Estee Lauder Hits Estimates in Great Quarter

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Estee Lauder Companies (NYS: EL) reported earnings on Feb. 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Estee Lauder Companies met expectations on revenue and met expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share improved significantly.

Margins increased across the board.

Revenue details
Estee Lauder Companies reported revenue of $2.74 billion. The 16 analysts polled by S&P Capital IQ expected net sales of $2.74 billion. Sales were 9.9% higher than the prior-year quarter's $2.49 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.01. The 18 earnings estimates compiled by S&P Capital IQ averaged $1.01 per share on the same basis. GAAP EPS of $1.00 for Q2 were 16% higher than the prior-year quarter's $0.86 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 79.9%, 150 basis points better than the prior-year quarter. Operating margin was 22.3%, 80 basis points better than the prior-year quarter. Net margin was 14.5%, 70 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.28 billion. On the bottom line, the average EPS estimate is $0.32.

Next year's average estimate for revenue is $9.67 billion. The average EPS estimate is $2.24.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 161 members out of 219 rating the stock outperform, and 58 members rating it underperform. Among 82 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 63 give Estee Lauder Companies a green thumbs-up, and 19 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Estee Lauder Companies is outperform, with an average price target of $61.87.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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