Similar to Elizabeth Arden (ticker: RDEN), Estee Lauder (ticker: EL) is enjoying substantial success in China. President and CEO William Lauder and CFO Rick Kunes had the following to say during management's Q4 2005 earnings results conference call:
On China Operations
....our business in China nearly doubled this year, and we increased distribution of our core brands into 23 cities.
....we continued our expansion in China with the launch of our La Mer brand and we increased distribution there of the Clinique and Estee Lauder brand.
....we are launching M.A.C and Bobbi Brown in China and we will continue to expand distribution for our core brands in that important market where Clinique has been the fastest growing prestige brand.
....I think I referenced China, that's related to building and infrastructure so making sure we have the management talent, the distribution capable, the IS resources, to run a business which is much larger than we currently have in China, because we want to be prepared to have a business, which we believe will be one of our largest affiliates in just a short few years.
On China Currency Re-valuation
.....Let me briefly touch on what the re-valuation of the Chinese yuan means to us. While our business in China is growing rapidly it represents less than 1% of our total sales. Additionally, most of our contracts with suppliers are in U.S. dollars. Therefore, we expect minimal impact from this re-valuation in the near-term.
(Quotes are from the CCBN StreetEvents transcript.)
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