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Why Estée Lauder’s Stock Has Risen 6.2% Year-to-Date


May. 17 2016, Published 12:07 p.m. ET

Global market falls on May 3, 2016

On May 16, 2016, Estée Lauder’s stock price was trading at $92.79. Its stock price has risen 6.4% year-to-date (or YTD) and 22.8% since January 2015.

On May 2, 2016, the company was trading at its two-year peak of $97.13. Despite strong fiscal 3Q16 results, Estée Lauder’s stock price fell due to a fall in global markets on May 3, 2016.

The fall was primarily due to weak Chinese and British manufacturing data, which revived the threat of slowing global growth and falling US Treasury yields. EL’s stock saw a drastic fall of ~4% to $93.29 after it released its fiscal 3Q16 earnings on May 3. Two weeks after its earnings, its stock has fallen ~0.5%.

The S&P 500 Index (SPY) (IVV) (VOO) also fell 0.9% on May 3, with sharp falls experienced by ten main sectors, including energy and materials, financials, and crude oil. The S&P 500 Index has fallen 0.4% since January 2015, but it has risen 2.7% YTD.

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Beauty companies’ stock prices

Other beauty companies Procter & Gamble’s (PG) and Avon’s (AVP) stock prices have fallen 9.7% and 56.7%, respectively, since January 2015. However, P&G’s stock has risen 4.2% YTD. Similarly, Coty’s (COTY) stock price has risen 24.8% since January 2015 and 2.2% YTD.

The rise in Coty’s stock reflects higher growth for the company in Brazil due to its acquisition of Hypermarcas. Coty’s merger with 43 P&G beauty brands also triggered this growth. To learn more about the deal, you can read Coty Buys 43 Procter & Gamble Brands: What Investors Should Know.

Estée Lauder’s acquisition of By Kilian was complemented by EL’s portfolio of prestige fragrances and contributed 10 basis points of the sales growth in fiscal 3Q16. Estée Lauder delivered strong revenue and earnings results, but its operating margin fell in fiscal 3Q16.

In the coming parts, we’ll learn more about EL’s fiscal 3Q16 earnings and revenue highlights.


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