Estée Lauder (EL) 4Q16 RESULTS: EPS BEATS CONSENSUS, SOLID BUT MIXED GUIDANCE

Executive Summary

• Estée Lauder reported adjusted 4Q16 EPS of $0.43, ahead of the $0.40 consensus estimate and up 8.3% year over year. Revenues were $2.65 billion, up 4.8% year over year and slightly below the consensus estimate.
• Makeup was the strongest product category in the quarter; revenues were up 12% year over year, and skincare sales grew just 3%, both in constant currency. Europe, the Middle East and Africa were the strongest geographic regions, with sales up 12%, Asia Pacific was up 6% and the Americas were up 4%, also in constant currency.
• For fiscal year 2017, guidance is for sales up 6%–7% in constant currency, slightly above the consensus estimate, and EPS guidance is $3.38–$3.44, below the $3.52 consensus estimate.