Makeup millions
With its shares up 57 percent this year to a record, and with profit margins plumped and all four business segments going strong, it has been a great year for the Estée Lauder Cos.
But it’s been even better for the Lauder family, which founded the cosmetics giant here 64 years ago and still controls about 83 percent of the voting shares.
The seven Lauder family members with ties to the company, led by Chairman William Lauder, have sold a tidy $300 million worth of shares so far this year and are in line to receive as much as $790 million in shares to be issued early next year.
The 2010 payout would be the year’s biggest reported by a family-controlled public company, records show.
“It’s a great company doing great things, and the Lauders are able now to benefit by planning to diversify their assets under very favorable conditions,” said analyst Peter S. Cohan of Peter S. Cohan Associates.
“They demonstrated the beauty of their business model,” added JPMorgan Chase analyst John Faucher in a recent glowing report.
“If their spending can be this efficient, smarter spending will drive a massive incremental gross profit.”
Faucher added that all of the company’s global divisions “grew in the double-digits, something we have not seen in recent history.”
From a low of $19.93 early last year at the depths of the recession, shares have nearly quadrupled to a high of $76.26 this week ahead of the Thanksgiving holiday — before closing at $75.91 on Wednesday.
The company, whose brand lineup includes Bobbi Brown, Clinique, MAC, Origins and Aveda, as well as its namesake brand, has seen its shares soar a whopping 36 percent in less than three months.
The company said the share jump triggered its long-established stock-benefits program, which causes shares to be sold at certain price levels, and spurred family-held securities to be sold or exercised in the millions each week since the summer.
Indeed, in a single trading day in early November, $20.3 million worth of shares held by family insiders were sold as the stock swelled to around $75 per share.
The family’s stock is valued at $6.1 billion, including supervoting shares that give the Lauders 83 percent of the voting power.
It seems to go without saying that the seven family members involved in the company won’t have to touch any of their crucial stakes to meet family needs in the future.
The seven Lauders — all descendants of late founder Estée Lauder and guided by her son, patriarch Leonard Lauder, 77 — have amassed stock-based awards and options that will be enhanced even more next year by the newly minted $790 million in common shares approved by the board, filings said.
Those 11.1 million new shares are based on a stock price of $70.70.
