OREANDA-NEWS. The Estée Lauder Companies Inc. (NYSE:EL) today reported strong financial results for its fourth quarter and fiscal year ended June 30, 2016.

Fabrizio Freda, President and Chief Executive Officer, said, “Our fiscal 2016 performance gives us much to celebrate. We again delivered strong constant currency net sales growth and double-digit adjusted constant currency EPS growth, reflecting the compelling products and services we bring to consumers around the world. We capitalized on shifting consumer preferences by leveraging our strength in makeup and positioning our Company to win in luxury fragrances. We nimbly allocated resources and made strategic investments in areas that gave us terrific results, including emerging markets, our makeup category, and the online and specialty-multi retail channels. Importantly, we achieved these results against a backdrop of social and political instability, currency volatility and economic challenges.”

For the three months ended June 30, 2016, the Company reported net sales of $2.65 billion, a 5% increase compared with $2.52 billion in the prior-year period, posting across-the-board sales gains in all geographic regions and product categories, except fragrance. Fiscal 2016 fourth quarter sales benefited from innovative new products and double-digit growth in several emerging and developed markets. The Company also generated double-digit gains in its travel retail and online channels. Net earnings for the quarter were $93.5 million, compared with $153.0 million last year, and diluted net earnings per common share were $.25, compared with $.40 reported in the same prior-year period. The fiscal 2016 fourth quarter included the effect of restructuring and other charges described below.

Excluding the impact of foreign currency translation, net sales increased 7%. For the quarter, the negative impact of foreign currency translation on diluted net earnings per common share was $.01. Adjusting for the restructuring and other charges, diluted net earnings per common share for the three months ended June 30, 2016 were $.43, and in constant currency rose 11% to $.44.

For the year, the Company achieved net sales of $11.26 billion, a 4% increase compared with $10.78 billion in the prior year. Net earnings for the year were $1.11 billion, a 2% increase compared with $1.09 billion last year, and diluted net earnings per common share rose 5% to $2.96, compared with $2.82 reported in the prior year. The fiscal 2016 full year included the effect of restructuring and other charges and adverse currency translation, and the comparison with the prior-year period was favorably impacted by accelerated retailer sales orders, described below.

For the year, the negative impact of foreign currency translation on diluted net earnings per common share was $.26. Adjusting for the restructuring and other charges, diluted net earnings per common share for the fiscal year ended June 30, 2016 were $3.20, and in constant currency rose to $3.46.

Adjusting for the impact of the charges and the accelerated orders, net sales and diluted earnings per common share in constant currency for the fiscal year ended June 30, 2016 would have increased 7% and 13%, respectively. Net sales in constant currency grew in each of the Company’s geographic regions and product categories.

Information about GAAP and non-GAAP financial measures, including reconciliation information, is included in this release.

Mr. Freda continued, “In fiscal 2017, we will aggressively pursue new opportunities to enhance our leadership position. We will continue to diversify our distribution toward the fastest growing channels, while further developing our mid-sized brands and the newest additions to our portfolio. With our Leading Beauty Forward initiative, we are laying the foundation for future growth by lowering our cost base, increasing our agility and investing behind our strengths and improving our go-to-market capabilities.

“We will also seek geographic and channel opportunities to reach even more consumers, while keeping a sharp focus on like-door growth. We expect our new product launches, digital programs, social media engagement and focused M&A activities to drive constant currency net sales growth of 6% to 8% and double-digit EPS growth over the next three years, excluding restructuring and other charges, consistent with our long-term objectives. For fiscal 2017, we are reflecting the significant external headwinds and volatility and forecasting constant currency sales growth of 6% to 7%. We will thoughtfully balance cost savings, sales leverage and reinvestment to position us to deliver constant currency double-digit EPS growth also this fiscal year.”

During the fiscal 2016 fourth quarter, the Company recorded restructuring and other charges of $101.0 million ($69.6 million after tax), equal to $.18 per diluted share in connection with its previously announced global technology infrastructure (GTI) and Leading Beauty Forward (LBF) initiatives.

During fiscal 2016, the Company recorded restructuring and other charges of $134.7 million ($91.3 million after tax), equal to $.24 per diluted share in connection with its GTI and LBF initiatives. See tables on page 12.

The fiscal 2016 full year comparison with the prior-year period was favorably impacted by the acceleration of sales orders from certain retailers of approximately $178 million in connection with the Company’s rollout of its last major wave of its Strategic Modernization Initiative (SMI) in July 2014 in certain of its locations. Those orders would have occurred in the Company’s fiscal 2015 first quarter. This amounted to approximately $127 million in operating income, equal to approximately $.21 per diluted share.