Estée Laurder Profits Plunge but Beat Views

 

Cosmetics company Estee Lauder on Monday said its fiscal third-quarter profit slid 70 percent due to restructuring charges and declining sales, but results managed to beat analysts’ estimates.

The company, which is in the midst of a restructuring under a new chief executive, earned $27.2 million, or 14 cents per share, compared with $90.1 million, or 46 cents per share, in the same quarter a year ago.

Excluding restructuring charges and other items, profit was 16 cents per share in the quarter ended March 31.

Sales slipped 10 percent to $1.7 billion partly on the stronger dollar.

Analysts forecast profit of 5 cents per share on sales of $1.65 billion. Analyst estimates typically exclude special items.

Results were hurt by a sharp drop in sales as a weak economy hurt consumer spending. Furthermore, lower passenger traffic through Estee Lauder’s airport stores cut away at its travel retail business, especially in Europe, the Middle East and Africa.

The company’s fragrance line was especially hard hit across all regions as consumers stayed away from designer fragrances and certain Estee Lauder and Clinique fragrances.

New York-based Estee Lauder Cos. is in the midst of a restructuring plan which will cut 2,000 jobs, or 6 percent of its work force, freeze merit raises and maintain its hiring freeze under its four-year restructuring. Chief Executive Fabrizio Freda became president and CEO during the fiscal third quarter and will help spearhead the four-year restructuring plan.

Estee Lauder’s brands include MAC, Aveda and its namesake. Shares of the company advanced 97 cents, or 3.1 percent, to $32.10 in premarket activity.

5/4/2009 8:28 AM NEW YORK (AP)