SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) :
July 2, 2002
The Estee Lauder Companies Inc.
(Exact name of registrant as specified in its charter)
Delaware 11-2408943
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Commission File Number: 1-14064
767 Fifth Avenue, New York, New York 10153
(Address of principal executive offices) (Zip Code)
212-572-4200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On July 2, 2002, The Estee Lauder Companies Inc. issued a press release
announcing its expectations for its fiscal fourth quarter and full year results.
A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
THE ESTEE LAUDER COMPANIES INC.
Date: July 2, 2002 By: /s/Richard W. Kunes
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Richard W. Kunes
Senior Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
THE ESTEE LAUDER COMPANIES INC.
EXHIBIT INDEX
Exhibit No. Description
99.1 Press release dated July 2, 2002 of The Estee Lauder Companies Inc.
The News
Estee Contact:
Lauder Investor Relations:
Companies Inc. Dennis D'Andrea
(212) 572-4384
767 Fifth Avenue Media Relations:
New York, NY 10153 Sally Susman
(212) 572-4430
FOR IMMEDIATE RELEASE:
ESTEE LAUDER COMPANIES EXPECTS STRONG FOURTH QUARTER SALES
New York, NY, July 2, 2002 - The Estee Lauder Companies Inc. (NYSE: EL) today
said net sales before restructuring charges for the fiscal fourth quarter ended
June 30, 2002 are expected to grow approximately 7% in constant currency versus
the prior-year period. For the fiscal 2002 full year, the Company expects 3%
sales growth on a constant currency basis versus the prior-year. The effect of
exchange rates could have a minimal impact for the fourth quarter and reduce
reported sales growth for the fiscal year by approximately one percentage point.
To gain market share through accelerated sales momentum, in the fiscal 2002
fourth quarter the Company increased its spending levels in advertising and
promotion. The strong top-line sales growth in the fourth quarter indicates the
market is responding positively. Based on the above, the Company expects that
diluted earnings per share for the fourth quarter will be approximately $.18 and
the full fiscal year approximately $1.10. The fourth quarter estimate is before
restructuring charges while the full year is also before the cumulative effect
of a change in accounting principle.
Net sales for the full fiscal year in constant currency are expected to be led
by high single-digit percentage growth in Asia/Pacific. Europe, the Middle East
& Africa is expected to report a mid-single-digit sales increase. The travel
retail business, which is reported in this region, continues to be affected by
lower worldwide travel, while other businesses in the region are performing
well. Excluding the travel retail business, Europe, the Middle East & Africa is
expecting high single-digit sales growth in constant currency. The Americas
region is expected to show a slight increase in sales for the year, while fourth
quarter sales in this region are expected to grow high single-digits in response
to the Company's additional advertising and promotional spending.
On a product category basis, in constant currency, the Company expects for the
fiscal year its strongest sales growth from hair care, off of a smaller base,
followed by a mid-single-digit increase in makeup and low single-digit growth in
skin care. Fragrance sales are expected to post a mid-single-digit sales
decline.
Change in Accounting Principle and Restructuring Charges
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In fiscal 2002, the Company adopted Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets." In compliance with the new
rule, the Company recorded a one-time charge of $20.6 million, or $.09 per
diluted share, to reflect the cumulative effect of the change in accounting
principle.
In connection with the Company's previously announced restructuring, in the
fiscal 2002 fourth quarter, the Company will take a special charge for
restructuring and repositioning certain businesses. The pre-tax charge will be
approximately $117 million, or $77 million after-tax, equal to $.32 per diluted
share.
Forward-looking Statements
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The forward-looking statements in this press release, including those containing
words like "will," "expect," "anticipate," "could," "plan," and "estimate"
involve risks and uncertainties. Factors that could cause actual results to
differ materially from those forward-looking statements include the following:
(i) increased competitive activity from companies in the skin care,
makeup, fragrance and hair care businesses, some of which have
greater resources than the Company does;
(ii) the Company's ability to develop, produce and market new products on
which future operating results may depend;
(iii) consolidations and restructurings 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 and
ownership of competitors by the Company's customers that are
retailers;
(iv) shifts in the preferences of consumers as to where and how they
shop for the types of products and services the Company sells;
(v) 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;
(vi) changes in the laws, regulations and policies, including changes in
accounting standards and trade rules, and legal or regulatory
proceedings, that affect, or will affect, the Company's business;
(vii) 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;
(viii)changes in global or local economic conditions that could affect
consumer purchasing, the financial strength of our customers and the
cost and availability of capital which the Company may need for new
equipment, facilities or acquisitions;
(ix) shipment delays, depletion of inventory and increased production
costs resulting from disruptions of operations at any of the
facilities which, due to consolidations in the Company's
manufacturing operations, now manufacture nearly all of the Company's
supply of a particular type of product (i.e., focus factories);
(x) real estate rates and availability, which may affect the Company's
ability to increase the number of retail locations at which the
Company's products are sold;
(xi) changes in product mix to products which are less profitable;
(xii) the Company's ability to acquire or develop e-commerce capabilities,
and other new information and distribution technologies, on a timely
basis and within the Company's cost estimates;
(xiii)the Company's ability to capitalize on opportunities for improved
efficiency, such as globalization, and to integrate acquired
businesses and realize value therefrom; and
(xiv) consequences attributable to the events that took place in New York
City and Washington, D.C. on September 11, 2001, including further
attacks, retaliation and the threat of further attacks or
retaliation.
The Estee Lauder Companies Inc. is one of the world's leading manufacturers and
marketers of quality skin care, makeup, fragrance and hair care products. The
Company's products are sold in over 120 countries and territories under
well-recognized brand names, including Estee Lauder, Clinique, Aramis,
Prescriptives, Origins, M.A.C, Bobbi Brown, Tommy Hilfiger, La Mer, jane, Donna
Karan, Aveda, Stila, Jo Malone, Bumble and bumble and Kate Spade.
An electronic version of this release can be found at the Company's Website,
www.elcompanies.com.
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