Shares of Estee Lauder Companies (EL) saw a significant surge of 10.7% in premarket trading on Monday. The beauty-products company reported a fiscal second-quarter profit that exceeded expectations by a wide margin. In addition, the company stated that it has reached “an inflection point” that positions it for a strong second half.
In the year-ago period, net income for the quarter that ended on December 31 fell to $313 million, or 87 cents a share. However, adjusted earnings per share of 88 cents, excluding nonrecurring items, surpassed the FactSet consensus of 54 cents. Sales declined 7.4% to $4.28 billion, mainly due to challenges in Asia travel retail and softness in prestige beauty in China. Nevertheless, this revenue figure still managed to surpass the FactSet consensus of $4.19 billion.
Breaking down the largest business segments, skin care sales dropped 10% to $2.17 billion and makeup sales declined 8% to $1.17 billion. Despite these setbacks, the company remains optimistic about the future and expects double-digit percentage organic sales growth in the second half of the fiscal year.
Over the past 12 months, Estee Lauder Companies’ stock has experienced a decline of 50.2%. In comparison, the S&P 500 has rallied by 19.9%.