Estee Lauder rises on 1st-quarter forecast

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NEW YORK -Shares of Estee Lauder Cos. advanced on Friday after the cosmetics company forecast fiscal first-quarter earnings "significantly" higher than it anticipated.

The stock advanced $2.52, or 6.4 percent, to $41.64 in morning trading, setting a new 52-week high of $42.64 at one point.

Estee Lauder attributed the outlook to new product launches, growth in Asia, customer traffic in its travel retail business and improved foreign currency translation.

The company also benefited from earlier holiday shipments that were previously anticipated for the fiscal second quarter.

Estee Lauder didn't provide specific figures, but in August forecast first-quarter earnings between 23 cents and 30 cents per share. Those numbers exclude restructuring charges, which the company did not quantify.

Stifel Nicolaus analyst Mark S. Astrachan said the outlook offers evidence that Estee Lauder's cost-savings program has been successful so far.

It also shows that international airline passenger trends are improving and benefiting the company's travel retail business, he said. Estee Lauder sells its products in many domestic and international airports.

However, Astrachan still thinks sales, especially at high-end outlets like department stores, remain sluggish because consumers are gravitating toward value-focused retailers.

Astrachan rates the stock "Hold."

2009-10-16 11:21:18