Favorable beauty news reported by players such as Arden and P&G also surrounded The Estée Lauder Companies Inc., as the company reported financial results for the fiscal second quarter ended December 31, 2009 that were sharply higher than the prior-year period and the company’s original expectations.

For the second quarter, the company reported net sales of $2.26 billion, an 11% increase compared with $2.04 billion reported in the prior-year period. Excluding the impact of foreign currency translation, net sales increased 6% from the year-ago period. The company reported net earnings for the quarter of $256.2 million, compared with $158.0 million last year. Diluted net earnings per common share rose 60% to $1.28, compared with $.80 reported in the prior year.

The fiscal 2010 second quarter results included an adjustment to reduce anticipated returns, as well as charges associated with restructuring activities. Excluding these items, net sales and diluted net earnings per share for the quarter were not materially different than reported results. A reconciliation between GAAP and non-GAAP financial measures is included in this press release. In connection with its long-term strategic plan, as well as certain ongoing initiatives, the company realized savings of approximately $83 million during the quarter.

The company’s business in each of its product categories and geographic regions continued to be affected by challenging and volatile economic conditions. Despite these conditions, the company was able to outperform its original expectations because of better-than-anticipated sales at lower advertising, merchandising and sampling spending levels in each of the company’s product categories and geographic regions. The better-than-anticipated sales stemmed, in part, from strong growth in Asia, solid increases from higher-margin product launches, higher gains in the company’s travel retail business and the holiday season in the U.S. and the UK, and improved foreign currency translation. The lower spending reflected the decision to eliminate less-efficient advertising, merchandising and sampling in some of the company’s businesses, given the extent of the global economic downturn and the potential risks in the near term that did not materialize during the quarter. For the remainder of the fiscal year, to enhance competitiveness and accelerate momentum, the company plans to increase investment spending well above first-half levels behind more effective advertising, merchandising and sampling.

During the quarter, the company continued to make progress on its strategic goals with significant improvements in cost of sales, reflecting the positive impact of SKU reductions and lower obsolescence. The company realized substantial savings in connection with its restructuring and resizing efforts, as well as from initiatives in indirect procurement. Further, the company’s turnaround brands are experiencing success in their refocus and repositioning initiatives, collectively generating significantly improved results for the first six months of fiscal 2010, compared with the prior-year period. Additionally, the wholesale business of the Prescriptives brand will close on January 31, 2010. The company has successfully directed consumers to similar products at other Estée Lauder Companies’ brands and plans to leverage the assets, formulas and trademarks of Prescriptives within the company.