Net Sales Increased 5% and Diluted EPS
Increased to $.91
Organic Net Sales1 Grew 6% and Adjusted
Diluted EPS Increased to $.97
Asia Travel Retail Returned to Net Sales
Growth
Affirms Inflection Point of Net Sales Growth
and Profitability in the Second Half
The Estée Lauder Companies Inc. (NYSE: EL) today reported net
sales of $3.94 billion for its third quarter ended March 31, 2024,
an increase of 5% from $3.75 billion in the prior-year period.
Organic net sales increased 6% primarily due to double-digit growth
in Europe, the Middle East & Africa (“EMEA”), driven by
stronger sales in Asia travel retail. The growth in Asia travel
retail was driven by higher shipments reflecting significant
sequential improvement in retail sales trends and continued
progress in achieving targeted retailer inventory levels as well as
lower shipments in the prior-year period due, in part, to
transitory headwinds. The growth in organic net sales also
reflected increases in several developed and emerging markets in
Asia/Pacific, The Americas and EMEA, including strong double-digit
growth in the Company’s Priority Emerging Markets2. Net sales
increased in nearly all product categories, led by the return to
high-single-digit growth in Skin Care.
The Company reported net earnings of $330 million, compared with
net earnings of $156 million in the prior-year period. The
Company’s reported effective tax rate was 31.1% in the quarter
compared to the elevated rate in the prior-year period of 44.6%.
The decrease in the effective tax rate was primarily driven by a
lower effective tax rate on the Company's foreign operations due to
the timing of the estimated change in the Company's full year
geographical mix of earnings in the current and prior-year periods,
partially offset by the unfavorable impact associated with
previously issued stock-based compensation. Diluted net earnings
per common share was $.91, compared with $.43 reported in the
prior-year period. Excluding restructuring and other charges and
adjustments as detailed on page 2, adjusted diluted net earnings
per common share increased to $.97. The fiscal 2024 third quarter
impact of business disruptions in Israel and other parts of the
Middle East was $.01 dilutive to reported and adjusted net earnings
per common share.
Fabrizio Freda, President and Chief Executive Officer said, “For
the third quarter of fiscal 2024, we delivered our organic sales
outlook, exceeded expectations for profitability and continued to
improve working capital. La Mer, Estée Lauder, Jo Malone London, Le
Labo, and The Ordinary led organic sales growth, driven by beloved
hero products and highly sought innovation. Asia travel retail
returned to organic sales growth, as developed and emerging markets
across Asia/Pacific, EMEA, and Latin America further
contributed.
___________________________________________ 1Organic net sales
represents net sales excluding returns associated with
restructuring and other activities; non-comparable impacts of
acquisitions, divestitures and brand closures; as well as the
impact from foreign currency translation. The Company believes that
the Non-GAAP measure of organic net sales growth provides
year-over-year sales comparisons on a consistent basis. See page 2
for reconciliations to GAAP. 2The Company’s Priority Emerging
Markets by geographic region: The Americas: Brazil and Mexico;
EMEA: India, the Middle East, Turkey and South Africa; and
Asia/Pacific: Thailand, Malaysia, Vietnam, Indonesia and the
Philippines.
During the second half of fiscal 2024, we have strategically
expanded our consumer reach in exciting ways, from Clinique’s debut
on the U.S. Amazon Premium Beauty store, which has greatly exceeded
our retail sales expectations thus far, to striking new flagship
stores in Asia/Pacific for Jo Malone London and Le Labo. We have
also made progress across all work streams for the Profit Recovery
Plan, setting the stage to deliver its $1.1 to $1.4 billion of
incremental operating profit in fiscal years 2025 and 2026 while
also generating funds to reinvest into our brands and
consumer-facing initiatives to accelerate sustainable sales and
profit growth as a faster and leaner organization.”
Freda emphasized, “With our third quarter results and fourth
quarter outlook, we are confident that the second half of fiscal
2024 will prove to be an inflection point for our Company
performance. We expect accelerating momentum in organic sales
growth in the fourth quarter, and for operating margin in the
second half of fiscal 2024 to not only be stronger than the first
half but also to expand from the year-ago period.”
Fiscal 2024 Third Quarter
Results Reported net sales increased 5%, including
royalty revenue from the fiscal 2023 fourth quarter acquisition of
the TOM FORD brand and the impact from foreign currency
translation.
Reconciliation between GAAP
and Non-GAAP Net Sales Growth (Unaudited)
Three Months Ended March 31,
2024(1)
As Reported - GAAP
5.0
%
Impact of royalty revenue from the
acquisition of the TOM FORD brand
(0.4
)
Impact of foreign currency translation
1.4
Returns associated with restructuring and
other activities
(0.1
)
Organic, Non-GAAP
5.9
%
(1)Percentages are calculated on an
individual basis
Adjusted diluted net earnings per common share excludes
restructuring and other charges and adjustments as detailed in the
following table.
Reconciliation between GAAP
and Non-GAAP - Diluted Net Earnings Per Common Share (“EPS”)
(Unaudited)
Three Months Ended
March 31
2024
2023
Growth
As Reported EPS - GAAP
$
.91
$
.43
100
+%
Non-GAAP
Restructuring and other charges
.04
.04
Change in fair value of
acquisition-related stock options (less the portion attributable
to
redeemable noncontrolling interest)
.02
—
Adjusted EPS - Non-GAAP
$
.97
$
.47
100
+%
Impact of foreign currency translation on
earnings per share
.05
Adjusted Constant Currency EPS -
Non-GAAP
$
1.02
$
.47
100
+%
Total reported operating income was $531 million, a 79% increase
from $297 million in the prior-year period. In constant currency,
adjusted operating income increased 83%, primarily reflecting
higher net sales and lower cost of sales, excluding the following
items:
- Fiscal 2024 third quarter: $23 million restructuring and other
charges and adjustments.
- Fiscal 2023 third quarter: $19 million of restructuring and
other charges and adjustments.
- The unfavorable impact of foreign currency translation of $25
million.
During the fiscal 2024 second quarter, the Company identified
and corrected prior-period misclassifications of net sales and
operating income between certain of its product categories. As a
result, product category net sales and operating income have been
adjusted from the amounts previously reported for the three and
nine months ended March 31, 2023 for comparability purposes.
Presentation of product category net sales and operating income for
the fiscal years ended June 30, 2023 and 2022, will also be
adjusted to reflect the misclassifications arising in those periods
for comparability purposes within the prospective filing. The
misclassifications had no impact on the current-period or
prior-period consolidated statements of earnings, consolidated
statements of comprehensive income, consolidated balance sheets, or
the consolidated statements of cash flows, and the Company
determined that the impact on its current-period and previously
issued financial statements for the respective periods was not
material. See the Q2 Quarterly Earnings section of the Company’s
website for supplemental information relating to the impacts of
these misclassifications.
Results by Product Category
(Unaudited)
Three Months Ended March
31
Net Sales
Percentage Change(1)
Operating Income
(Loss)
Percentage Change
($ in millions)
2024
2023
Reported Basis
Impact of Royalty Revenue from
the Acquisition of the TOM FORD Brand
Impact of Foreign Currency
Translation
Organic Net Sales
(Non-GAAP)
2024
2023
Reported Basis
Skin Care
$
2,060
$
1,915
8
%
—
%
2
%
9
%
$
468
$
269
74
%
Makeup
1,136
1,104
3
—
1
4
66
(5
)
100
+
Fragrance
575
577
—
—
1
1
29
66
(56
)
Hair Care
143
148
(3
)
—
(1
)
(4
)
(25
)
(24
)
(4
)
Other
26
11
100
+
(100
+)
9
—
11
9
22
Subtotal
$
3,940
$
3,755
5
%
—
%
1
%
6
%
$
549
$
315
74
%
Returns/charges
associated with
restructuring and
other activities
—
(4
)
(18
)
(18
)
Total
$
3,940
$
3,751
5
%
—
%
1
%
6
%
$
531
$
297
79
%
Non-GAAP Adjustments to As Reported
Operating Income:
Returns/charges associated with
restructuring and other activities
18
18
Skin Care - Changes in fair value of
acquisition-related stock options
5
1
Adjusted Operating Income -
Non-GAAP
$
554
$
316
75
%
(1)Percentages are calculated on an
individual basis. Refer to the Reconciliation between GAAP and
Non-GAAP Net Sales Growth on page 2 for additional detail on the
organic impacts to reported net sales.
The product category net sales commentary below reflects organic
performance, which excludes the negative (positive) impacts
reflected in the preceding table.
Skin Care
- Skin Care net sales increased 9%, due to growth in every
geographic region. Double-digit growth in EMEA was driven by
stronger sales in Asia travel retail. The growth in Asia travel
retail was driven by higher shipments reflecting significant
sequential improvement in retail sales trends and continued
progress in achieving targeted retailer inventory levels as well as
lower shipments in the prior-year period due, in part, to
transitory headwinds.
- Net sales from La Mer rose strong double digits globally,
driven by double-digit growth in EMEA and Asia/Pacific, benefiting
from continued strength from hero products, including The Treatment
Lotion, Crème de la Mer and The Concentrate, and new product
innovation, such as The Moisturizing Fresh Cream.
- Estée Lauder net sales grew mid-single digits, primarily due to
the Advanced Night Repair and Revitalizing Supreme product
franchises and benefiting from new product innovation, including
Re-Nutriv Ultimate Diamond Transformative Brilliance Soft Creme
Moisturizer primarily in mainland China.
- Skin Care operating income increased, primarily reflecting the
growth in net sales as well as the decrease in obsolescence charges
compared to the prior-year period primarily due to less inventory
on hand reflecting the Company’s progress to reduce excess.
Makeup
- Makeup net sales increased 4%, primarily benefiting from growth
in the Company’s travel retail business as well as strong
double-digit growth in Latin America and Korea. Partially
offsetting these increases was a benefit in the prior-year period
as a result of changes to M·A·C’s take-back loyalty program.
- Estée Lauder net sales grew strong double digits, reflecting
growth across all geographic regions and continued success from the
Double Wear product franchise.
- Net sales from Clinique rose double digits globally, with
growth across all geographic regions, benefiting from continued
strength across the eye, face and lip subcategories.
- Makeup operating results increased, primarily reflecting net
sales growth and disciplined expense management.
Fragrance
- Fragrance net sales grew 1%. Net sales from the Company’s
luxury brands increased mid-single digits, reflecting growth across
all geographic regions, partially offset by a decline from Estée
Lauder.
- Jo Malone London net sales increased high-single digits, led by
strong double-digit growth in EMEA and The Americas, primarily
driven by hero product franchises, including English Pear and Wood
Sage & Sea Salt and new product innovation, such as Red
Hibiscus.
- Net sales from Le Labo rose strong double digits globally and
in Asia/Pacific, primarily driven by continued success of hero
product franchises, such as Santal 33 and Another 13, and benefited
from targeted expanded consumer reach globally.
- Estée Lauder net sales declined, primarily due to softer retail
sales during holiday and key shopping moments that led to lower
shipments for replenishment orders compared to the prior-year
period.
- Fragrance operating income declined, primarily driven by
strategic investments, including for targeted expanded consumer
reach globally as well as advertising and promotional activities,
to support growth of the Company’s luxury brands.
Hair Care
- Hair Care net sales decreased 4%, primarily driven by Aveda
reflecting softness in the Company’s North America salon
channel.
- Hair Care operating results decreased, driven by the decline in
net sales, partially offset by disciplined expense management.
Results by Geographic
Region (Unaudited)
Three Months Ended March
31
Net Sales
Percentage Change(1)
Operating Income
(Loss)
Percentage
Change
($ in millions)
2024
2023
Reported Basis
Impact of Royalty
Revenue
from the Acquisition of the
TOM FORD Brand
Impact of Foreign Currency
Translation
Organic Net Sales
(Non-GAAP)
2024
2023
Reported Basis
The Americas
$
1,117
$
1,089
3
%
(1
)%
—
%
1
%
$
(6
)
$
(93
)
94
%
Europe, the
Middle East &
Africa
1,647
1,474
12
—
—
12
302
176
72
Asia/Pacific
1,176
1,192
(1
)
—
5
3
253
232
9
Subtotal
$
3,940
$
3,755
5
%
—
%
1
%
6
%
$
549
$
315
74
%
Returns/charges
associated with
restructuring and
other activities
—
(4
)
(18
)
(18
)
Total
$
3,940
$
3,751
5
%
—
%
1
%
6
%
$
531
$
297
79
%
Non-GAAP Adjustments to As Reported
Operating Income:
Returns/charges associated with
restructuring and other activities
18
18
The Americas - Changes in fair value of
acquisition-related stock options
5
1
Adjusted Operating Income -
Non-GAAP
$
554
$
316
75
%
(1)Percentages are calculated on an
individual basis. Refer to the Reconciliation between GAAP and
Non-GAAP Net Sales Growth on page 2 for additional detail on the
organic impacts to reported net sales.
The geographic region net sales commentary below reflects
organic performance, which excludes the negative/(positive) impacts
reflected in the preceding table.
The Americas
- Net sales increased 1%. In Latin America, net sales grew double
digits and were flat in North America.
- In Latin America, net sales continued to be fueled by strong
double-digit growth in Mexico and Brazil, particularly in
Makeup.
- Net sales performance in North America reflected growth in
Fragrance, led by the Company’s luxury brands, and in Skin Care,
led by Estée Lauder and The Ordinary, offset by declines in Makeup,
attributed to a benefit in the prior-year period as a result of
changes to M·A·C’s take-back loyalty program, and in Hair Care, due
to Aveda softness as previously mentioned. The performance in North
America also reflected double-digit growth in specialty-multi,
partially offset by declines in other channels of distribution,
primarily department stores. Online net sales in the fiscal 2024
third quarter benefited from Clinique’s launch on the U.S. Amazon
Premium Beauty store.
- Operating results in The Americas increased, primarily
reflecting $86 million of higher intercompany royalty income due to
the increase in income from the Company’s travel retail business
and higher net sales, partially offset by strategic investments in
advertising and promotional activities to accelerate growth. The
increase also reflects an unfavorable year-over-year comparison in
adjustments to stock-based compensation expense related to the
Company’s performance share awards.
Europe, the Middle East &
Africa
- Net sales increased 12%, primarily due to the Company’s travel
retail business, reflecting double-digit growth in Skin Care and
Makeup.
- Travel retail net sales increased strong double digits, led by
double-digit growth in Skin Care and Makeup, driven by stronger
sales in Asia travel retail. The growth in Asia travel retail was
driven by higher shipments reflecting significant sequential
improvement in retail sales trends and continued progress in
achieving targeted retailer inventory levels as well as lower
shipments in the prior-year period due, in part, to transitory
headwinds.
- Net sales in the Company’s Priority Emerging Markets in the
region increased strong double digits, while net sales growth was
flat in the developed markets, reflecting increases in Nordic,
Italy and Germany, offset by declines in other markets, led by the
United Kingdom.
- Operating income increased, driven by higher net sales and
disciplined expense management, partially offset by $86 million of
higher intercompany royalty expense due to the increase in income
from the Company’s travel retail business.
Asia/Pacific
- Net sales increased 3%, led by Hong Kong SAR, mainland China
and Japan, reflecting growth in Skin Care and Fragrance.
- In Hong Kong SAR, net sales rose strong double digits, led by
Skin Care, driven by the increase in traveling consumers compared
to the prior-year period. This increase led to growth in the
Company’s freestanding stores that more than doubled.
- Mainland China net sales grew low single digits, due to strong
double-digit growth in January 2024 compared to the prior-year
period, which was challenged by a rise in COVID-19 cases. This
growth was partially offset by the ongoing softness in overall
prestige beauty in mainland China reflecting subdued consumer
confidence and softness during holiday and key shopping
moments.
- Net sales in Japan increased double digits, led by double-digit
growth in Fragrance, driven by domestic and traveling consumers,
which fueled growth in nearly all channels of distribution, led by
freestanding stores.
- Operating income increased, primarily driven by disciplined
expense management, partially offset by strategic investments to
support distribution expansion of the Company’s freestanding
stores.
Nine-Months Results
- For the nine months ended March 31, 2024, the Company reported
net sales of $11.74 billion, a 5% decrease compared with $12.30
billion in the prior-year period. Organic net sales decreased 5%,
primarily driven by Asia travel retail and mainland China.
- The Company’s reported effective tax rate was 33.9% for the
nine months ended March 31, 2024, compared to 27.9% in the
prior-year period. The increase in rate reflects a higher effective
tax rate on the Company’s foreign operations, due to the change in
the Company’s geographical mix of earnings for fiscal 2024, as well
as the unfavorable impact from previously issued stock-based
compensation.
- Net earnings were $674 million, and diluted net earnings per
common share was $1.87. In the prior-year nine months, the Company
reported net earnings of $1,039 million and diluted net earnings
per common share of $2.88.
- During the nine months ended March 31, 2024, the Company
recorded restructuring and other charges and change in fair value
of acquisition-related stock options, that, combined, resulted in
an unfavorable impact of $36 million ($29 million less the portion
attributable to redeemable noncontrolling interest and net of tax),
equal to $.08 per diluted share, as detailed on page 15. The
cybersecurity incident disclosed in July 2023 was dilutive to
fiscal 2024 year-to-date net earnings per common share by $.08. The
prior-year period results include restructuring and other charges,
other intangible asset impairments, and change in fair value of
acquisition-related stock options, that, combined, resulted in an
unfavorable impact of $238 million ($182 million less the portion
attributable to redeemable noncontrolling interest and net of tax),
equal to $.50 per diluted share.
- Excluding restructuring and other charges and adjustments
referred to in the previous bullet, adjusted diluted net earnings
per common share for the nine months ended March 31, 2024 was
$1.95, and declined 40% in constant currency. For the nine months
ended March 31, 2024, the unfavorable impact of foreign currency
translation on adjusted diluted net earnings per common share was
$.08.
Cash Flows
- For the nine months ended March 31, 2024, net cash flows
provided by operating activities were $1.47 billion, compared with
$1.02 billion in the prior-year period. This increase reflects
lower working capital, primarily due to the improvement in
inventory, partially offset by lower earnings before taxes.
- Capital Expenditures increased to $702 million from $652
million in the prior-year period primarily due to timing of
payments relating to the manufacturing facility in Japan as it
nears completion.
- The Company ended the quarter with $3.70 billion in cash and
cash equivalents and paid dividends of $0.71 billion.
- In February 2024, the Company completed a public offering of
$650 million aggregate principal amount of its 5.000% Senior Notes.
The Company intends to use the net proceeds from this offering for
general corporate purposes, which may include funding a portion of
the purchase price for the remaining interest in DECIEM.
Outlook for Fiscal 2024 Fourth Quarter
and Full Year The Company remains focused on
re-establishing sustainable, profitable long-term growth across
regions, product categories, brands and channels. Given the
Company’s fiscal 2024 third quarter results and fourth quarter
outlook, it remains confident in its renewed net sales and profit
growth trajectory. For the full-year fiscal 2024 outlook, amid
ongoing macroeconomic headwinds, including continued softness in
overall prestige beauty in mainland China, and geopolitical
volatility in some areas around the world, the Company is reducing
its organic net sales outlook range and both increasing and
tightening its adjusted diluted net earnings per common share
range, partially offset by an expected unfavorable impact from
foreign currency translation. With these revisions, the Company is
maintaining its adjusted full-year operating margin outlook.
The Company plans to continue to strategically invest in
consumer-facing activities in areas to support sales growth, share
gains and long-term profitable growth. These investments include
innovation, advertising, growth of its emerging markets and the
completion of its first manufacturing facility in Asia, located in
Japan, to support the development of the regionalization of the
supply chain in the Asia/Pacific region.
Leveraging the progress the Company has made through the fiscal
2024 third quarter, its full year outlook reflects the following
assumptions and expectations:
- Acceleration of organic net sales growth in the fiscal 2024
fourth quarter and high-single-digit growth in the second
half.
- In Asia travel retail, a continuation of net sales growth in
the fiscal 2024 fourth quarter, as well as investments to drive
retail sales, following meaningful progress made through the third
quarter.
- Clinique doubling down in Active Derma with new campaigns in
the United States and the United Kingdom in the second half of
fiscal 2024.
- Gross margin expansion in the second half of fiscal 2024
compared to the prior-year period.
- Stronger operating margin in the second half of fiscal 2024
compared to the first half, with expansion compared to the
prior-year period.
- Full year effective tax rate of approximately 35%, largely due
to the estimated geographical mix of earnings in fiscal 2024.
- Improvements in the Company’s inventory balance and days to
sell for fiscal year 2024.
Fiscal 2025 and 2026 Profit Recovery Plan The Company is
in the initial stages of executing its Profit Recovery Plan to
rebuild stronger, more sustainable profitability, support sales
growth acceleration and increase speed and agility. The plan is
designed to improve gross margin, lower the cost base, and reduce
overhead expenses, while increasing investments in key
consumer-facing activities. Upon completion of this plan, the
Company expects to have improved its gross margin and expense base
to drive greater operating leverage for the future.
The Company continues to expect to drive incremental operating
profit through the initiatives in the Profit Recovery Plan of $1.1
billion to $1.4 billion, including net benefits from the
restructuring program. The plan is anticipated to enable the
realization of nearly all of the expected benefits in fiscal years
2025 and 2026, slightly more than half of which is expected to
benefit fiscal 2025 operating profitability.
The Company remains optimistic about the long-term prospects and
future growth opportunities in global prestige beauty. As part of
this plan, the Company expects to increase its investments in the
strong equity and desirability of its brands to drive sustainable
growth, and believes it is well-positioned to drive better
diversified growth across its portfolio.
The Company continues to monitor the effects of the global macro
environment, including the risk of recession; currency volatility;
inflationary pressures; supply chain challenges; social and
political issues; regulatory matters, including the imposition of
tariffs and sanctions; geopolitical tensions; and global security
issues. The Company is also mindful of inflationary pressures on
its cost base and is monitoring the impact on consumer
preferences.
Fourth Quarter Fiscal 2024
Sales Outlook
- Reported net sales are forecasted to increase between 5% and 9%
versus the prior-year period.
- Currency exchange rates are volatile and difficult to predict.
Using March 29, 2024 spot rates for the fourth quarter of fiscal
2024, the Company expects a 1% headwind due to foreign currency
translation.
- Organic net sales are forecasted to increase between 6% and
10%.
Earnings per Share Outlook
- Reported diluted net earnings per common share are projected to
be between $.11 and $.22. Excluding restructuring and other charges
and adjustments, diluted net earnings per common share are
projected to be between $.18 and $.28.
- The combined impact from the increases in the Company’s net
interest expense and effective tax rate is expected to dilute net
earnings per common share by $.21.
- The Company expects to take charges associated with previously
approved restructuring and other activities. For the Restructuring
Program Component of the Profit Recovery Plan, the charges are
estimated to be between approximately $25 million to $30 million,
equal to $.05 to $.06 per diluted common share.
- The potential risks of further business disruptions in Israel
and other parts of the Middle East are expected to have a dilutive
impact to net earnings per common share of $.03.
- Adjusted diluted net earnings per common share are expected to
increase over 100% and range between $.19 and $.29 on a constant
currency basis.
- Currency exchange rates are volatile and difficult to predict.
Using March 29, 2024 spot rates for fiscal 2024, the foreign
currency translation impact equates to about $.01 of dilution to
earnings per common share.
Full Year Fiscal 2024
Sales Outlook
- Reported net sales are forecasted to decrease between 3% and 2%
versus the prior-year period.
- Currency exchange rates are volatile and difficult to predict.
Using March 29, 2024 spot rates for the full year, the Company
expects a 1% headwind due to foreign currency translation.
- Organic net sales are forecasted to decrease between 2% and
1%.
Earnings per Share Outlook
- Reported diluted net earnings per common share are projected to
be between $1.96 and $2.09. Excluding restructuring and other
charges and adjustments, diluted net earnings per common share are
projected to be between $2.14 and $2.24.
- The combined impact from the increases in the Company’s net
interest expense and effective tax rate is expected to dilute net
earnings per common share by $.48.
- The Company expects to take charges associated with previously
approved restructuring and other activities. For the Restructuring
Program Component of the Profit Recovery Plan, the charges are
estimated to be between approximately $45 million to $55 million,
equal to $.10 to $.12 per diluted common share.
- The potential risks of further business disruptions in Israel
and other parts of the Middle East are expected to have a dilutive
impact to net earnings per common share of $.06.
- Adjusted diluted net earnings per common share are expected to
decrease between 36% and 33% on a constant currency basis.
- Currency exchange rates are volatile and difficult to predict.
Using March 29, 2024 spot rates for fiscal 2024, the foreign
currency translation impact equates to about $.09 of dilution to
earnings per common share.
Reconciliation between GAAP
and Non-GAAP - Net Sales Growth (Unaudited)
Three Months Ending
Twelve Months Ending
June 30, 2024(F)
June 30, 2024(F)
As Reported - GAAP
5% - 9
%
(3%) - (2
%)
Impact of royalty revenue from the
acquisition of the TOM FORD brand
—
—
Impact of foreign currency translation
1
1
Returns associated with restructuring and
other activities
—
—
Organic, Non-GAAP
6% - 10
%
(2%) - (1
%)
(F)Represents forecast
Reconciliation between GAAP
and Non-GAAP - Diluted Net Earnings Per Common Share (“EPS”)
(Unaudited)
Three Months Ending
Twelve Months Ending
June 30
June 30
2024(F)
2023
Growth
2024(F)
2023
Growth
Forecasted/As Reported EPS -
GAAP
$.11 - $.22
$
(.09
)
100
+%
$1.96 - $2.09
$
2.79
(30%) - (25
%)
Non-GAAP
Restructuring and other charges
.06 - .07
.11
.12 - .15
.18
Change in fair value of
acquisition-related
stock options (less the portion
attributable
to redeemable noncontrolling interest)
—
.05
.03
.05
Other intangible asset impairments
—
—
—
.44
Forecasted/Adjusted EPS -
Non-GAAP
$.18 - $.28
$
.07
100
+%
$2.14 - $2.24
$
3.46
(38%) - (35
%)
Impact of foreign currency translation
.01
.09
Forecasted/Adjusted Constant
Currency
EPS - Non-GAAP
$.19 - $.29
$
.07
100
+%
$2.23 - $2.33
$
3.46
(36%) - (33
%)
(F)Represents forecast
Conference Call The Estée
Lauder Companies will host a conference call at 9:30 a.m. (ET)
today, May 1, 2024 to discuss its results. The dial-in
number for the call is 877-883-0383 in the U.S. or 412-902-6506
internationally (conference ID number: 1189173). The call will also
be webcast live at
http://www.elcompanies.com/investors/events-and-presentations.
Cautionary Note Regarding
Forward-Looking Statements
Statements in this press release, in particular those in
“Outlook,” as well as remarks by the CEO and other members of
management, may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements may address the Company’s expectations regarding
sales, earnings or other future financial performance and
liquidity, other performance measures, product introductions, entry
into new geographic regions, information technology initiatives,
new methods of sale, the Company’s long-term strategy,
restructuring and other charges and resulting cost savings, and
future operations or operating results. These statements may
contain words like “expect,” “will,” “will likely result,” “would,”
“believe,” “estimate,” “planned,” “plans,” “intends,” “may,”
“should,” “could,” “anticipate,” “estimate,” “project,”
“projected,” “forecast,” and “forecasted” or similar expressions.
Although the Company believes that its expectations are based on
reasonable assumptions within the bounds of its knowledge of its
business and operations, actual results may differ materially from
the Company’s expectations.
Factors that could cause actual results to differ from expectations
include, without limitation:
(1)
increased competitive activity from
companies in the skin care, makeup, fragrance and hair care
businesses;
(2)
the Company’s ability to develop, produce
and market new products on which future operating results may
depend and to successfully address challenges in the Company’s
business;
(3)
consolidations, restructurings,
bankruptcies and reorganizations in the retail industry causing a
decrease in the number of stores that sell the Company’s products,
an increase in the ownership concentration within the retail
industry, ownership of retailers by the Company’s competitors or
ownership of competitors by the Company’s customers that are
retailers and the Company’s inability to collect receivables;
(4)
destocking and tighter working capital
management by retailers;
(5)
the success, or changes in timing or
scope, of new product launches and the success, or changes in
timing or scope, of advertising, sampling and merchandising
programs;
(6)
shifts in the preferences of consumers as
to where and how they shop;
(7)
social, political and economic risks to
the Company’s foreign or domestic manufacturing, distribution and
retail operations, including changes in foreign investment and
trade policies and regulations of the host countries and of the
United States;
(8)
changes in the laws, regulations and
policies (including the interpretations and enforcement thereof)
that affect, or will affect, the Company’s business, including
those relating to its products or distribution networks, changes in
accounting standards, tax laws and regulations, environmental or
climate change laws, regulations or accords, trade rules and
customs regulations, and the outcome and expense of legal or
regulatory proceedings, and any action the Company may take as a
result;
(9)
foreign currency fluctuations affecting
the Company’s results of operations and the value of its foreign
assets, the relative prices at which the Company and its foreign
competitors sell products in the same markets and the Company’s
operating and manufacturing costs outside of the United States;
(10)
changes in global or local conditions,
including those due to volatility in the global credit and equity
markets, natural or man-made disasters, real or perceived
epidemics, supply chain challenges, inflation, or increased energy
costs, that could affect consumer purchasing, the willingness or
ability of consumers to travel and/or purchase the Company’s
products while traveling, the financial strength of the Company’s
customers, suppliers or other contract counterparties, the
Company’s operations, the cost and availability of capital which
the Company may need for new equipment, facilities or acquisitions,
the returns that the Company is able to generate on its pension
assets and the resulting impact on funding obligations, the cost
and availability of raw materials and the assumptions underlying
the Company’s critical accounting estimates;
(11)
impacts attributable to the COVID-19
pandemic, including disruptions to the Company’s global
business;
(12)
shipment delays, commodity pricing,
depletion of inventory and increased production costs resulting
from disruptions of operations at any of the facilities that
manufacture the Company’s products or at the Company’s distribution
or inventory centers, including disruptions that may be caused by
the implementation of information technology initiatives, or by
restructurings;
(13)
real estate rates and availability, which
may affect the Company’s ability to increase or maintain the number
of retail locations at which the Company sells its products and the
costs associated with the Company’s other facilities;
(14)
changes in product mix to products which
are less profitable;
(15)
the Company’s ability to acquire, develop
or implement new information technology, including operational
technology and websites, on a timely basis and within the Company’s
cost estimates; to maintain continuous operations of its new and
existing information technology; and to secure the data and other
information that may be stored in such technologies or other
systems or media;
(16)
the Company’s ability to capitalize on
opportunities for improved efficiency, such as publicly-announced
strategies and restructuring and cost-savings initiatives, and to
integrate acquired businesses and realize value therefrom;
(17)
consequences attributable to local or
international conflicts around the world, as well as from any
terrorist action, retaliation and the threat of further action or
retaliation;
(18)
the timing and impact of acquisitions,
investments and divestitures; and
(19)
additional factors as described in the
Company’s filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended
June 30, 2023.
The Company assumes no responsibility to update
forward-looking statements made herein or otherwise.
The Estée Lauder Companies Inc. is one of the world’s leading
manufacturers, marketers and sellers of quality skin care, makeup,
fragrance and hair care products, and is a steward of luxury and
prestige brands globally. The Company’s products are sold in
approximately 150 countries and territories under brand names
including: Estée Lauder, Aramis, Clinique, Lab Series, Origins,
M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London,
Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty,
Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN
PARIS, Too Faced, Dr.Jart+, and the DECIEM family of brands,
including The Ordinary and NIOD.
ELC-F ELC-E
CONSOLIDATED STATEMENT OF
EARNINGS (Unaudited)
Three Months Ended
March 31
Percentage
Change
Nine Months Ended March
31
Percentage Change
($ in millions, except per share data)
2024
2023
2024
2023
Net sales(A)
$
3,940
$
3,751
5
%
$
11,737
$
12,301
(5
)%
Cost of sales(A)
1,107
1,159
(4
)
3,331
3,401
(2
)
Gross profit
2,833
2,592
9
8,406
8,900
(6
)
Gross margin
71.9
%
69.1
%
71.6
%
72.4
%
Operating expenses
Selling, general and administrative(B)
2,284
2,281
—
7,177
7,155
—
Restructuring and other charges(A)
18
14
29
26
24
8
Impairment of other intangible
assets(C)
—
—
—
—
207
(100
)
Total operating expenses
2,302
2,295
—
7,203
7,386
(2
)
Operating expense margin
58.4
%
61.2
%
61.4
%
60.0
%
Operating income
531
297
79
1,203
1,514
(21
)
Operating income margin
13.5
%
7.9
%
10.2
%
12.3
%
Interest expense
94
58
62
287
156
84
Interest income and investment income,
net
45
37
22
126
78
62
Other components of net periodic benefit
cost
(4
)
(4
)
—
(9
)
(9
)
—
Earnings before income taxes
486
280
74
1,051
1,445
(27
)
Provision for income taxes
151
125
21
356
403
(12
)
Net earnings
335
155
100
+
695
1,042
(33
)
Net loss (earnings) attributable to
redeemable noncontrolling interest
(5
)
1
(100
+)
(21
)
(3
)
(100
+)
Net earnings attributable to The Estée
Lauder
Companies Inc.
$
330
$
156
100
+%
$
674
$
1,039
(35
)%
Net earnings attributable to The Estée
Lauder
Companies Inc. per common share
Basic
$
.92
$
.44
100
+%
$
1.88
$
2.90
(35
)%
Diluted
$
.91
$
.43
100
+%
$
1.87
$
2.88
(35
)%
Weighted-average common shares
outstanding
Basic
359.1
357.9
358.8
357.8
Diluted
360.8
361.2
360.4
360.9
(A)As a component of the Profit Recovery
Plan communicated on November 1, 2023, on February 5, 2024, we
announced a two-year restructuring program. The restructuring
program’s main focus includes the reorganization and rightsizing of
certain areas of our business as well as simplification and
acceleration of processes. We plan to substantially complete
specific initiatives under the restructuring program through fiscal
2026. We expect that the restructuring program will result in
restructuring and other charges totaling between $500 million and
$700 million, before taxes, consisting of employee-related costs,
contract terminations, asset write-offs and other costs associated
with implementing these initiatives.
The Company approved specific initiatives
under the Post-COVID Business Acceleration Program (the “PCBA
Program”) through fiscal 2022 and has substantially completed those
initiatives through fiscal 2023. Additional information about the
PCBA Program is included in the notes to consolidated financial
statements in the Company’s Annual Report on Form 10-K for the
fiscal year ended June 30, 2023.
(B)For the three and nine months ended
March 31, 2024, the Company recorded $5 million ($5 million, less
the portion attributable to redeemable noncontrolling interest and
net of tax) and $8 million ($7 million, less the portion
attributable to redeemable noncontrolling interest and net of tax),
respectively, of expense related to the change in fair value of
acquisition-related stock options related to DECIEM, and recorded
$1 million ($1 million, less the portion attributable to redeemable
noncontrolling interest and net of tax), and $(2) million ($(2)
million, less the portion attributable to redeemable noncontrolling
interest and net of tax) of expense (income) for the three and nine
months ended March 31, 2023, respectively.
(C)During the fiscal 2023 second quarter,
given the lower-than-expected results in the overall business, the
Company revised the internal forecasts relating to its Smashbox
reporting unit. The Company concluded that the changes in
circumstances in the reporting unit triggered the need for an
interim impairment review of its trademark intangible asset. The
remaining carrying value of the trademark intangible asset was not
recoverable and the Company recorded an impairment charge of $21
million reducing the carrying value to zero.
During the fiscal 2023 second quarter, the
Dr.Jart+ reporting unit experienced lower-than-expected growth
within key geographic regions and channels that continue to be
impacted by the spread of COVID-19 variants, resurgence in cases,
and the potential future impacts relating to the uncertainty of the
duration and severity of COVID-19 impacting the financial
performance of the reporting unit. In addition, due to
macro-economic factors, Dr.Jart+ has experienced
lower-than-expected growth within key geographic regions. The Too
Faced reporting unit experienced lower-than-expected results in key
geographic regions and channels coupled with delays in future
international expansion to areas that continue to be impacted by
COVID-19. As a result, the Company revised the internal forecasts
relating to its Dr.Jart+ and Too Faced reporting units.
Additionally, there were increases in the weighted average cost of
capital for both reporting units as compared to the prior year
annual goodwill and other indefinite-lived intangible asset
impairment testing as of April 1, 2022.
The Company concluded that the changes in
circumstances in the reporting units, along with increases in the
weighted average cost of capital, triggered the need for interim
impairment reviews of their trademarks and goodwill. These changes
in circumstances were also an indicator that the carrying amounts
of Dr.Jart+’s and Too Faced’s long-lived assets, including customer
lists, may not be recoverable. Accordingly, the Company performed
interim impairment tests for the trademarks and a recoverability
test for the long-lived assets as of November 30, 2022. The Company
concluded that the carrying value of the trademark intangible
assets exceeded their estimated fair values, which were determined
utilizing the relief-from-royalty method to determine discounted
projected future cash flows and recorded an impairment charge of
$100 million for Dr.Jart+ and $86 million for Too Faced. The
Company concluded that the carrying amounts of the long-lived
assets were recoverable. After adjusting the carrying values of the
trademarks, the Company completed interim quantitative impairment
tests for goodwill. As the estimated fair value of the Dr.Jart+ and
Too Faced reporting units were in excess of their carrying values,
the Company concluded that the carrying amounts of the goodwill
were recoverable and did not record a goodwill impairment charge
related to these reporting units. The fair values of these
reporting units were based upon an equal weighting of the income
and market approaches, utilizing estimated cash flows and a
terminal value, discounted at a rate of return that reflects the
relative risk of the cash flows, as well as valuation multiples
derived from comparable publicly traded companies that are applied
to operating performance of the reporting units. The significant
assumptions used in these approaches include revenue growth rates
and profit margins, terminal values, weighted average cost of
capital used to discount future cash flows and royalty rates for
trademarks. The most significant unobservable input used to
estimate the fair values of the Dr.Jart+ and Too Faced trademark
intangible assets was the weighted average cost of capital, which
was 11% and 13%, respectively.
For the nine months ended March 31, 2023,
other intangible asset impairment charges were $207 million ($159
million, net of tax), with an impact of $.44 per common share.
Returns and Charges Associated
With Restructuring and Other Activities and Other Adjustments
(Unaudited)
Three Months Ended March 31,
2024
Sales Returns
Cost of Sales
Operating Expenses
Total
After Redeemable
Noncontrolling Interest and Tax
Diluted EPS
(In millions, except per share data)
Restructuring Charges
Other Charges/
Adjustments
PCBA Program
$
—
$
—
$
—
$
1
$
1
$
1
$
—
Restructuring Program Component of
Profit
Recovery Plan
—
—
6
11
17
13
.04
Change in fair value of
acquisition-related
stock options
—
—
—
5
5
5
.02
Total
$
—
$
—
$
6
$
17
$
23
$
19
$
.06
Nine Months Ended March 31,
2024
Sales Returns
Cost of Sales
Operating Expenses
Total
After Redeemable
Noncontrolling Interest and Tax
Diluted EPS
(In millions, except per share data)
Restructuring Charges
Other Charges/
Adjustments
PCBA Program
$
1
$
1
$
4
$
5
$
11
$
9
$
.02
Restructuring Program Component of
Profit
Recovery Plan
—
—
6
11
17
13
.04
Change in fair value of
acquisition-related
stock options
—
—
—
8
8
7
.02
Total
$
1
$
1
$
10
$
24
$
36
$
29
$
.08
Three Months Ended March 31,
2023
Sales Returns
Cost of Sales
Operating Expenses
Total
After Redeemable
Noncontrolling Interest and Tax
Diluted EPS
(In millions, except per share data)
Restructuring Charges
Other Charges/
Adjustments
Leading Beauty Forward
$
—
$
—
$
3
$
1
$
4
$
4
$
.01
PCBA Program
4
—
6
4
14
10
.03
Change in fair value of
acquisition-related
stock options
—
—
—
1
1
1
—
Total
$
4
$
—
$
9
$
6
$
19
$
15
$
.04
Nine Months Ended March 31,
2023
Sales Returns
Cost of Sales
Operating Expenses
Total
After Redeemable
Noncontrolling Interest and Tax
Diluted EPS
(In millions, except per share data)
Restructuring Charges
Other Charges/
Adjustments
Leading Beauty Forward
$
—
$
—
$
1
$
4
$
5
$
5
$
.01
PCBA Program
10
(1
)
12
7
28
20
.06
Change in fair value of
acquisition-related
stock options
—
—
—
(2
)
(2
)
(2
)
(.01
)
Other intangible asset impairments
—
—
—
207
207
159
.44
Total
$
10
$
(1
)
$
13
$
216
$
238
$
182
$
.50
Results by Product Category
(Unaudited)
Nine Months Ended March
31
Net Sales
Percentage Change(1)
Operating Income
(Loss)
Percentage Change
($ in millions)
2024
2023
Reported Basis
Impact of Royalty Revenue from
the Acquisition of the TOM FORD Brand
Impact of Foreign Currency
Translation
Organic Net Sales
(Non-GAAP)
2024
2023
Reported Basis
Skin Care
$
5,873
$
6,454
(9
)%
—
%
1
%
(8
)%
$
920
$
1,238
(26
)%
Makeup
3,365
3,424
(2
)
—
—
(2
)
56
(9
)
100
+
Fragrance
1,948
1,907
2
—
—
2
267
343
(22
)
Hair Care
464
488
(5
)
—
(1
)
(6
)
(50
)
(32
)
(56
)
Other
88
38
100
+
(100
+)
—
8
38
7
100
+
Subtotal
$
11,738
$
12,311
(5
)%
—
%
—
%
(5
)%
$
1,231
$
1,547
(20
)%
Returns/charges
associated with
restructuring and
other activities
(1
)
(10
)
(28
)
(33
)
Total
$
11,737
$
12,301
(5
)%
—
%
—
%
(5
)%
$
1,203
$
1,514
(21
)%
Non-GAAP Adjustments to As Reported
Operating Income:
Returns/charges associated with
restructuring and other activities
28
33
Skin Care - Changes in fair value of
acquisition-related stock options
8
(2
)
Skin Care - Other intangible asset
impairments
—
100
Makeup - Other intangible asset
impairments
—
107
Adjusted Operating Income -
Non-GAAP
$
1,239
$
1,752
(29
)%
(1)Percentages are calculated on an
individual basis
Results by Geographic Region
(Unaudited)
Nine Months Ended March
31
Net Sales
Percentage Change(1)
Operating Income
(Loss)
Percentage Change
($ in millions)
2024
2023
Reported Basis
Impact of Royalty Revenue from
the Acquisition of the TOM FORD Brand
Impact of Foreign Currency
Translation
Organic Net Sales
(Non-GAAP)
2024
2023
Reported Basis
The Americas
$
3,567
$
3,447
3
%
(1
)%
—
%
2
%
$
(243
)
$
(53
)
(100
+%)
Europe, the
Middle East &
Africa
4,488
4,972
(10
)
—
(1
)
(11
)
825
919
(10
)
Asia/Pacific
3,683
3,892
(5
)
—
3
(3
)
649
681
(5
)
Subtotal
$
11,738
$
12,311
(5
)%
—
%
—
%
(5
)%
$
1,231
$
1,547
(20
)%
Returns/charges
associated with
restructuring and
other activities
(1
)
(10
)
(28
)
(33
)
Total
$
11,737
$
12,301
(5
)%
—
%
—
%
(5
)%
$
1,203
$
1,514
(21
)%
Non-GAAP Adjustments to As Reported
Operating Income:
Returns/charges associated with
restructuring and other activities
28
33
The Americas - Changes in fair value of
acquisition-related stock options
8
(2
)
The Americas - Other intangible asset
impairments
—
107
Asia/Pacific - Other intangible asset
impairments
—
100
Adjusted Operating Income -
Non-GAAP
$
1,239
$
1,752
(29
)%
(1)Percentages are calculated on an
individual basis
This earnings release includes some non-GAAP financial measures
relating to charges associated with restructuring and other
activities and adjustments, as well as organic net sales. Included
herein are reconciliations between the non-GAAP financial measures
and the most directly comparable GAAP measures for certain
consolidated statements of earnings accounts before and after these
items. The Company uses certain non-GAAP financial measures, among
other financial measures, to evaluate its operating performance,
which represent the manner in which the Company conducts and views
its business. Management believes that excluding certain items that
are not comparable from period-to-period, or do not reflect the
Company’s underlying ongoing business, provides transparency for
such items and helps investors and others compare and analyze
operating performance from period-to-period. In the future, the
Company expects to incur charges or adjustments similar in nature
to those presented herein; however, the impact to the Company’s
results in a given period may be highly variable and difficult to
predict. The Company’s non-GAAP financial measures may not be
comparable to similarly titled measures used by, or determined in a
manner consistent with, other companies. While the Company
considers the non-GAAP measures useful in analyzing its results,
they are not intended to replace, or act as a substitute for, any
presentation included in the consolidated financial statements
prepared in conformity with GAAP.
The Company operates on a global basis, with the majority of its
net sales generated outside the United States. Accordingly,
fluctuations in foreign currency exchange rates can affect the
Company’s results of operations. Therefore, the Company presents
certain net sales, operating results and diluted net earnings per
common share information excluding the effect of foreign currency
rate fluctuations to provide a framework for assessing the
performance of its underlying business outside the United States.
Constant currency information compares results between periods as
if exchange rates had remained constant period-over-period. The
Company calculates constant currency information by translating
current-period results using prior-year period monthly average
foreign currency exchange rates and adjusting for the
period-over-period impact of foreign currency cash flow hedging
activities.
Reconciliation of Certain
Consolidated Statements of Earnings Accounts Before and After
Returns, Charges and Other Adjustments (Unaudited)
Three Months Ended March
31
2024
2023
% Change
($ in millions, except per share data)
As Reported
Returns/ Charges/
Adjustments
Non- GAAP
Impact of Foreign Currency
Translation
Non- GAAP, Constant
Currency
As Reported
Returns/ Charges/
Adjustments
Non- GAAP
Non- GAAP
Non- GAAP, Constant
Currency
Net sales
$
3,940
$
—
$
3,940
$
51
$
3,991
$
3,751
$
4
$
3,755
5%
6%
Gross profit
2,833
—
2,833
40
2,873
2,592
4
2,596
9%
11%
Operating income
531
23
554
25
579
297
19
316
75%
83%
Diluted EPS
$
.91
$
.06
$
.97
$
.05
$
1.02
$
.43
$
.04
$
.47
100+%
100+%
Nine Months Ended March
31
2024
2023
% Change
($ in millions, except per share data)
As Reported
Returns/ Charges/
Adjustments
Non- GAAP
Impact of Foreign Currency
Translation
Non- GAAP, Constant
Currency
As Reported
Returns/ Charges/
Adjustments
Non- GAAP
Non- GAAP
Non- GAAP, Constant
Currency
Net sales
$
11,737
$
1
$
11,738
$
54
$
11,792
$
12,301
$
10
$
12,311
(5)%
(4)%
Gross profit
8,406
2
8,408
43
8,451
8,900
9
8,909
(6)%
(5)%
Operating income
1,203
36
1,239
40
1,279
1,514
238
1,752
(29)%
(27)%
Diluted EPS
$
1.87
$
.08
$
1.95
$
.08
$
2.03
$
2.88
$
.50
$
3.38
(42)%
(40)%
CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited, except where noted)
March 31, 2024
June 30, 2023
(Audited)
March 31, 2023
($ in millions)
ASSETS
Cash and cash equivalents
$
3,701
$
4,029
$
5,531
Accounts receivable, net
1,854
1,452
1,904
Inventory and promotional merchandise
2,307
2,979
3,097
Prepaid expenses and other current
assets
672
679
715
Total current assets
8,534
9,139
11,247
Property, plant and equipment, net
3,133
3,179
3,026
Operating lease right-of-use assets
1,836
1,797
1,843
Other assets
9,197
9,300
6,599
Total assets
$
22,700
$
23,415
$
22,715
LIABILITIES AND EQUITY
Current debt
$
505
$
997
$
2,243
Accounts payable
1,197
1,670
1,520
Operating lease liabilities
363
357
357
Other accrued liabilities
3,351
3,216
3,580
Total current liabilities
5,416
6,240
7,700
Long-term debt
7,265
7,117
5,128
Long-term operating lease liabilities
1,707
1,698
1,734
Other noncurrent liabilities
1,728
1,943
1,457
Total noncurrent liabilities
10,700
10,758
8,319
Redeemable noncontrolling
interest
840
832
819
Total equity
5,744
5,585
5,877
Total liabilities and equity
$
22,700
$
23,415
$
22,715
SELECT CASH FLOW DATA
(Unaudited)
Nine Months Ended March
31
($ in millions)
2024
2023
Net earnings
$
695
$
1,042
Adjustments to reconcile net earnings to
net cash flows from operating activities:
Depreciation and amortization
614
548
Deferred income taxes
(165
)
(70
)
Impairment of other intangible assets
—
207
Other items
265
273
Changes in operating assets and
liabilities:
Increase in accounts receivable, net
(404
)
(254
)
Decrease (increase) in inventory and
promotional merchandise
653
(154
)
Decrease (increase) in other assets,
net
19
(69
)
Decrease in accounts payable and other
liabilities, net
(206
)
(506
)
Net cash flows provided by operating
activities
$
1,471
$
1,017
Other Investing and Financing Sources
(Uses):
Capital expenditures
$
(702
)
$
(652
)
Settlement of net investment hedges
(25
)
138
Payments to acquire treasury stock
(34
)
(258
)
Dividends paid
(710
)
(687
)
Proceeds (repayments) of current debt,
net
(215
)
2,228
Proceeds from issuance of long-term debt,
net
649
—
Repayments of commercial paper (maturities
after three months)
(785
)
—
Repayments and redemptions of long-term
debt, net
(7
)
(261
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501219688/en/
Investors: Rainey Mancini rmancini@estee.com
Media: Jill Marvin jimarvin@estee.com
Estee Lauder Companies (NYSE:EL)
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