Holiday Purchases Buoy Estee Lauder 2nd-qtr Profit

NEW YORK (AP) - Shoppers splurged on little luxuries for themselves and others during the holiday season, sending The Estee Lauder Cos.' fiscal second-quarter profit up 34 percent.

The beauty products maker also raised its full-year earnings guidance above Wall Street expectations, and its shares jumped 13 percent to a 52-week high.

Estee Lauder's results indicate shoppers are feeling better about buying items like perfume, lotion and makeup for themselves as the economy improves. The company's brands include its namesake products, Clinique, Aveda, Origins, M.A.C. and others.

"The consumer is back to being eager to buy, but she's more choosy and much more demanding," than before the recession," CEO Fabrizio Freda said in an interview with The Associated Press.

Freda said the upwelling demand the company experienced during the holidays probably won't last through the second half of Estee Lauder's fiscal year, however, because Americans face continuing high unemployment and other economic uncertainties.

Net income rose to $343.9 million, or $1.71 per share, from $256.2 million, or $1.28 per share, a year earlier.

Excluding restructuring charges, net income totaled $1.77 per share. That beat analysts' expectations of $1.44 per share, according to FactSet.

Revenue rose 10 percent to $2.49 billion. Analysts surveyed by FactSet expected $2.42 billion.

The company, which gets more than half of its revenue outside the Americas, said the weaker dollar helped its results.

Revenue grew most at the company's travel stores in airports - which produce 20 percent of Estee Lauder's revenue - and in emerging markets. But it rose in all geographic regions and product categories.

Skin care revenue rose 14 percent to $1.03 billion, on strong sales of new products such as Advanced Night Repair Eye Synchronized Complex, which sells for about $65 for a half-ounce.

Makeup revenue rose 8 percent to $882.2 million, helped by Estee Lauder's acquisition of the Smashbox brand in July.

Perfume revenue rose 11 percent to $447.6 million, boosted by new scents for DKNY, Tommy Hilfiger, Coach and others.

Revenue in the Americas rose 8 percent to $988 million, mainly driven by an increase in the U.S.

In Europe, the Middle East and Africa, revenue rose 11 percent to $993.3 million, helped by sales in travel stores as air traffic increased worldwide. The company's Asia/Pacific revenue rose 16 percent to $512.2 million.

For the current quarter, Estee Lauder said it expects net income of 44 cents to 57 cents per share, excluding restructuring costs. Analysts expect it to earn 47 cents per share.

For the year, the company now expects net income of $3.40 to $3.60 per share, excluding costs. Analysts on average expect $3.24 per share, according to FactSet.

Shares rose $11.11, or 13.8 percent, to $91.67 during midday trading, after earlier reaching as high as $92.61, substantially above its previous 52-week high of $84.69.