The cosmetics company Estee Lauder recently reported that its second quarter profit was boosted by 34% thanks to holiday shoppers and a weaker dollar. The company now has a better outlook for the coming year and a higher share-price as a result. Estee Lauder has been around since 1946 when Joseph and his wife Estee began producing different cosmetic products in New York City. The company has since expanded to include businesses in Europe, the Middle East, Africa and China. Because of the current high level of unemployment in the US, chief executive Fabrizio Freda doesn’t see the high profit being sustainable. However, for the time being the company is greatly enjoying the increased revenue. They recently developed new products such as Clinique’s dark spot corrector and thanks to luxury consumers saw an 11% rise in local currencies. To make other profit, Estee Lauder gained shares in department and speciality stores which helped raise their shares to $91.80, up 14% in the NY Stock Exchange. In addition to doing well in the U.S., the company’s international businesses have also experienced large sales increases in the past quarter. Due to China’s booming economy and emerging middle class women who are seeking more makeup products, Estee Lauder sales rose 29%. Revenue growth also results from the company having many products to sell. Estee Lauder owns Clinique, Origins and Smashbox. In terms of economics, the company did have to shell out some money for restructuring charges but demand has been increasing and so sales continue to rise. It seems there is a high demand in the skin care business, followed by makeup and small fragrances. Estee Lauder’s slogan is “bringing the best to everyone we touch” and people are clearly realizing the quality of this company’s products. Even though most of their products are high end and a bit more expensive, consumers are still purchasing them because they want high quality. Estee Lauder may have been around for a while but that doesn’t mean it’s losing any ground whatsoever. It definitely seems like this a company worth investing in.
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http://online.wsj.com/article/SB10001424052748703652104576122230192422522.html?mod=WSJ_Consumerproducts_leftHeadlines
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