Estee Lauder’s stock soars as profit beats expectations by a wide margin, and as the business has reached ‘an inflection point’

Shares of Estee Lauder Companies
EL,
-0.43%
soared 10.7% in premarket trading Monday, after the beauty-products company reported fiscal second-quarter profit that beat expectations by a wide margin, and said the business has reached “an inflection point” that sets its up for a strong second half. Net income for the quarter to Dec. 31 fell to $313 million, or 87 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 88 cents beat the FactSet consensus of 54 cents. Sales declined 7.4% to $4.28 billion. reflecting challenges in Asia travel retail and softness in prestige beauty in China, but came in above the FactSet consensus of $4.19 billion. Among the company’s largest business segments, skin care sales fell 10% to $2.17 billion and makeup sales declined 8% to $1.17 billion. Looking ahead, the company expects double-digit percentage organic sales growth in the second half of the fiscal year. The stock has dropped 50.2% over the past 12 months through Friday while the S&P 500
SPX,
+1.07%
has rallied 19.9%.