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How Has Estée Lauder’s Stock Performed Year-To-Date?


Mar. 17 2016, Published 1:13 p.m. ET

By Kilian acquisition triggered stock price

On March 14, 2016, Estée Lauder’s (EL) stock price was trading at a peak of $93.83. The stock price has risen 7.6% YTD (year-to-date) and 24.1% since January 2, 2015. The increase in Estée Lauder’s stock is primarily due to strong fiscal 2Q16 results and its recent acquisition of By Kilian. This acquisition helped the stock gain momentum after a drop of 7.8% to $82.40 on January 27, 2016, from $89.40 on December 29, 2015.

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Price movement

After the company released earnings on February 5, 2016, its stock price rose 4.6% to $90.69. In comparison, the S&P 500 (SPY) (IVV) (VOO) has fallen 1.8% since January 2, 2015. Procter & Gamble’s (PG) and Avon’s (AVP) stock prices have also fallen, by 10.2% and ~53%, respectively, since January 2, 2015.

However, Coty’s (COTY) stock price has risen 33.1% since January 2, 2015. The increase in Coty’s price reflects strong fiscal 2Q16 results and its latest acquisition of Hypermarcas. This acquisition will help increase Coty’s exposure to higher growth in emerging markets, especially in Brazil. Coty’s merger with 43 Proctor & Gamble beauty brands also triggered the growth. To learn more about the deal please read Coty Buys 43 Procter & Gamble Brands: What Investors Should Know.

Acquisition contribution

Estée Lauder continues to expand through acquisitions. In fiscal 2Q16, acquisitions contributed ~70 basis points of the sales growth. According to Fabrizio Freda, president and chief executive officer of Estée Lauder, its acquisition of By Kilian will be a perfect complement to EL’s portfolio of prestige fragrances. In fiscal 3Q16, Estée Lauder expects revenue to rise 6% to 7% in constant currency terms, including 70 basis points from acquisitions.

We’ll discuss the deal in part six of this series. In the coming parts, we’ll learn more about EL’s fiscal 2Q16 earnings and revenue.


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