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NEW YORK — In a May 5 story about Estee Lauder, The Associated Press erroneously described Fabrizio Freda as chief executive who took over during the third quarter. Freda is the president and chief operating officer of Estee Lauder. He is expected to become CEO on July 1.
A corrected version of the story appears below.
NEW YORK (AP) — An analyst raised her price target on Estee Lauder on Tuesday, after the cosmetics company said fiscal third-quarter earnings dropped 70 percent but results still came in better than expected.
On Monday, the New York-based maker of Clinique, Origins, Mac and Aveda brand cosmetics, said restructuring charges and weakness in Estee Lauder's travel retail business crimped profit, but results still topped Wall Street expectations.
Sales declined nearly 17 percent in Europe, the Middle East and Africa, but they rose nearly 4 percent in the Asia-Pacific region.
Estee Lauder is currently restructuring its business as Fabrizio Freda, currently president and chief operating officer, prepares to become chief executive on July 1.
Caris & Co. analyst Linda Bolton Weiser raised her price target to $41 from $33, meaning shares have room to rise 11.2 percent from Monday's closing price of $36.88.
Weiser said the company's fiscal 2009 sales outlook "appears quite conservative." The company expects sales to decline between 1 percent and 3 percent. Based on sales of $7.91 billion a year ago, that implies revenue between $7.12 billion and $7.67 billion.
Analysts polled by Thomson Reuters expect sales of $7.32 billion.
Weiser said the company is offering fragrance and skin care products in smaller sizes at lower prices to entice consumers to buy. Gifts with purchases are also yielding better returns than in recent years, she added.
Shares of the company declined $2.21, or 6 percent, to $34.68 in afternoon trading.
Separately, competitor Avon Products reported a 36 percent lower first-quarter profit on Tuesday because of a stronger dollar and lower sales. Shares of Avon retreated $2.28, or 9 percent, to $22.94.
