Estee Lauder (EL) Q1 Earnings Likely To Grow Y/Y: Here's Why
Zacks Investment Research | Oct 25, 2017 10:58PM ET
Estée Lauder Companies Inc (NYSE:EL) is slated to report first-quarter fiscal 2018 results on Nov 1. The company’s results are expected to benefit from rising consumer spending on beauty and personal grooming products, owing to improvements in consumer confidence. Moreover, the rise of e-commerce has been boosting the beauty space, which bodes well for the company. Considering these factors, the company’s earnings and sales are expected to depict a year-on-year growth this earnings season.
Strong Demand for Beauty Products to Drive Growth
A strong portfolio of globally recognized beauty brands and adequate presence in key markets has been aiding significant growth for Estée Lauder. Moreover, rising demand from consumers for beauty products, particularly in the luxury arena and in makeup, has resulted in robust growth. Analysts polled by Zacks predict sales growth of 14.4% in the company's makeup division to reach $1335 million in the upcoming results.
Further, the Zacks Consensus Estimate for sales in the fragrance, skin care and hair care categories are expected at $470 million, $1,171 million and $138 million respectively. These sales estimates indicate a rise of 6.3% for both fragrance and skin care categories from the prior-year figure, while the hair care segment is expected to increase 1.5%. While the hair care segment remained weak in fourth-quarter fiscal 2017, improvements undertaken to strengthen this segment are expected to provide positive yields in the to-be-reported quarter and in fiscal 2018.
From a geographical perspective, Estée Lauder has strengthened its position in the Americas through the acquisitions of Too Faced, BECCA and By Kilian. The Zacks Consensus Estimate of sales from the Americas is expected at $1,350 million in the first quarter, depicting a growth of 9.5% from the year-ago period. The consensus mark for Asia/Pacific revenues is pegged at $645 million, reflecting a rise of 9.3%. Further the Zacks Consensus Estimate for revenues from the Europe, the Middle East & Africa region is pegged at $1,153 million, depicting growth of 10.4%.
Considering strong-growth expectations across Estée Lauder’s product categories spread across a number of key market locations, analysts polled by Zacks expect net sales of $3,164 million during the first quarter, up 10.8% from the prior-year period. Also, management predicts sales growth of 9-10% in the first quarter. Notably, the company has surpassed top-line estimates in the trailing two quarters, while it has been registering year-over-year growth in the same for almost eight quarters now.
Estee Lauder Companies, Inc. (The) Price, Consensus and EPS Surprise
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