For the first quarter, the Company had net sales of $1.83 billion, a 4% decrease compared with $1.90 billion reported in the prior-year period. Excluding the impact of foreign currency translation, net sales decreased slightly from the year-ago period. The Company reported net earnings, including charges associated with restructuring activities, for the quarter ended September 30, 2009 of $140.7 million, compared with $51.1 million last year. Diluted net earnings per common share for the quarter rose to $.71, compared with $.26 reported in the prior year. All mention of net earnings in the body of this press release refers to net earnings attributable to The Estée Lauder Companies Inc., which reflects the adjustment for noncontrolling interests.

The fiscal 2010 first quarter results included returns and charges associated with restructuring activities of $42.3 million ($27.3 million after-tax), equal to $.14 per diluted common share. Excluding these returns and charges, net sales for the quarter ended September 30, 2009 were $1.85 billion, net earnings increased to $168.0 million and diluted net earnings per share rose to $.85. A reconciliation between GAAP and non-GAAP financial measures is included in this press release. In connection with its long-term strategic plan, as well as certain on going initiatives, the Company realized savings of approximately $48 million during the quarter.

The Company's business in each of its product categories and geographic regions continued to be affected by challenging and volatile economic conditions. Despite these conditions, the Company was able to outperform its original expectations because of better-than-anticipated sales and lower spending levels in each of the Company's product categories and geographic regions. The better-than-anticipated sales stemmed, in part, from strong sell-in of higher-margin product launches, greater passenger traffic in the Company's travel retail business and improved foreign currency translation. The lower spending reflects caution in many of the Company's businesses given the extent of the global economic downturn and the potential risks in the near term.

Fabrizio Freda, President and Chief Executive Officer, said, "Our strong performance this quarter is an encouraging start to our fiscal year and to achieving our long-term strategy and financial goals. We capitalized on our solid pipeline of innovative products, initial improvements in certain areas of our business and increased cost discipline, which led to a significant improvement in operating margin. We believe we gained share globally in much of our distribution this quarter.

"While satisfying, these strong results should not mask the challenges and uncertainties we still see in the global economic environment. Additionally, we are at the beginning of our four-year strategic plan, which involves significant cultural changes and multiple initiatives, and we still have a lot of work ahead to achieve our goals. However, we will continue to focus on opportunities that are in our control, namely reducing our cost structure and building our brands. We are a company with strengths in creativity and innovation, and we will accelerate our investment in these areas throughout the year to maximize their potential and gain share. With the year beginning on solid footing and having confidence in our business for the balance of the fiscal year, we are raising our full year earnings per share estimate to $1.95 to $2.10."

                                                                                                                                                           
                                                                                                                                                           
 Results by Product Category                                                                                                                               
                                                                Three Months Ended September 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                                                      $  730.3        $  716.8     1.9    %    5.0    %     $  114.3      $  43.5      100.0+  % 
 Makeup                                                            717.9           742.9     (3.4   )    (0.8   )        107.8         54.4      98.2      
 Fragrance                                                         291.5           327.8     (11.1  )    (8.0   )        28.2          (5.5  )   100.0+    
 Hair Care                                                         97.9            98.8      (0.9   )    0.9             9.6           (1.0  )   100.0+    
 Other                                                             14.3            17.2      (16.9  )    (15.1  )        2.8           1.2       100.0+    
 Subtotal                                                          1,851.9         1,903.5   (2.7   )    0.1             262.7         92.6      100.0+    
 Returns and charges associated with restructuring activities      (18.5    )   -                                        (42.3  )      (0.1  )             
 Total                                                          $  1,833.4      $  1,903.5   (3.7   )%   (0.8   )%    $  220.4      $  92.5      100.0+  % 
                                                                                                                                                           
                                                                                                                                                           


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All product categories benefited from Company-wide cost containment initiatives and a more measured approach to spending, as well as strict inventory management, resulting in significant improvements in operating income.

Skin Care

The skin care category is a strategic priority for the Company. Net sales in this category increased, despite the difficult comparison to the prior year when skin care sales rose strong double-digits. In local currency, net sales in Asia/Pacific grew double-digits, while Europe, the Middle East & Africa had a solid high-single-digit gain. Skin care sales in the Americas decreased slightly.

The Company gained share in this category during the quarter in U.S. prestige department stores and in certain countries in stores where its products are sold.

Across each region, the strong sell-in of Advanced Night Repair Synchronized Recovery Complex and the recent launches of the Time Zone line of moisturizing products by Estée Lauder, as well as Youth Surge SPF 15 Age Decelerating Moisturizer from Clinique, contributed incremental sales. These sales gains were partially offset by lower sales from other existing products.

Operating income was substantially higher, primarily reflecting improved results from certain of the Company's heritage brands, driven by increased sales from new higher-margin launches.

Makeup

Makeup net sales increased strong double-digits in Asia/Pacific but were more than offset by declines in the Company's other regions.

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. The declines reflected a difficult comparison to the prior-year period which featured a greater number of launches and when sales increased double -- digits. Makeup artist brands collectively reported a moderate global sales increase during the quarter, driven by their international businesses.

The lower makeup sales reflected declines across a broad range of products. However, these declines were partly mitigated by the recent launches of Even Better Makeup SPF 15 and Superbalanced Powder Makeup SPF 15 from Clinique, as well as Double Wear Stay-in-Place Lip and Eye Pencils by Estée Lauder.

Operating income increased, primarily due to improvements at certain of the Company's heritage brands and its makeup artist brands.

Fragrance

The Company's priority in this category is profitability improvement. During the quarter, the Company continued to face challenges in this product category, due in part to the continued economic downturn, coupled with competitive dynamics. As a result, fragrance sales declined in each region.

The decline reflected lower sales of DKNY Delicious Night and Estée Lauder Sensuous, both of which were launched in the prior-year period. Also contributing to the decrease were lower sales of certain Sean John and Clinique fragrances.

The recent successful launches of DKNY Be Delicious Fresh Blossom and Very Hollywood Michael Kors partially offset these declines.

Fragrance posted operating income compared with an operating loss last year. The improvement primarily reflected a favorable comparison to the prior-year period's support spending behind launches.

Hair Care

In local currency, sales increased in the Asia/Pacific region. Increased sales of certain styling and hair color products and sales generated from direct-response television programs were partially offset by a soft salon retail environment in the United States.

On a reported basis, sales decreased, reflecting the impact of foreign currency translation.

Hair care recorded operating income in the current quarter compared with an operating loss last year, primarily reflecting savings generated from cost containment initiatives.

                                                                                                                                                         
                                                                                                                                                         
 Results by Geographic Region                                                                                                                            
                                                                Three Months Ended September 30                                                          
                                                                                                                    Operating                  Percent   
 (Unaudited; Dollars in millions)                               Net Sales                    Percent Change         Income (Loss)              Change    
                                                                                             Reported   Local                                  Reported  
                                                                2009            2008         Basis      Currency    2009          2008         Basis     
                                                                                                                                                         
 The Americas                                                   $  892.3        $  939.0     (5.0  )%   (4.1  )%    $  113.9      $  56.5      100.0+  % 
 Europe, the Middle East & Africa                                  601.9           641.5     (6.2  )    0.2            93.3          7.6       100.0+    
 Asia/Pacific                                                      357.7           323.0     10.7       12.4           55.5          28.5      94.7      
 Subtotal                                                          1,851.9         1,903.5   (2.7  )    0.1            262.7         92.6      100.0+    
 Returns and charges associated with restructuring activities      (18.5    )   -                                      (42.3  )      (0.1  )             
 Total                                                          $  1,833.4      $  1,903.5   (3.7  )%   (0.8  )%    $  220.4      $  92.5      100.0+  % 
                                                                                                                                                         
                                                                                                                                                         


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The Americas

Sales decreased in all product categories for the quarter, while most of the Company's brands in the United States recorded lower net sales. The economic conditions in this region, particularly in the department store channel, have negatively impacted the Company's results.

Lower store traffic and cautious consumer spending contributed to the weak retail environment. Sales in the Company's freestanding stores also declined, while results in other alternative channels were mixed. Sales in the Company's Internet business contributed very positively.

During the quarter, the Company gained share in the U.S. prestige department store channel.

In local currency, sales in Canada and Latin America increased, while on a reported basis both reflected the adverse impact of the stronger U.S. dollar.

Ongoing challenges faced by certain of the Company's department store customers in the U.S. may continue to affect net sales for the short and medium term.

Operating income in the Americas rose over 100%, driven by Company-wide cost containment initiatives and a more measured approach to spending, particularly from certain of the Company's heritage brands and its makeup artist brands. These positives were partially offset by lower sales experienced by the majority of the Company's businesses in the region as described above.

Europe, the Middle East & Africa

In constant currency, double-digit growth was recorded in a number of countries, with the largest gains coming in Central Europe, Russia and the Middle East, while the United Kingdom posted solid sales gains. These gains were offset by sales declines in Spain, the Balkans and Italy.

Much of the region continued to be affected by weak economic conditions and further, yet more limited, retailer destocking.

The Company's travel retail business reflects a slowdown in global airline passenger traffic compared with the prior-year period, however, the extent of the slowdown was less than the Company anticipated.