The skin care category led, followed closely by makeup, as The Estée Lauder Companies Inc., reported net sales for its third quarter ended March 31, 2015 of $2.58 billion, a 1% increase, compared with $2.55 billion in the prior-year quarter. The company reported a 200 basis-point increase in operating margin, and net earnings for the quarter rose 28% to $272.1 million, compared with $213.2 million last year. Diluted net earnings per common share increased 30% to $.71, compared with $.54 in the prior year. For the quarter, the negative impact of foreign currency translation on diluted net earnings per common share was $.10. Excluding the impact of foreign currency translation, net sales increased 8% and diluted net earnings per common share rose 49%.
 
Fabrizio Freda, president and chief executive officer, said, “We posted an excellent third-quarter performance, exceeding our constant currency sales forecast that, combined with disciplined expense management, we leveraged into sharply higher earnings per share. Compelling product innovations, targeted advertising and marketing investments and selective distribution expansion drove double-digit constant currency sales growth in many of our brands.During the fiscal 2015 and 2014 third quarters, the company recorded remeasurement charges of $5.3 million and $38.3 million, equal to approximately $.01 and $.10 per diluted share, respectively, both before and after tax, related to changes in Venezuelan foreign currency exchange rate mechanisms. The fiscal 2014 third quarter also included adjustments associated with restructuring activities. Excluding all charges, net earnings for the three months ended March 31, 2015 were $277.4 million, and diluted net earnings per common share rose 12% to $.72, versus $.64 in the prior-year period. Information about GAAP and non-GAAP financial measures, including reconciliation information, is included in this release.

“Our growth this quarter again came from multiple engines, with particular strength in the United Kingdom and emerging markets, our luxury and makeup brands, and online, specialty-multi and freestanding store channels. Confirming the underlying strength of our brands and programs, we generated these outstanding results in the face of challenges in several countries and continued currency headwinds.”

Looking ahead, Freda said, “In our fiscal fourth quarter we expect continued strong top-line growth, and plan to increase investment spending to further propel momentum and strengthen our future business. For the full fiscal year, we are raising our estimate and now expect constant currency net sales growth of 6% to 7%. The continued strength of the U.S. dollar against most foreign currencies is forecast to further adversely affect our reported results. We are revising our earnings per share estimate for the fiscal year to $2.92 to $2.97, adjusting for the higher impact of currency translation, while at the same time taking up the bottom of the range in constant currency. Our revised earnings per share forecast translates to 8% to 10% growth in constant currency. These estimates are adjusted for charges and the effect of the retailer orders accelerated into fiscal 2014 from the rollout of our Strategic Modernization Initiative. The momentum and agility we have created with the execution of our strategy continues to give us the ability to leverage global opportunities in fast growing areas of prestige beauty, while managing changing market dynamics.”