauder Companies Inc. reported fiscal 2015 (year ended June 30, 2015) net sales of $10.78 billion, down 2% from $10.97 billion in fiscal 2014, as reported. The decline was driven entirely by a $519 million negative impact from foreign currency translation and an approximately $357 million unfavorable comparison to accelerated orders recorded in the fiscal 2014 fourth quarter ahead of the July 2014 SMI rollout. Excluding those items, net sales would have increased 6%. Operating income fell 12% to $1.61 billion, and diluted EPS declined to $2.82 from $3.06. Adjusted for the accelerated orders and Venezuela remeasurement charges, diluted EPS was $3.05 versus $2.95 in fiscal 2014, with adjusted operating income flat at $1.74 billion. By product category, skin care net sales fell 6% to $4.48 billion, while makeup rose 2% to $4.30 billion, fragrance declined 1% to $1.42 billion, and hair care rose 3% to $530.6 million. Makeup, along with the company's makeup artist and luxury brands, was cited as a key growth driver, while Estée Lauder and Clinique sales were challenged. Cash flow from operations increased to $1.94 billion from $1.54 billion, and the company returned capital through $927.7 million of share repurchases and $0.92 per share in dividends declared. Total debt rose to $1.64 billion after issuing $300 million of 4.375% Senior Notes due 2045, and the company used cash to acquire four brands for $237.2 million at closing, with additional contingent payments expected from fiscal 2018 through 2020. The Lauder family controls approximately 87% of the voting power, and the company is a controlled company under NYSE rules. Investors should weigh the strong cash generation and continued brand investment against the reported sales decline, currency headwinds, and concentrated governance structure.
Aug 20, 2015
2014
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2014
The Estée Lauder Companies Inc. reported net sales of $10,968.8 million for fiscal 2014 (year ended June 30, 2014), up from $10,181.7 million in fiscal 2013, with growth across all product categories and geographic regions. Operating income rose to $1,827.6 million from $1,526.0 million, and net earnings attributable to the company increased to $1,204.1 million, or $3.06 per diluted share, from $2.58. The filing notes that approximately $178 million of sales and $127 million of operating income were pulled forward from the fiscal 2015 first quarter into the fourth quarter of fiscal 2014 ahead of the July 2014 SMI rollout, which management expects to adversely affect first-quarter and full-year fiscal 2015 results. Other items affecting the year included a $38.3 million Venezuela remeasurement charge and restructuring-related adjustments. The company's cash flow from operations was $1,535.2 million, up from $1,226.3 million, and cash and cash equivalents ended the year at $1,629.1 million. Total debt was $1,343.1 million, and total debt as a percent of total capitalization decreased to 26% from 29%. The Board declared a $.20 quarterly dividend on August 14, 2014, and the company repurchased about 8.9 million shares for $617.1 million during fiscal 2014. The Lauder family holds 86.7% of voting power, which makes the company a controlled company under NYSE rules. The filing highlights continued softness in certain Southern European countries and Korea, a cautious view of the U.S. retail environment, and the effect of Chinese government actions on travel retail spending. Management identifies skin care, the company's most profitable category, as a strategic priority, and reports skin care net sales of $4,769.8 million, makeup of $4,210.2 million, and fragrance of $1,425.0 million.
Aug 20, 2014
2013
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2013
The Estée Lauder Companies Inc. reported fiscal 2013 (year ended June 30, 2013) net sales of $10.18 billion, up from $9.71 billion in fiscal 2012, and operating income of $1.53 billion versus $1.31 billion. Net earnings attributable to the Company were $1.02 billion, or $2.58 per diluted share, compared with $856.9 million and $2.16 per diluted share a year earlier. The filing states that skin care, the most profitable category, contributed $4.47 billion in net sales, with makeup at $3.88 billion, fragrance at $1.31 billion and hair care at $488.9 million. Growth was broad, with all major product categories and geographic regions increasing, and the Company noted continued weakness in certain Southern European countries and Korea, plus caution about a slowing U.S. retail environment and China's growth trend. The Company ended the year with cash and cash equivalents of $1.50 billion and total debt of $1.34 billion, with no commercial paper outstanding. In August 2012 it issued $500 million of senior notes and used proceeds to redeem its 7.75% 2013 Senior Notes. The Company transitioned to a quarterly dividend, with cash dividends declared of $1.08 per share in fiscal 2013 versus $0.525 in fiscal 2012. It also closed its multi-year cost savings Program in the second quarter of fiscal 2013, now expecting total cumulative charges of $320 million to $330 million. Governance remains concentrated: members of the Lauder family control 86% of the voting power, and the Company is a controlled company under New York Stock Exchange rules. The Company also disclosed that Macy's Inc. accounted for 11% of consolidated net sales in fiscal 2013, and that the Darphin-related litigation in Paris is under appeal, with the Company having paid €25.3 million into escrow pending the outcome.
Aug 23, 2013
2012
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2012
The Estée Lauder Companies Inc. reported net sales of $9,713.6 million for fiscal 2012 (year ended June 30, 2012), up from $8,810.0 million in fiscal 2011, with operating income of $1,311.7 million versus $1,089.4 million and net earnings attributable to the Company of $856.9 million, or $2.16 per diluted share, compared with $700.8 million, or $1.74, in the prior year. Growth was reported across all major product categories and geographic regions, led by skin care net sales of $4,225.2 million and a travel retail business the filing describes as a continuing source of sales growth and profitability. The filing also notes continued weakness in certain Western European countries, Korea and Australia, and cautions that macroeconomic factors may temper growth in China. The Company is controlled by the Lauder family, which holds 86.9% of the outstanding voting power, and the Company is a "controlled company" exempt from certain NYSE governance requirements. Management reports a long-term cost savings Program with charges recorded through June 30, 2012 of $302.6 million against expected savings of approximately $760 million to $785 million. Cash and cash equivalents were $1,347.7 million at June 30, 2012, and total debt was $1,288.1 million. In August 2012 the Company issued $250.0 million of 2.35% notes due 2022 and $250.0 million of 3.70% notes due 2042, and it plans to use about $250 million of proceeds to redeem its 2013 Senior Notes. Richard W. Kunes is retiring as Chief Financial Officer, with Tracey T. Travis succeeding him on August 20, 2012. The Company faces a pending appeal in a Paris commercial dispute over the former owner of the Darphin brand, who was awarded €22.9 million ($28.8 million) by the Paris Commercial Court; the Company has paid €25.3 million under the judgment and maintains an accrual it believes reflects the probable outcome of the appeal.
Aug 17, 2012
2011
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2011
The Estée Lauder Companies Inc. reported fiscal 2011 (year ended June 30, 2011) net sales of $8,810.0 million, up from $7,795.8 million in fiscal 2010, with all geographic regions and product categories growing. Operating income rose to $1,089.4 million (12.4% of net sales, versus 10.1% in the prior year), and net earnings attributable to the company increased to $700.8 million, or $3.48 per diluted share, from $2.38. The filing attributes the margin improvement largely to the cost savings Program launched in February 2009, with restructuring and related charges of $59.4 million in fiscal 2011 versus $84.7 million in fiscal 2010. Cash flow from operations was $1,027.0 million, and cash and cash equivalents ended the year at $1,253.0 million. Total debt was $1,218.1 million, and total debt as a percent of total capitalization (excluding noncontrolling interest) fell to 32% from 39%. The company repurchased about 5.0 million Class A shares for $376.9 million during the year, and declared an annual dividend of $.75 per share versus $.55 a year earlier. Management said it does not expect the same levels of year-over-year improvement to continue in fiscal 2012, and expects gross margin gains to be offset by higher operating expense as a share of sales. The Lauder family controls about 86.8% of the voting power, so the company is a "controlled company" exempt from certain NYSE governance requirements. Macy's Inc. was the largest customer at 11% of fiscal 2011 net sales.
Aug 22, 2011
2010
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2010
The Estée Lauder Companies Inc. reported net sales of $7,795.8 million for fiscal 2010 (year ended June 30, 2010), up from $7,323.8 million in fiscal 2009, with net sales increasing 6% and excluding currency translation increasing 5%. Operating income rose to $789.9 million from $418.4 million, and net earnings attributable to the company were $478.3 million, or $2.38 per diluted share, compared with $218.4 million, or $1.10 per diluted share, in the prior year. Results include total restructuring charges of $84.7 million in operating income and a $27.3 million pre-tax charge on debt extinguishment, and management describes fiscal 2010 as the first year of a long-term strategy running through fiscal 2013. Skin care was the largest category at $3,227.1 million in net sales, up 12%, and makeup reached $2,978.2 million, up 5%, while fragrance declined 1% to $1,136.9 million. By region, Europe, the Middle East & Africa grew to $2,859.3 million and Asia/Pacific to $1,510.1 million, while the Americas was $3,442.1 million. Cash flow from operations was $956.7 million, cash and equivalents ended at $1,120.7 million, and total debt was $1,228.4 million. The Lauder family controls approximately 87.1% of voting power, and the company reported that the Smashbox acquisition closed on July 1, 2010 for approximately $250 million.
Aug 20, 2010
2009
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2009
The Estée Lauder Companies Inc. reported fiscal 2009 (year ended June 30, 2009) net sales of $7.32 billion, down from $7.91 billion in fiscal 2008, with net earnings falling to $218.4 million ($1.10 diluted EPS) from $473.8 million ($2.40 diluted EPS). Operating income declined to $418.4 million from $810.7 million, and the filing attributes the decline to customer destocking, a soft department store environment in the Americas, weak travel retail and Europe, and currency effects. Total charges associated with restructuring activities were $91.7 million in operating income, and the company launched a cost savings program targeting $350 million to $450 million in pre-tax charges and $450 million to $550 million in savings. By product category, skin care ($2.89 billion), makeup ($2.83 billion) and fragrance ($1.15 billion, down 20%) all declined, while Asia/Pacific net sales grew 9% to $1.30 billion. Cash flow from operations was $696.0 million, cash and equivalents rose to $864.5 million, and total debt was $1.42 billion after the issuance of $300.0 million of 7.75% Senior Notes due 2013. The company's Lauder family controls approximately 87.6% of voting power, a concentration of control that investors should weigh alongside the company's reduced share repurchases and fiscal 2009 earnings decline. The company's long-term strategy runs through fiscal 2013, with a stated vision to be the global leader in prestige beauty. Management expects continued challenges in North American department stores and in the global retail environment, and it notes ongoing risks from customer concentration (Macy's Inc. accounted for 12% of net sales) and the Blydenburgh landfill environmental matter.
Aug 19, 2009
2008
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2008
The Estée Lauder Companies Inc. filed its annual report on Form 10-K for the fiscal year ended June 30, 2008. Net sales rose 12%, or $873.3 million, to $7,910.8 million, with growth in all product categories and geographic regions; excluding foreign currency translation, net sales increased 8%. Operating income increased 8%, or $60.8 million, to $810.7 million, though operating margin declined to 10.3% of net sales from 10.7%. Net earnings increased 5%, or $24.6 million, to $473.8 million, and diluted net earnings per share improved 11% from $2.16 to $2.40. Growth was led by Europe, the Middle East & Africa, where net sales increased 21% to $3,006.7 million and operating income rose 35% to $433.1 million. The Americas, the largest region at $3,711.5 million in net sales, grew only 4%, and its operating income declined 32% to $228.3 million amid difficulties in the U.S. department store channel. Asia/Pacific net sales increased 21% to $1,192.6 million. Management cited economic uncertainty in the United States and continued softness in department stores, and expects continued challenges in the U.S. fragrance category. Balance sheet and cash flow data show total assets of $5,011.2 million, total debt of $1,196.9 million, and stockholders' equity of $1,653.2 million at June 30, 2008. Cash provided by operating activities was $690.1 million, and cash used for investing activities was $478.5 million, including the Ojon acquisition. The Lauder family controls approximately 87.8% of the voting power, and Macy's, Inc. accounted for 12% of fiscal 2008 consolidated net sales.
Aug 21, 2008
2007
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2007
The Estée Lauder Companies Inc. reported fiscal 2007 (year ended June 30, 2007) net sales of $7,037.5 million, up 9% from $6,463.8 million, with growth in all product categories and geographic regions. Operating income rose 21% to $749.9 million, and operating margin improved to 10.7% of net sales from 9.6% in the prior year, which had included a $92.1 million cost savings charge. Net earnings increased to $449.2 million, and diluted EPS rose to $2.16 from $1.12. Growth was led by Europe, the Middle East & Africa, where net sales rose 16% to $2,493.4 million, and Asia/Pacific, up 13% to $983.2 million. The Americas grew 3% to $3,560.9 million. Balance sheet and capital allocation changed materially. The company repurchased 22.5 million shares for $1,004.3 million, including a $750.0 million accelerated share repurchase in March 2007. Total debt rose to $1,088.5 million from $521.5 million after the issuance of $300.0 million of 5.55% Senior Notes due 2017 and $300.0 million of 6.00% Senior Notes due 2037. Stockholders' equity fell to $1,199.0 million from $1,622.3 million, and total debt was 48% of total capitalization at June 30, 2007, versus 24% a year earlier. Operating cash flow declined to $661.6 million from $709.8 million, reflecting higher inventory and receivables. Management highlighted continuing challenges, including retailer consolidation (Macy's, Inc. accounted for 14% of fiscal 2007 net sales), weak economics in the fragrance category, and pharmacy-channel and impairment charges of about $30 million in skin care. The Lauder family controls about 89.1% of the voting power.
Aug 28, 2007
2006
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2006
The Estée Lauder Companies Inc. reported fiscal 2006 (year ended June 30, 2006) net sales of $6,463.8 million, up from $6,280.0 million in fiscal 2005, with growth in makeup, skin care and hair care offset by lower fragrance sales. Operating income fell to $619.6 million from $726.8 million, reflecting $92.1 million in special charges related to a cost savings initiative, which included a voluntary separation program for 494 employees. Net earnings declined to $244.2 million, or $1.12 per diluted share, from $406.1 million, or $1.78 per diluted share, in fiscal 2005. Net earnings were also reduced by discontinued operations of $80.3 million, mainly related to the April 2006 sale of the Stila brand, and by an approximately $35 million net increase in the income tax provision from an IRS settlement and an AJCA repatriation adjustment. Cash flow from operations improved to $709.8 million from $478.1 million, and total debt declined to $521.5 million from $714.7 million at June 30, 2005. The company repurchased about 11.2 million Class A shares for $400.5 million during fiscal 2006 and paid an annual dividend of $.40 per share. Management expects to complete the purchase of the remaining equity interest in Bumble and bumble in fiscal 2007, and the filing notes that the fragrance category and certain core brands remain challenging, along with retailer consolidation, with Federated Department Stores' acquisition of The May Department Stores Company making one customer 16% of consolidated net sales. The company also disclosed several legal matters, including a consolidated securities class action filed in March 2006 following the Shin complaint, a related shareholder derivative action, and a New York State environmental claim tied to the Blydenburgh landfill. Management believes none of these will have a material adverse effect on results of operations or financial condition, though the securities actions are at an early stage and the company intends to defend them vigorously.
Aug 25, 2006
2005
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2005
The Estée Lauder Companies Inc. reported fiscal 2005 (year ended June 30, 2005) net sales of $6,336.3 million, up from $5,790.4 million in fiscal 2004, with growth in all product categories and all geographic regions. Operating income rose to $720.6 million from $644.0 million, and net earnings increased to $406.1 million, or $1.78 per diluted share, from $342.1 million, or $1.48 per diluted share. The filing attributes the net earnings increase partly to an approximately $35 million tax charge tied to a plan to repatriate about $690 million of foreign earnings under the American Jobs Creation Act, which lifted the effective tax rate to 41.2% from 37.7%. Management notes that fragrance remains challenging and that fiscal 2006 earnings will be affected by the adoption of SFAS No. 123(R) and by the August 2005 merger of Federated Department Stores and The May Department Stores Company, which is a major customer. The company's balance sheet shows total assets of $3,885.8 million, cash of $553.3 million and total debt of $714.7 million, up from $535.3 million, with total debt at 30% of total capitalization versus 24% a year earlier. The company repurchased about 10.7 million Class A shares for $438.6 million during the year. Control remains with the Lauder family, which holds approximately 87.7% of voting power, and three customers accounted for 22% of net sales. Key risks for investors include concentration among department store customers, litigation including a consumer class action over anti-aging skin care claims and a Portuguese tax assessment totaling several tens of millions of euros, and the continued challenge in the fragrance category.
Sep 2, 2005
2004-A
Estée Lauder Companies Annual Report (Amendment), Year Ended Jun 30, 2004
The Estée Lauder Companies Inc. reported fiscal 2004 (year ended June 30, 2004) net sales of $5,790.4 million, up from $5,096.0 million in fiscal 2003, with growth in all product categories and all geographic regions. Operating income rose to $644.0 million from $503.7 million, and operating margin was 11.1% of net sales versus 9.9% in the prior year, which included a $22.0 million legal settlement charge. Net earnings were $342.1 million, or $1.48 per diluted share, compared with $1.26 in fiscal 2003. Net sales growth excluding foreign currency translation was 9%, and the company cited the weakening U.S. dollar as a benefit in Europe, the Middle East & Africa and Asia/Pacific. The company's balance sheet and cash flow strengthened during the year. Cash and cash equivalents rose to $611.6 million, and net cash from operating activities was $669.8 million. Total debt increased to $535.3 million, reflecting the issuance of $200.0 million of 5.75% Senior Notes due 2033 and the reclassification of $68.4 million of remaining 2015 Preferred Stock. The company redeemed $291.6 million of preferred stock in June 2004 following the death of Mrs. Estée Lauder, and it repurchased approximately 2.8 million shares for $115.9 million during the year. Management expects lower interest expense in fiscal 2005 as a result of the preferred stock redemption. The Lauder family controls approximately 88.4% of the voting power of common stock. Pending legal matters include a New York State environmental suit over the Blydenburgh landfill, with the State's cleanup costs estimated at $16 million, and a Portuguese tax assessment appeal. Management believes neither will have a material adverse effect on consolidated financial condition.
Nov 5, 2004
2004
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2004
The Estée Lauder Companies Inc. reported fiscal 2004 (year ended June 30, 2004) net sales of $5,790.4 million, up from $5,096.0 million in fiscal 2003, with operating income of $644.0 million versus $503.7 million, and net earnings of $342.1 million versus $319.8 million. Management attributes the sales growth to all product categories and all geographic regions, led by double-digit growth in Europe, the Middle East & Africa and Asia/Pacific. Excluding foreign currency translation, net sales increased 9%. Prior-year operating results included a $22.0 million legal settlement charge, and fiscal 2004 included a $33.3 million after-tax charge from discontinued operations related to the sale of the jane brand business in February 2004. Balance sheet and capital structure changed notably during the year. Cash and cash equivalents rose to $611.6 million from $364.1 million, and total debt was $535.3 million. The company redeemed $291.6 million of its 2015 Preferred Stock and issued $200.0 million of 5.75% Senior Notes due 2033. Following SFAS No. 150 adoption, preferred dividends of $17.4 million are now reported as interest expense, which raised net interest expense to $27.1 million and the effective tax rate to 37.7% from 32.9%. The company repurchased about 2.8 million Class A shares for $115.9 million during fiscal 2004. Lauder family members controlled approximately 88.4% of the voting power as of August 31, 2004. The filing also discloses ongoing legal matters, including the prestige cosmetics class action settlement, New York State landfill cleanup claims (Blydenburgh and Huntington/East Northport), and a Portuguese tax assessment report. Management believes none of these will have a material adverse effect on consolidated financial condition.
Sep 3, 2004
2003
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2003
The Estee Lauder Companies Inc. reported net sales of $5,117.6 million for the fiscal year ended June 30, 2003, up from $4,743.7 million in fiscal 2002, with growth in all product categories and all geographic regions. Operating income rose to $495.1 million from $341.4 million, but that comparison is affected by a $22.0 million special charge in fiscal 2003 tied to a proposed class action settlement and a $117.4 million restructuring charge in fiscal 2002. Excluding these items, operating income was $517.1 million versus $458.8 million, and net earnings were $333.3 million, or $1.32 per diluted share. Reported net earnings were $319.8 million, or $1.26 per diluted share, compared with $191.9 million, or $.70 per diluted share, in the prior year, which included the restructuring and a $20.6 million cumulative accounting change charge. Cash flow from operations was $548.5 million, and the company repurchased 11.2 million Class A shares for $352.4 million during fiscal 2003. Year-end cash and cash equivalents were $364.1 million, and total debt was $291.4 million. The filing notes that the Lauder family holds approximately 91.3% of voting power. The company also highlights the April 2003 Darphin acquisition, the May 2003 Michael Kors license, and the July 2003 Rodan & Fields acquisition, and it discloses that the $6.50 Cumulative Redeemable Preferred Stock must be redeemed on June 30, 2005, with dividends to be classified as interest expense beginning fiscal 2004 under SFAS No. 150. Management cites a soft U.S. retail environment, with travel retail weakened late in the fiscal year by the Iraq war and SARS concerns. Gross margin improved to 73.9% from 73.2%, and the company reports that three major customers accounted for 24% of fiscal 2003 net sales.
Sep 15, 2003
2002
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2002
The Estee Lauder Companies Inc. reported net sales of $4.74 billion for fiscal 2002 (year ended June 30, 2002), up from $4.67 billion in fiscal 2001, with growth in makeup, skin care and hair care partially offset by a decline in fragrance. Net sales in the Americas rose to $2.88 billion, Europe, the Middle East & Africa to $1.26 billion, and Asia/Pacific to $610.6 million. Profitability weakened: operating income fell to $341.4 million from $495.6 million, reflecting a $117.4 million pre-tax restructuring charge in the fourth quarter. Net earnings were $191.9 million, or $.70 per diluted share, versus $305.2 million and $1.16 a year earlier. Excluding restructuring and other non-recurring items, the filing states net earnings were $289.4 million, and the company cited weak U.S. economic conditions and reduced travel retail sales. Cash generation improved, with operating cash flow of $518.0 million, aided mainly by a reduction in inventory. Cash and cash equivalents rose to $546.9 million, and total debt was $410.5 million. The company issued $250.0 million of 6% Senior Notes due 2012 to refinance a bank term loan and commercial paper, and it repurchased 1.5 million Class A shares for $49.7 million during the year, with a further 4.4 million shares bought for $138.1 million after year-end. The Lauder family controls about 91.2% of voting power. The Board will move from quarterly to annual common dividends, with a first $.20 per share annual dividend expected in January 2003. The filing also discloses a pending Revlon patent infringement suit and a California prestige cosmetics price-fixing class action, and management believes neither will have a material adverse effect.
Sep 17, 2002
2001
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2001
The Estee Lauder Companies Inc. reported net sales of $4.61 billion for fiscal year ended June 30, 2001, up from $4.37 billion in fiscal 2000, with net sales growth of 6% on a reported basis and 9% excluding the impact of foreign currency translation. Operating income declined to $495.6 million from $515.8 million, reflecting $63.0 million of pre-tax restructuring and other non-recurring charges recorded in the fourth quarter. Before these charges, operating income rose 8% to $558.6 million, with operating margins of 12.1%. Net earnings were $305.2 million, or $1.16 per diluted share, versus $314.1 million and $1.20 a year earlier; the filing states that net earnings before restructuring and the accounting change were $347.7 million, up 11%. Cash flow from operations fell to $305.4 million from $442.5 million, driven by higher inventory and reduced accrued liabilities. The company ended the year with $346.7 million in cash and total debt of $416.7 million, and total debt was 20% of total capitalization versus 22% a year earlier. Growth was led by makeup and skin care, with makeup operating income up 17% and skin care up 11%, while fragrance sales declined 3% amid U.S. softness and the Tommy Hilfiger licensed line. Hair care sales rose 59%, largely from the consolidation of Bumble and bumble. The filing also flags ongoing litigation, including a Revlon patent infringement suit and a California class action over prestige cosmetic pricing, both of which management believes will not have a material adverse effect on consolidated results. Management expects the Euro transition and SFAS No. 142 adoption (about $21 million of amortization excluded in fiscal 2002) to affect reporting going forward.
Sep 17, 2001
2000
Estée Lauder Companies Annual Report, Year Ended Jun 30, 2000
The Estee Lauder Companies Inc. reported net sales of $4,366.8 million for the fiscal year ended June 30, 2000, up from $3,961.5 million in fiscal 1999. Operating income rose to $515.8 million from $456.9 million, and net earnings were $314.1 million versus $272.9 million a year earlier. Diluted earnings per share were $1.20, compared with $1.03 in fiscal 1999. Growth was broad-based across skin care ($1,552.4 million), makeup ($1,579.5 million), fragrance ($1,092.3 million) and hair care ($113.9 million), and across all three geographic regions. Cash flow from operations rose to $442.5 million, and capital expenditures were $180.9 million. The company's balance sheet strengthened over the year. Total assets grew to $3,043.3 million and stockholders' equity to $1,160.3 million, while total debt was $425.4 million. Total debt as a percent of total capitalization was 22%, down from 25% a year earlier. The company completed several acquisitions in fiscal 2000, including Stila, Jo Malone, gloss.com and a majority interest in Bumble and bumble, and it repurchased Class A shares under an authorized program. The Lauder family controls approximately 92.1% of the voting power. Key risks disclosed include competition from larger rivals, dependence on retailers (Federated and May Department Stores accounted for 11% and 10% of net sales, respectively), foreign currency exposure, and a California antitrust class action and a Revlon patent infringement suit. Management believes neither lawsuit will have a material adverse effect on the company's financial position.
Sep 18, 2000
1999
Estée Lauder Companies Annual Report, Year Ended Jun 30, 1999
The Estee Lauder Companies Inc. reported fiscal 1999 (year ended June 30, 1999) net sales of $3,961.5 million, up from $3,618.0 million in fiscal 1998, with net sales increasing in all product categories and geographic segments. Operating income rose to $456.9 million from $409.1 million, and operating margin improved to 11.5% from 11.3%. Net earnings were $272.9 million, or $1.03 per diluted share, compared with $236.8 million, or $0.89 per diluted share, in fiscal 1998. Figures are restated for the two-for-one stock split paid June 2, 1999. The company, controlled by the Lauder family with approximately 93.3% of voting power, sells skin care, makeup, fragrance and hair care products under brands including Estee Lauder, Clinique, Aramis, Origins, M.A.C, Aveda and jane, and is the global licensee for Tommy Hilfiger and Donna Karan fragrances and cosmetics. Balance sheet and cash flow data show cash and cash equivalents of $347.5 million at June 30, 1999, total assets of $2,746.7 million, and total debt of $429.1 million in the selected financial data. Net cash provided by operating activities was $352.3 million, and capital expenditures were $117.9 million. Total debt was 25% of total capitalization at June 30, 1999, compared with 29% a year earlier. The Board raised the quarterly dividend to $.05 per share from $.0425, and a share repurchase program of up to eight million Class A shares was authorized in September 1998. The filing states that the Company is involved only in routine legal proceedings that are not expected to have a material adverse effect, and that Year 2000 costs were not expected to be material. Federated Department Stores affiliates accounted for 11% of fiscal 1999 net sales, and May Department Stores for 11%.
Sep 13, 1999
1998
Estée Lauder Companies Annual Report, Year Ended Jun 30, 1998
The Estee Lauder Companies Inc. reported fiscal 1998 (year ended June 30, 1998) net sales of $3,618.0 million, up from $3,381.6 million in fiscal 1997, with the filing stating a 7% increase. Operating income rose to $409.1 million from $359.1 million, and net earnings were $236.8 million versus $197.6 million. Diluted earnings per share were $1.78, compared with $1.47 in fiscal 1997. Growth was driven by new product introductions, the inclusion of the Aveda and Sassaby acquisitions, and strength in fragrance and makeup, while Asia/Pacific sales fell 15% to $452.5 million amid a difficult retail environment in Japan. The filing notes that the strengthening U.S. dollar reduced net sales by approximately $135 million, and that excluding currency translation, net sales increased 11%. The balance sheet expanded substantially due to acquisitions. Total assets rose to $2,512.8 million from $1,873.1 million, and total debt increased to $436.5 million from $31.1 million, reflecting a $405.0 million long-term note issued in February 1998 to refinance borrowings used for acquisitions, including the remaining interest in M.A.C, Aveda and Sassaby. Cash from operating activities was $258.2 million, and acquisitions used $459.9 million in cash during the year. Stockholders' equity increased to $696.4 million. Management states that cash on hand, internally generated cash flow and available credit lines are adequate for planned operations. The company is controlled by the Lauder family, which holds approximately 94.4% of voting power. Management highlights Year 2000 remediation work expected to be completed in summer 1999, with incremental costs described as immaterial, and notes that Year 2000 failures at third parties could have a material adverse effect. Cash dividends of $.085 per quarter ($.34 annually) were maintained.
Sep 11, 1998