For the year, the Company had net sales of $7.32 billion, a 7% decrease compared with $7.91 billion reported in the prior fiscal year. Excluding the impact of foreign currency translation, net sales declined 2%. The Company reported net earnings, including charges associated with restructuring activities, for the year ended June 30, 2009 of $218.4 million, compared with $473.8 million last year. Diluted net earnings per common share for the year were $1.10, compared with $2.40 reported in the prior year.

The fiscal 2009 full year results included charges associated with restructuring activities of $91.7 million (pre-tax), equal to $.31 per diluted common share. Excluding these charges, net earnings for the fiscal 2009 full year were $280.1 million and diluted earnings per share were $1.42. A reconciliation between GAAP and non-GAAP financial measures is included in this press release.

During the year, the Company's business in each of its product categories and geographic regions continued to be adversely impacted by the challenging and volatile global economic conditions. The worldwide economic downturn negatively affected consumer demand, resulting in weak retail sales and inventory destocking by certain key retailers. These conditions are reflected in the Company's sales and operating results and were most pronounced in the Americas and Europe, the Middle East & Africa regions. For the full fiscal year, in the Asia/Pacific region, the Company generated a strong performance, reporting double-digit sales growth in constant currency as well as double-digit gains in operating income. Despite the challenging economic climate, the Company believes it gained share globally in much of its distribution.

In the second half of the fiscal year, the Company recorded charges for goodwill and intangible and other long-lived asset impairments that negatively impacted the operating results of each product category as well as the Americas and Europe, the Middle East & Africa regions.

William P. Lauder, Executive Chairman, said, "The extraordinary economic difficulties we faced in fiscal 2009 resulted in lower net sales and earnings. While I am disappointed with our overall performance, throughout the fiscal year our Company rallied to meet the challenging business conditions in the many regions of the world we serve. We reacted quickly and strongly to temper the impact on our results. We prioritized investments and accelerated cost reductions. We also resized our Company to meet near-term needs and began implementing a restructuring program to position us for the long term. As a result, our Company today remains strong: we were profitable, our balance sheet is healthy and our cash flow was solid."

Fabrizio Freda, President and Chief Executive Officer, said, "Across the Company we are leveraging our strengths and addressing our opportunities while building needed capabilities and focusing on cost savings. The Estée Lauder Companies will benefit from a more integrated organization that will bring us closer to consumers around the world and is pursuing our most promising opportunities across categories, brands, regions and channels. I am very pleased how well our Company has embraced this new structure."

  Full-Year Results by Product Category                                                                                                                                                                                                                                                                                      Year Ended June 30                                                                                                                                                                           Operating                Percent        (Unaudited; Dollars in millions)        Net Sales                    Percent Change             Income (Loss)            Change                                                                              Reported    Local                                   Reported                                                  2009            2008      Basis       Currency       2009          2008       Basis                                                                                                                                                  Skin Care                               $  2,886.0      $  2,996.8   (3.7   )%   1.8    %    $  294.1      $  405.6      (27.5     )%   Makeup                                     2,830.9         3,000.4   (5.6   )    (1.1   )       279.8         359.4      (22.1     )    Fragrance                                  1,150.9         1,432.0   (19.6  )    (14.4  )       (60.8  )      36.2       (100.0    )+   Hair Care                                  402.4           427.1     (5.8   )    (3.0   )       1.1           11.5       (90.4     )    Other                                      61.7            54.5      13.2        17.1           (4.1   )      (1.6   )   (100.0    )+   Subtotal                                   7,331.9         7,910.8   (7.3   )    (2.4   )       510.1         811.1      (37.1     )    Returns and charges associated with                                                                                                     restructuring activities                   (8.1     )      -                                    (91.7  )      (0.4   )                  Total                                   $  7,323.8      $  7,910.8   (7.4   )%   (2.5   )%   $  418.4      $  810.7      (48.4     )%    -------------------------------------------------------------------------------  

Skin Care

Sales in constant currency increased, with double-digit growth in Asia/Pacific, reflecting that region's focus on skin care products, but decreased in the Company's other regions. On a reported basis, sales decreased, reflecting the impact of foreign currency translation.

Several new and existing products aided net sales in the skin care category, but were offset by lower sales from other existing products, as well as the impact of the economic downturn as noted above. The Company gained share in this category during the fiscal year in U.S. prestige department stores and in certain countries in stores where its products are sold.

Across each region, the recent launches of Perfectionist [CP+] Wrinkle Lifting Serum and the new Time Zone line of moisturizing products by Estée Lauder, as well as Superdefense SPF 25 Age Defense Moisturizer and Youth Surge SPF 15 Age Decelerating Moisturizer from Clinique, contributed incremental sales.

Operating income decreased, reflecting the decline in net sales, as well as the charges noted above, the impact of a portion of a manufacturing overhead charge, and losses from foreign exchange transactions.

Makeup

In constant currency, makeup sales increased double-digits in Asia/Pacific and were relatively unchanged in Europe, the Middle East & Africa, which were more than offset by declines in the Americas.

On a reported basis, the net sales decrease was primarily attributable to the Company's heritage brands. These brands collectively posted higher declines in international markets than domestically. Makeup artist brands also reported an overall global sales decline during the year driven by the Americas region. The Company believes its makeup artist brands gained share internationally within their distribution.

The lower makeup sales reflected declines across a broad range of products. However, positively affecting makeup sales were products such as the reformulated Superfit Makeup and High Impact Lip Colour SPF 15 from Clinique, as well as Signature Blush and TurboLash All Effects Motion Mascara by Estée Lauder. Incremental net sales to new international points of distribution also helped offset the decline in this category.

Operating income decreased, primarily reflecting the lower net sales. Operating income also included the impact of a portion of a manufacturing overhead charge and losses from foreign exchange transactions.

Fragrance

During the year, the Company continued to face challenges in this product category, due in part to competitive dynamics, coupled with the economic downturn. As a result, fragrance sales declined in each region.

The largest decrease was due to lower sales of designer fragrances. Also contributing to the decline were lower sales of certain Estée Lauder and Clinique fragrances.

The recent successful launches of Estée Lauder Sensuous, Hilfiger Men by Tommy Hilfiger, I Am King Sean John, and the new DKNY Men partially offset these declines.

Fragrance posted an operating loss compared with operating income last year. The decrease primarily reflected the lower sales, partially offset by a reduction in selling, advertising, merchandising and sampling spending.

Hair Care

The sales decline in hair care was primarily a result of a soft salon retail environment and a reduction in points of distribution in the United States.

Net sales were also negatively impacted as a result of the conclusion of a hotel amenities program in the third quarter of fiscal 2008.

Partially offsetting these declines were incremental sales of new products, such as Dry Remedy Shampoo and Conditioner and the Sun Care line of products from Aveda. The category also benefited from improved sales of hair color products and an increase in points of distribution outside the United States, including the acquisition of an independent distributor in Australia.

Hair care sales increased in constant currency in the Company's international regions.

Hair care operating income decreased, primarily reflecting the decline in sales.