Shares in The Estee Lauder Companies Inc (NYSE:EL) zipped higher on Friday after the make-up giant gave investors a surprise two-for-one.
It beat Wall Street forecasts with its fourth quarter results and said full-year profits for the current year (2018) should be ahead of current expectations.
For the three months ended 30 June, the cosmetics maker said net sales jumped by 9% to US$2.89bn, ahead of estimates for US$2.86bn.
Net income rose to US$229mln or 61 cents a share, compared to just US$94mln or 25 cents a year ago. Analysts had been looking for earnings per share of 38 cents.
Estée Lauder said the good performance had been driven by strong demand for its make-up unit, which accounts for almost half of sales and is home to big name brands such as such M.A.C, Smashbox and Tom Ford.
There were also some encouraging signs from China, where the results showed double digit increases.
Haircare was the only real disappointment, with sales continuing to fall with another 2% drop in sales.
2018 set to be a good year as well
The New York-based firm also said it expects full-year net sales to rise between 8% and 9%, while it is forecasting an adjusted profit of US$3.87 to US$3.94 per share in 2018. Analysts had previously estimated US$3.79 share.
The global prestige beauty market is expected to grow at between 4% to 5% next year, but Estée is targeting a little bit more than that.
“The company’s annual growth has consistently outpaced global prestige beauty and is expected to continue to grow at least two percentage points ahead of the industry for fiscal 2018,” the company said.
Shares jumped 7% to US$105.20.