Shares of cosmetics maker Estee Lauder Inc. (EL) hit a new 52-week high of $77.39 on Aug 25, 2014 on the back of solid fourth-quarter fiscal 2014 results and positive outlook for fiscal 2015. The stock recorded a healthy year-to-date return of 4.7%
Solid Fourth-Quarter Performance
Estee Lauder’s fourth-quarter earnings of 45 cents missed the Zacks Consensus Estimate by approximately 20%, but more than doubled from the prior-year quarter backed by decent revenues across all the segments. Net sales increased 5% year over year on the back of higher sales in most of the geographic regions and major product categories. (Read: Estee Lauder Misses on Q4 Earnings, Issues FY15 Guidance)
Estee Lauder expects its business momentum to continue in the upcoming year backed by 3–4% growth in the global prestige beauty sector. Although the first quarter of fiscal 2015 may be negatively impacted by the acceleration of reorders in the third quarter of 2014, the company promises to turn around and gain momentum as the year progresses.
Investors are also encouraged by Estee Lauder’s its best-in-class collection of brands, innovation and product launch line-up for the upcoming year. It plans to launch a new shower gel and body lotion as well as limited edition mascara and repair sets in fiscal 2015. The booming tourism sector is also expected to boost the travel retail category of the company.
Other Stocks to Consider
Headquartered in New York, Estee Lauder engages in the manufacture and sale of skin care, makeup, fragrance and hair care products and currently carries a Zacks Rank #3 (Hold).
Other stocks in the consumer staples sector worth considering are Treehouse Foods, Inc. (THS), Hain Celestial Inc. (HAIN) and Pinnacle Foods Inc. (PF). While Treehouse sports a Zacks Rank #1 (Strong Buy), Hain Celestial and Pinnacle have a Zacks Rank #2 (Buy).
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