Estee Lauder 2002 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2002 Estee Lauder annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 83

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83

11
We generated net sales in fiscal 2002 of $4.74 billion, a 2% increase over fiscal 2001. In constant currency, net sales
for the year grew 3%. Our net earnings were $289.4 million compared with $347.7 million in fiscal 2001. Diluted
earnings per common share were $1.10 compared with $1.34 in the prior year. These results are before the
cumulative effect of a change in accounting principles and before the restructuring charges, but include $.05 per
common share of goodwill amortization in fiscal 2001, as detailed in this annual report on page 43.
In Europe, the Middle East & Africa, net sales increased 3% over last year, excluding the impact of foreign currency
translation. Excluding the shortfall in the Company’s travel retail business, which is reported in this region, net sales
in local currency increased 9%. The Company posted a 3% increase in reported net sales for the region over
the prior year to $1.26 billion. On a local currency basis, Asia/Pacific net sales grew 9% versus the prior year.
Net sales in the region on a reported basis rose 2% to $610.6 million. In the Americas, our largest region, which
was particularly affected by external challenges, sales rose 1% to $2.88 billion.
RESULTS BY PRODUCT CATEGORY
Product innovation, one of our hallmarks, continued as a strong impetus for growth this year. Many of our brands
benefited from cutting edge technologies developed by our laboratories that furthered our reputation for superior
products while increasing our speed-to-market. We have introduced more than 300 new products this year that
incorporate the best ideas from around the world. This is one of the key benefits of our global reorganization
announced last year. Our innovation extends into our packaging and for the second year in a row, Cosmetics
and Packaging Magazine named us Packager of the Year.
OUR VISION OF OURSELVES AS “LONG DISTANCE
RUNNERS” AS OPPOSED TO “SPRINTERS” HAS PROVEN
TO BE A SOUND APPROACH.
Makeup sales benefited from a surge in lip and eye products. Net sales of makeup products for the year rose 5%
before the impact of foreign currency translation and increased 4% to $1.79 billion on a reported basis.
Skin care sales for the fiscal year rose 4% before foreign currency translation, while reported sales increased 3%
to $1.70 billion.
Fragrance had a difficult year that resulted in a 6% decline in sales to $1.02 billion. Our fragrance category
was particularly hard hit by the slowdown in the United States and the disruption in the travel retail business.
These two areas account for approximately two thirds of our fragrance business. However, fragrance remains
important to our Company and we will continue to support it. Collectively, The Estée Lauder Companies
produces more than 70 individual fragrances and four of the top ten prestige fragrances sold at U.S. department
stores during fiscal year 2002.
The hair care category posted the strongest sales growth, off a smaller base, with reported net sales up 19% to
$215.8 million. Our focused distribution strategy has built increased awareness for our brands, resulting in higher
productivity per door.