Shop Talk

Retailers, consumers and prices

Check Out Line: The slow return of the splurge

January 28, 2010

Check out signs that consumers are getting more comfortable with spending and, at times, even splurging.

Estee Lauder reported a far better-than-expected 62 percent jump in quarterly profit and boosted its full-year forecast as consumers began to splurge on cosmetics after a year-long slide in sales. Results were helped by strong growth in Asia, new products, and a better-than-expected performance in airport stores and in the United States.

pgUnder Armour, the maker of athletic clothing and footwear, reported an 83 percent rise in its holiday-quarter profit helped by gains in its apparel business. It said it now expects 2010 revenue and earnings to grow 10 percent to 12 percent, up from its prior range that called for a rise in the high-single to low-double-digits.

Meanwhile, Procter & Gamble and Colgate-Palmolive posted better-than-expected quarterly results and boosted sales of their brand name products in the last few months by convincing consumers to spend a little more with a bigger investment in advertising. Profit at P&G, the maker of Tide laundry detergent and Pampers diapers, fell less than anticipated.  A higher profit at toothpaste and dish-soap maker Colgate was even stronger than analysts expected.

But consumers don’t feel comfortable spending across the board. Ethan Allen reported a wider than expected loss in its quarter as cost cuts failed to offset weak demand for its higher-priced furniture.

And Estee Lauder Chief Executive Fabrizio Freda said the company is taking nothing for granted:

“While certain businesses have shown signs of improvement, and the economic challenges and some external uncertainties have abated, we remain mindful that they have not completely disappeared,” he said in a statement.

Also in the basket:

Li & Fung in $2 bln sourcing deal with Wal-Mart

Altria sees challenging 2010 economy

Mead Johnson profit up but misses Wall St view

(Photo: Reuters)

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