Estee Lauder jumps on ‘outstanding’ earnings beat, positive outlook (EL)

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Estee Lauder reported fiscal fourth-quarter 2019 earnings Monday that beat Wall Street. expectations.
Shares rose more than 7% in early trading on the news.
The company also raised its outlook for fiscal 2020 and now expects sales to grow between 7% and 8% next year.
Watch Estee Lauder trade live on Markets Insider.

Estee Lauder is having a great year, and it expects the next one to be just as good.

Shares of the company jumped more than 7% in early trading Monday after it posted a solid earnings beat for fiscal fourth quarter 2019. The company also raised its guidance for 2020.

Here’s what the company reported versus what analysts surveyed by Bloomberg expected:

Net sales: $3.59 billion versus $3.53 billion expected
Adjusted earnings per share: $0.64 per share, versus $0.53 per share expected

Growth in the fourth quarter was largely driven by China and emerging markets, as well as retail and online channels, the company said. These were the same forces that propelled the prestige beauty maker throughout the year.

"Fiscal 2019 was an outstanding year for our company," said Fabrizio Freda, the CEO, in a press release. "We achieved strong net sales gains across our business, fueled by investments in our strategic priorities, including improved data analytics that helped power our innovation and digital marketing."

He continued: "Our winning strategy led to continued share gains in global prestige beauty."

The company now expects global prestige beauty to grow 6% to 7% during fiscal 2020, "assuming no additional geopolitical risk materializes."

However, the company said that it is aware and mindful of the risks that could affect consumer spending in its category — it names softness of brick and mortar retail, Brexit, escalating US and China trade tensions, and Hong Kong protests as risks it is watching for in 2020.

The company thinks its net sales will grow between 7% and 8% on the year in 2020, and aims to stabilize in North America despite a "currently tough retail environment."

The company posted sales growth in skin care, makeup, fragrance, and hair care. It posted sales growth across all regions— even North American sales were up 1%. The company has struggled to perform in North America, where it faces a challenge in brick and mortar stores.

Estee Lauder is up 43% year to date.

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