SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) :
April 16, 2002
The Estee Lauder Companies Inc.
(Exact name of registrant as specified in its charter)
Delaware 11-2408943
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Commission File Number:1-14064
767 Fifth Avenue, New York, New York 10153
(Address of principal executive offices) (Zip Code)
212-572-4200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On April 16, 2002, The Estee Lauder Companies Inc. issued a press release
announcing its reclassification of consolidated statements of earnings for new
accounting rule EITF No. 00-14. A copy of the press release is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
THE ESTEE LAUDER COMPANIES INC.
Date: April 16, 2002 By: /s/Richard W. Kunes
Richard W. Kunes
Senior Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
THE ESTEE LAUDER COMPANIES INC.
EXHIBIT INDEX
Exhibit No.Description
99.1 Press release dated April 16, 2002 of The Estee Lauder Companies Inc.
Exhibit 99.1
News
Contact:
Investor Relations:
Dennis D'Andrea
212) 572-4384
Media Relations:
767 Fifth Avenue Sally Susman
New York, NY 10153 (212) 572-4430
________________________________________________________________________________
FOR IMMEDIATE RELEASE:
ESTEE LAUDER COMPANIES RECLASSIFIES CONSOLIDATED STATEMENTS OF
EARNINGS FOR NEW ACCOUNTING RULE EITF No.00-14
New York, NY, April 16, 2002 - The Estee Lauder Companies Inc. (NYSE:EL) today
provided reclassified consolidated statements of earnings for previously
reported fiscal 2001 and 2002 quarterly results and full fiscal year results
ended 1998 through 2001. The reclassified statements of earnings reflect the new
provisions required by Emerging Issues Task Force (EITF) Issue No. 00-14,
"Accounting for Certain Sales Incentives," which the Company adopted effective
January 1, 2002.
EITF 00-14 provides guidance for when sales incentives and discounts should be
recognized, and where the related revenues and expenses should be classified in
companies financial statements. Prior to adopting this rule, the Company's
gift-with-purchase and purchase-with-purchase costs and revenues were recorded
net as operating expenses on the consolidated statement of earnings.
In compliance with EITF 00-14, the Company reclassified promotional revenues to
sales and the cost of promotional merchandise to cost of sales. The new rule has
been applied to prior periods retroactively for comparability. The
reclassifications increased prior full fiscal year sales by approximately 1% to
2% and cost of sales as a percent of sales by approximately 5 to 6.5 percentage
points, offset by a corresponding reduction in operating expenses.
The reclassifications do not change the Company's operating income, net earnings
or net earnings per common share.
Expected Fiscal 2002 Third Quarter Financial Results Reporting Date
-------------------------------------------------------------------
The Company expects to release fiscal 2002 third quarter financial results on
Tuesday, April 30, 2002. On that date, the Company will webcast its conference
call with securities analysts where management will discuss the results, future
prospects and any recent corporate developments. The call will begin at 10:15
a.m. EST.
Those wishing to access the webcast can visit the "Investor Information" section
of www.elcompanies.com, the Company's website. The call will be archived on the
site for two weeks.
The Estee Lauder Companies Inc. is one of the world's leading manufacturers and
marketers of quality skin care, makeup, fragrance and hair care products. The
Company's products are sold in over 120 countries and territories under
well-recognized brand names, including Estee Lauder,
Clinique, Aramis, Prescriptives, Origins, M.A.C, Bobbi Brown, Tommy Hilfiger,
La Mer, jane, Donna Karan, Aveda, Stila, Jo Malone, Bumble and bumble
and Kate Spade.
An electronic version of this release can be found at the Company's Website,
www.elcompanies.com.
-Tables Follow-
THE ESTEE LAUDER COMPANIES INC.
Reclassifications for Emerging Issues Task Force No. 00-14,
"Accounting for Certain Sales Incentives"
(Dollars in millions)
(Unaudited)
Fiscal 2002 Fiscal 2001
Three Months Ended Three Months Ended
------------------ ------------------
September 30 December 31 September 30 December 31 March 31 June 30
------------ ----------- ------------ ----------- -------- -------
Before Reclassification:
------------------------
Net Sales $1,187.7 $1,257.4 $1,177.7 $1,291.6 $1,101.7 $1,037.1
Cost of Sales 254.5 276.4 263.3 278.0 226.1 204.9
Gross Profit 933.2 981.0 914.4 1,013.6 875.6 832.2
Gross Margin 78.6% 78.0% 77.6% 78.5% 79.5% 80.2%
Operating Expenses 780.3 837.5 761.1 810.1 770.3 798.7
Operating Expense Margin 65.7% 66.6% 64.6% 62.7% 69.9% 77.0%
Operating Income 152.9 143.5 153.3 203.5 105.3 33.5
Operating Margin 12.9% 11.4% 13.0% 15.8% 9.6% 3.2%
After Reclassification:
-----------------------
Net Sales $1,194.8 $1,298.2 $1,185.0 $1,332.0 $1,103.5 $1,047.2
Cost of Sales 345.3 343.3 349.6 339.0 297.7 240.1
Gross Profit 849.5 954.9 835.4 993.0 805.8 807.1
Gross Margin 71.1% 73.6% 70.5% 74.5% 73.0% 77.1%
Operating Expenses 696.6 811.4 682.1 789.5 700.5 773.6
Operating Expense Margin 58.3% 62.5% 57.6% 59.3% 63.5% 73.9%
Operating Income 152.9 143.5 153.3 203.5 105.3 33.5
Operating Margin 12.8% 11.1% 12.9% 15.3% 9.5% 3.2%
Net Sales - After Reclassification:
-----------------------------------
By Region:
The Americas $770.3 $751.4 $788.8 $776.5 $686.6 $605.9
Europe, the Middle East & Africa 273.8 368.3 255.6 374.9 283.7 307.6
Asia/Pacific 150.7 178.5 140.6 180.6 133.2 141.7
Restructuring - - - - - (8.0)
------- ------- ------- ------- ------- -------
Total Net Sales $1,194.8 $1,298.2 $1,185.0 $1,332.0 $1,103.5 $1,047.2
======== ======== ======== ======== ======== ========
By Product Category:
Skin Care $396.1 $444.8 $397.9 $435.8 $419.6 $407.4
Makeup 449.9 428.1 433.7 432.0 464.5 391.4
Fragrance 293.4 362.4 302.0 413.2 173.8 196.1
Hair Care 50.0 58.4 45.6 43.0 39.9 52.2
Other 5.4 4.5 5.8 8.0 5.7 8.1
Restructuring - - - - - (8.0)
------- ------- ------- ------- ------- -------
Total Net Sales $1,194.8 $1,298.2 $1,185.0 $1,332.0 $1,103.5 $1,047.2
======== ======== ======== ======== ======== ========
During the fiscal 2002 third quarter, the Company adopted Emerging Issues Task
Force No. 00-14, "Accounting for Certain Sales Incentives." This new rule
requires where certain sales incentives and related expenses are classified in
the Company's financial statements. Prior to this rule, the cost of promotional
merchandise and related revenues was reported as operating expenses. In
compliance with this new rule, the Company has reclassified all promotional
revenues to sales and the cost of promotional merchandise to cost of sales. Upon
reclassification, operating income remains unchanged. Per the attached tables,
this rule has been applied retroactively for purposes of comparability.
THE ESTEE LAUDER COMPANIES INC.
Reclassifications for Emerging Issues Task Force No. 00-14,
"Accounting for Certain Sales Incentives"
(Dollars in millions)
Fiscal Year Ended June 30
-------------------------
2001 2001
As Before One -
Reported Time Charges 2000 1999 1998
Before Reclassification: __________________________________________________________________________________
------------------------
Net Sales $4,608.1 $4,616.1 $4,366.8 $3,961.5 $3,618.0
Cost of Sales 972.3 971.2 972.1 899.9 819.5
Gross Profit 3,635.8 3,644.9 3,394.7 3,061.6 2,798.5
Gross Margin 78.9% 79.0% 77.7% 77.3% 77.3%
Operating Expenses 3,140.2 3,086.3 2,878.9 2,604.7 2,389.4
Operating Expense Margin 68.1% 66.9% 65.9% 65.8% 66.0%
Operating Income 495.6 558.6 515.8 456.9 409.1
Operating Margin 10.8% 12.1% 11.8% 11.5% 11.3%
After Reclassification:(Unaudited)
----------------------------------
Net Sales $4,667.7 $4,675.7 $4,440.3 $4,040.3 $3,688.7
Cost of Sales 1,226.4 1,225.3 1,238.0 1,162.8 1,079.1
Gross Profit 3,441.3 3,450.4 3,202.3 2,877.5 2,608.6
Gross Margin 73.7% 73.8% 72.1% 71.2% 70.7%
Operating Expenses 2,945.7 2,891.8 2,686.5 2,420.6 2,200.5
Operating Expense Margin 63.1% 61.8% 60.5% 59.9% 59.7%
Operating Income 495.6 558.6 515.8 456.9 409.1
Operating Margin 10.6% 11.9% 11.6% 11.3% 11.1%
Net Sales - After Reclassification: (Unaudited)
-----------------------------------------------
By Region:
The Americas $2,857.8 $2,857.8 $2,714.0 $2,457.5 $2,257.7
Europe, the Middle East & Africa 1,221.8 1,221.8 1,142.2 1,094.8 972.2
Asia/Pacific 596.1 596.1 584.1 488.0 458.8
Restructuring (8.0) - - - -
------- ------- ------- ------- -------
Total Net Sales $4,667.7 $4,675.7 $4,440.3 $4,040.3 $3,688.7
======== ======== ======== ======== ========
By Product Category:
Skin Care $1,660.7 $1,660.7 $1,577.0 $1,424.8 $1,271.7
Makeup 1,721.6 1,721.6 1,603.5 1,437.0 1,339.8
Fragrance 1,085.1 1,085.1 1,117.2 1,077.2 1,012.8
Hair Care 180.7 180.7 113.9 82.4 52.4
Other 27.6 27.6 28.7 18.9 12.0
Restructuring (8.0) - - - -
------- ------- ------- ------- -------
Total Net Sales $4,667.7 $4,675.7 $4,440.3 $4,040.3 $3,688.7
======== ======== ======== ======== ========
Fiscal 2001 fourth quarter and full year periods include one-time pre-tax
charges of $63.0 million for restructuring and other non-recurring expenses
related to repositioning certain business.
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