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Will Travel Retail, Online Continue to Drive Estee Lauder?
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The Estee Lauder Companies Inc. (EL - Free Report) has been mainly riding on buyouts, solid online growth and strong travel retail network. These factors, which have been fueling the company’s stellar earnings surprise record, are likely to continue driving its ongoing performance.
Though the company has been battling sluggish retail traffic in the U.S. brick-and-mortar stores, it looks like the aforementioned upsides will help the cosmetics biggie sustain the robust momentum. Markedly, this Zacks Rank #3 (Hold) stock has rallied a whopping 62.3% in a year, easily crushing the industry’s 31.5% upside.
Acquisitions Boost Top Line
The acquisitions of BECCA and Too Faced (during first-quarter fiscal 2017) has strengthened Estee Lauder’s fastest growing prestige portfolio and contributed roughly 2 percentage points to the company’s overall sales growth in fiscal 2018. The company’s previous moves in this regard include the buyout of sophisticated Paris-based brand, By Kilian, and the takeover of key prestige skin care brands, RODIN olio lusso and GLAMGLOW.
Apart from skin care, Estee Lauder has acquired high-end fragrance and lifestyle brand, Le Labo (The Lab), and high-end fragrance brand, Editions de Parfums Frédéric Malle. Such acquisitions help the company expand its portfolio apart from helping it attain the respective loyal customer base.
Online Business a Major Driver
Estee lauder has spread its presence online to more than 35 countries. The company is implementing new technology and digital experiences, including online booking for each store appointment, omni-channel loyalty programs and high touch mobile services. These initiatives and the company’s digital-first mindset have been boosting the company’s online sales, thereby being a major growth driver for its overall top line.
During third-quarter fiscal 2018, online sales remained strong, with exceptionally robust performance in China, thanks to T-mall. Also, the company’s retail dot.com sales jumped double-digits in all regions. Estee Lauder remains focused on widening its global online presence by adding new sites and expanding retailer distributions.
Travel Retail to Drive Sales Further
Estee Lauder has been strongly focused on enhancing its travel retail business. Exceptional growth in this category has largely fueled third-quarter fiscal 2018 sales. Travel retail sales growth in the quarter was mainly backed by Asia along with double-digit increases in eight of its biggest brands in the travel retail network.
Management stated that results were fueled by the company’s continued investments in key local markets, with fragrances category being the main driver. The company remains committed toward undertaking more efforts to enhance conversions through strategic initiatives like customer insights, enhanced merchandising and improved digital marketing. Management expects continued growth in the travel retail channel, especially in China.
Together, these factors helped Estee Lauder retain its spectacular earnings surprise trend in third-quarter fiscal 2018. Notably, Estee Lauder marked its 15th and fifth consecutive quarter of earnings and sales beat, respectively. Also, both top and bottom lines advanced year over year.
Encouragingly, management raised its sales and earnings outlook for fiscal 2018, despite being cautious about a difficult brick-and-mortar retail environment in the UK and North America. Consequently, the Zacks Consensus Estimate for fiscal 2018 has gone up by 8 cents to $4.45 since the earnings release, while the stock has gained 8.2%.
Looking for Promising Consumer Staples Stocks? Check These
Helen of Troy Ltd. (HELE - Free Report) , with a solid earnings surprise history, flaunts a Zacks Rank #2 (Buy).
Chefs' Warehouse (CHEF - Free Report) , with long-term earnings per share growth rate of 22%, carries a Zacks Rank #2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Will Travel Retail, Online Continue to Drive Estee Lauder?
The Estee Lauder Companies Inc. (EL - Free Report) has been mainly riding on buyouts, solid online growth and strong travel retail network. These factors, which have been fueling the company’s stellar earnings surprise record, are likely to continue driving its ongoing performance.
Though the company has been battling sluggish retail traffic in the U.S. brick-and-mortar stores, it looks like the aforementioned upsides will help the cosmetics biggie sustain the robust momentum. Markedly, this Zacks Rank #3 (Hold) stock has rallied a whopping 62.3% in a year, easily crushing the industry’s 31.5% upside.
Acquisitions Boost Top Line
The acquisitions of BECCA and Too Faced (during first-quarter fiscal 2017) has strengthened Estee Lauder’s fastest growing prestige portfolio and contributed roughly 2 percentage points to the company’s overall sales growth in fiscal 2018. The company’s previous moves in this regard include the buyout of sophisticated Paris-based brand, By Kilian, and the takeover of key prestige skin care brands, RODIN olio lusso and GLAMGLOW.
Apart from skin care, Estee Lauder has acquired high-end fragrance and lifestyle brand, Le Labo (The Lab), and high-end fragrance brand, Editions de Parfums Frédéric Malle. Such acquisitions help the company expand its portfolio apart from helping it attain the respective loyal customer base.
Online Business a Major Driver
Estee lauder has spread its presence online to more than 35 countries. The company is implementing new technology and digital experiences, including online booking for each store appointment, omni-channel loyalty programs and high touch mobile services. These initiatives and the company’s digital-first mindset have been boosting the company’s online sales, thereby being a major growth driver for its overall top line.
During third-quarter fiscal 2018, online sales remained strong, with exceptionally robust performance in China, thanks to T-mall. Also, the company’s retail dot.com sales jumped double-digits in all regions. Estee Lauder remains focused on widening its global online presence by adding new sites and expanding retailer distributions.
Travel Retail to Drive Sales Further
Estee Lauder has been strongly focused on enhancing its travel retail business. Exceptional growth in this category has largely fueled third-quarter fiscal 2018 sales. Travel retail sales growth in the quarter was mainly backed by Asia along with double-digit increases in eight of its biggest brands in the travel retail network.
Management stated that results were fueled by the company’s continued investments in key local markets, with fragrances category being the main driver. The company remains committed toward undertaking more efforts to enhance conversions through strategic initiatives like customer insights, enhanced merchandising and improved digital marketing. Management expects continued growth in the travel retail channel, especially in China.
Together, these factors helped Estee Lauder retain its spectacular earnings surprise trend in third-quarter fiscal 2018. Notably, Estee Lauder marked its 15th and fifth consecutive quarter of earnings and sales beat, respectively. Also, both top and bottom lines advanced year over year.
Encouragingly, management raised its sales and earnings outlook for fiscal 2018, despite being cautious about a difficult brick-and-mortar retail environment in the UK and North America. Consequently, the Zacks Consensus Estimate for fiscal 2018 has gone up by 8 cents to $4.45 since the earnings release, while the stock has gained 8.2%.
Looking for Promising Consumer Staples Stocks? Check These
Inter Parfums, Inc. (IPAR - Free Report) , a Zacks Rank #1 (Strong Buy), has long-term earnings per share growth rate of 12.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Helen of Troy Ltd. (HELE - Free Report) , with a solid earnings surprise history, flaunts a Zacks Rank #2 (Buy).
Chefs' Warehouse (CHEF - Free Report) , with long-term earnings per share growth rate of 22%, carries a Zacks Rank #2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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