雅詩蘭黛 (EL) 2003 Q4 法說會逐字稿

Good day, everyone and welcome to the Estee Lauder Companies fiscal 2003 fourth quarter and year end conference call. All participants have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation. Today's call is being recorded and web cast. For opening remarks and introductions I would like to turn the call over to the Vice President of Investor Relations, Mr. Dennis D'Andrea. Please go ahead.

大家好，歡迎參加雅詩蘭黛公司 2003 財年第四季和年終電話會議。所有參與者均處於只聽模式，演講結束後將開放提問和評論。今天的電話會議正在錄音並進行網路直播。對於開場白和介紹，我想將電話轉給投資者關係副總裁 Dennis D'Andrea 先生。請繼續。

Good morning, everyone. And thank you for joining us. On the call today are Fred Langhammer, President and Chief Executive Officer, William Lauder, Chief Operating Officer and Rick Kunes, Vice President and Chief Financial Officer. Some of our remarks today contain forward-looking statements and actual results could differ from those we expect. In addition to risks described on this call you'll find additional factors that could cause actual results to differ materially from these forward-looking statements in our press release today and in our latest 10-Q. Our GAAP results for fiscal 2003 issued this morning include a special fourth quarter charge related to our previously announced pending settlement of a class action lawsuit brought against a number of defendants including the company. Our GAAP results for fiscal 2002 reflect a change in accounting principal in the first quarter and restructuring charges taken in the fourth quarter. Rick will describe these in more detail later in our call but for ease of comparison, our discussion today will focus on our results, excluding the effects of the charges. Let me refer to you our press release today furnished to the SEC on form 8-K and also posted on our web site. There you will find a reconciliation of our results before and after the special charges. And I will turn the call over to Fred now.

大家，早安。感謝您加入我們。今天參加電話會議的包括總裁兼執行長 Fred Langhammer、營運長 William Lauder 和副總裁兼財務長 Rick Kunes。我們今天的一些言論包含前瞻性陳述，實際結果可能與我們的預期有所不同。除了本次電話會議中所述的風險之外，您還會發現其他因素可能導致實際結果與我們今天的新聞稿和最新的 10-Q 中的前瞻性陳述有重大差異。我們今天早上發布的 2003 財年 GAAP 業績包括一項第四季度特別費用，該費用與我們先前宣布的針對包括該公司在內的許多被告提起的集體訴訟的懸而未決的和解有關。我們 2002 財年的 GAAP 結果反映了第一季會計原則的變化以及第四季度採取的重組費用。里克將在稍後的電話會議中更詳細地描述這些內容，但為了便於比較，我們今天的討論將集中於我們的結果，不包括指控的影響。讓我向您介紹我們今天以 8-K 表格形式向 SEC 提供的新聞稿，該新聞稿也發佈在我們的網站上。在那裡您可以找到我們在特殊收費之前和之後的結果的調節表。我現在將把電話轉給弗雷德。

Thank you, Dennis. Good morning, ladies and gentlemen. And thank you for joining us today to review our fiscal 2003 results, and to also review our expectations for fiscal 2004. I'm very pleased that our solid second half results capped off a strong annual performance this year. In light of our expectations, we reported a net sales increase of 8% to 5.12 billion from 4.74 billion in fiscal 2002. Excluding the impact of foreign currency translation, net sales rose 4%. We delivered earnings towards the high end of our initial forecast, despite the soft retail climate in the U.S. and certain other major markets. Diluted earnings per share came in at $1.32 an increase of 20% compared to the $1.10 last year. Let me briefly recap a few highlights of the year. We exceeded $5 billion in sales for the first time in our history. A milestone we're very excited about and we're proud to have achieved that. We achieved the $35 million in restructuring benefits, an additional 25 million of supply chain cost savings we outlined in the beginning of the year, while refocusing the SG&A to our business building activities. We held our first analyst conference to introduce our management team and keep you abreast of our strategic direction and five-year financial goals. During the year, we announced some management changes starting with William Lauder, assuming the role of Chief Operating Officer overseeing the company's day to day operations. Additionally, to draw on a depth of the strength of our management team we appointed Phillip Shearer, Group President for Clinique Origins online division and Cedric Prouve as Group President for International. We also strengthened our board with the appointment of Rosemary Bravo, Chief Executive Officer of Burberry who brings extensive experience in retail luxury goods. The Estee Lauder brand expanded it's global advertising campaign with the addition of supermodel Lyia Kebede. Similarly, Aramis added tennis star Andre Agassi to their team of spokesperson for the new fragrance Aramis Life. We also expanded our brand portfolio with the addition of two brands. During the year, we acquired Darphin, which markets high-end skin care products in top tier independent pharmacies in Europe, and we entered into a license agreement to develop and market products under the Michael Kors brand name. And travel retail recovered nicely from the year-ago levels, despite the conflict in Iraq and SARS which hampered the fourth quarter results. With that brief update let's review our full year results. In line with our plans, discussed with you at the beginning of the year, we have seen momentum increase throughout the year. As our brand building investment strategies and cost savings initiative came to fruition. Sales again grew in all of the geographic regions and product categories, despite uncertainty around the world. Our international business remains strong, with Europe and Asia growing 19 and 8% respectively, including the positive effects of changes in foreign exchange rates. While the Americas grew this year, negative consumer sentiment resulted in a weak retail environment in the U.S. Net earnings for fiscal 2003 were $333.3 million, a 15% increase over the 289.4 million last year, before an accounting change. This growth reflects strong gross margin improvement, as well as productivity gains and selling expenses, and the benefits of the restructuring of prior year. At the same time, we invested more in advertising, sampling and merchandising. All product categories had growth this year. In skin care reported sales increased 11% to $1.89 billion, and grew a strong 7% in constant dollars. We had some great introductions this year, including Clinique's Repair Wear, and Advanced Stop Signs, Estee Lauder Perfectionist and Resilience List Overnight, and Origins Perfect World line of products continue to perform well. Makeup, sales increased 7% to 1.91 billion in dollars and rose 4% in local currency. Particularly noteworthy is the strong double digit growth of Mac and Bobby Brown. Mac continues to be our fastest growing brand. New products continue to be a critical strategy to recruit new customers to our brands. Exciting new products this year include Magnascopic mascara from Estee Lauder and Color Surge lipstick from Clinique. Fragrance had some bright spots this year as well. Our fragrance business increased 4% to 1.06 billion on a reported basis, was even with last year's, excluding currency. This category was positively affected by the rebound in the travel retail channel throughout most of the fiscal year. From an industry standpoint, the fragrance category continues to significantly lag skin care and makeup growth, in all channels of distribution. Hair care rose 6% this year to 228.9 million. Both of Aveda and Bumble & Bumble our major hair care brands continue to make substantial progress in their product development and salon distribution refinement. In Aveda we're seeing strong growth both domestically and international markets, owing to new products and a sharp focus on Concept Salons and other high performing salons. The brand added 60 retail stores while strategically decreasing the number of nonconcept salons that offer Aveda products. Bumble & Bumble's growth reflect the positive influence of product education offered to salons and increased distribution. These areas were particularly partially offset by lower sales of Clinique hair care products. On a geographic basis, in the Americas region, sales increased 3% from prior year to 2.95 billion. Throughout the year, store traffic continued to be soft. During the year, we increased spending behind advertising and sampling and instore events to help drive business, build momentum and support our brands. I do feel better about recent trends. Our June and July retail sell through in department stores improved in the mid single digit increases. And we're also seeing our onstore sales doing very well with the mid teen increases over this period. It is worth noting that the growth in prestigious business industry in cosmetics, in the U.S. for fiscal out based, based on the AC Nielsen's mass universe in our three major product categories by about 6 percentage points. In other words, 6 percentage points better performance in the prestige sector than in the mass sector. In this region, we have sales increases across each product category except fragrance. Virtually all developing brands have growth, with most posting double digit sales increases. Additionally, our own retail stores grew double digits and our Internet business jumped 44% for the year. Europe, the Middle East, and Africa continued to grow at a brisk pace. Net sales increased 19% over prior year, to 1.51 billion. An increase on an impressive 8% on a local currency basis. Our travel retail business rebounded strongly this year contributing to the region's local currency growth with a 10% increase over prior year, which was depressed by a reduced travel volume. While we were encouraged by the recovery in travel retail, the Iraq war and SARS tempered the business in the fourth quarter. Our business again was very strong in most markets particularly the U.K., Spain, Greece, Switzerland and South Africa. Virtually all of our developing brands in Europe turned in strong double digit growth while Estee Lauder and Clinique reported growth in the high single digits. In fact, the Estee Lauder and Clinique brands are now in makeup ranking two and three in the European market. In Asia Pacific, net sales grew 8% over prior year, to 657.8 million. In local currency, sales were up 3%. We had strong double digit sales increases in local currency in Korea, Thailand, China, and Taiwan also posted strong gains. In Japan, sales in local currency edged down about 1% for the year, although we experienced very positive results from the Estee Lauder brand, which turned in mid single digit growth. With 2003 behind us, let's look to fiscal 2004. In our five-year business plan, presented last September, we outlined an operating margin target of 13 to 13 1/2% and I am pleased to report that we are on track to achieve this goal as we enter the second year. To start off, let me first talk about sales. We expect sales growth in the fiscal year '04 between 7-8% on a reported basis, which translates into 6-7 on a constant currency basis. As I said earlier, recent trends in the U.S. are encouraging, our travel retail business is continuing to recover, and we expect Europe and Asia to continue to perform well. We will continue to pursue strategies that have successfully driven growth, including product innovation, effective marketing, geographic expansion, and distribution diversification. And I would like to comment on a few of our plans for this year that support these strategies. In product innovation, a deep commitment to break through innovation and product leadership will continue to be a priority throughout fiscal 2004. We expect hair care and fragrance to lead the growth, followed by skin care and makeup. Aveda just launched Color Current hair color and has a styling mist coming out next month. Bumble & Bumble has a six SKU line called Curl Conscious rolling out later this fall, the first to address the special needs of curly hair. The our new product offerings along with continued focus on salon refinement and stylist education will drive this up and coming category. We have exciting new launches in fragrance that we feel very good about. Starting with Beyond Paradise from Estee Lauder, which is on counter this month. This fragrance will be a catalyst for an entirely new generation of consumers to join the Estee Lauder brand and is expected to be the brand's biggest launch since Pleasure. Clinique's newest scent called Simply is set to launch in the United States next month. These will be followed by Aramis Life an exciting fragrance inspired by Andre Agassi reflecting his drive and positive attitude that will roll out globally in October. This slate of new products is expected to produce solid growth for us in this category fiscal 2004 and give us new dynamic momentum in the travel retail world. We will strengthen our leadership in the skin care category, with notable new products from Estee Lauder. Idealistic microed to Clinique's line of Unique Pore Minimizer products. Origins will expand on it's popular perfect World Line and benefit from a full year of sales of Star Font. Lastly, in makeup we have dynamic brands with full product lineups. Mac has new seasonal collection including the Liza collection featuring Liza Minnelli. Estee Lauder will add to the Pure Color franchise and also launch a new foundation called Ideal Mat in October. Overall we will launch new mascaras, new foundations, exciting color pallets for many of our brands. Regarding marketing, we're committed to driving our new product innovation with strong advertising support which has proven to be a successful formula. Investing in our products to drive sales momentum and to ensure their success has been a strategic focus. And fiscal '04 will not be different. This strategy has enabled us to achieve positive results in the Estee Lauder brands, comprehensive modernization with new spokes models and ad campaigns. In this coming year to build their leadership position we will support Clinique around the globe with effective advertising that emphasizes newness and we will also increase investment behind the expansion of our developing brands to continue their momentum. As we have done in the past year, we remain focused more on advertising and other programs to build brand equity. Now to geographic regions. In fiscal '04, we expect each region to contribute to growth and each region to improve its profitability. The Europe, Middle East, and Africa region is expected to remain strong in lead growth as most of our affiliate markets continue their momentum. In travel retail we anticipate continued recovery throughout the year barring any unforeseen events. In the Americas, we expect consumer sentiment and spending to improve, with all of our brands projecting full-year sales growth. Asia Pacific is also expected to deliver solid growth this year with markets like Korea continuing on a strong pace. While the continued economic weakness in Japan will temper our results there, we anticipate low single digit growth in Japan owing to expansion of developing brands and new product activity. There are key opportunities geographically in markets like China and Russia where prestige cosmetics are desired and appropriate distribution for our brands are evolving. Over the last 18 months, we have established affiliates in both of these markets and are very optimistic about the opportunities. Also expansion plans continue for our developing brands. For example, Aveda is launching next month in Tokyo with an exciting new holistic center, a combination of retail stores, spa and training institute. All of our developing brands will focus on strengthening and expanding their presence in recent entered markets. Looking at distribution channel diversification, as consumers have become multichannel shoppers, we have evolved into a multichannel marketer and now operate in prestige department stores, perfumeries, retail store, salons, travel retail, pharmacies, and Internet and have our toe in the water en masse. In view of the changing consumer shopping habits, we are embarking on a new strategy to size opportunities in alternate distribution channels. We are in the process of developing a number of brands that will allow us to capitalize on these opportunities around the globe and we're very excited about the strategy. This strategy calls for a meaningful investment during the development phase and we have set aside funds in our fiscal '04 plan. We have established a new division that is working on ideas and concepts and bringing them to market. We will have some more specific announcements about this at a later date. Additionally, we continue to look for opportunistic acquisitions. We're interested in complimentary businesses that further strengthen our leadership position geographically, by category or through various distribution channels. We believe these strategies to grow sales are clear, attainable, and support our long-term financial goals. Now let me shift to profitability. Our focus to drive strong top line growth is the best road map to consistently drive bottom line growth. That being said, there are clearly additional productivity gains available in all operating units, and our supply chain, which will not only help fund our brand building activity but generate margin improvements. Our supply chain initiatives described to you last September have resulted in cost savings and are well on track to meet the 75% gross margin goal we established. In operating expenses, we will continue to drive efficiencies and cost savings in our selling expenses and all non sales-related activities. At the same time, we are investing in future growth and will continue to be aggressive in our advertising and R&D spending. Our strategy, strategic new business development initiatives will require incremental investment in fiscal 2004 before we begin to see the benefits accrue in fiscal 2005. Ensuring our company maintains leadership in the industry with the best brands, and the most dynamic channels, is sound strategy. With this combination of sales growth, expense savings, and incremental investment, we estimate that fiscal 2004 diluted earnings per share in the range of $1.45 to $1.50. I am very pleased with our performance in fiscal 2003 and I'm confident in our prospects for the coming year. Driving consistent growth year over year, building brand equity, and increased shareholder value remains our core objective. Now, I would like to hand it over to Richard Kunes to give you more specifics.

謝謝你，丹尼斯。早安，女士們，先生們。感謝您今天加入我們，回顧我們 2003 財年的業績，並回顧我們對 2004 財年的預期。我很高興我們下半年的穩健業績為今年強勁的年度業績畫上了圓滿的句號。根據我們的預期，我們報告淨銷售額從 2002 財年的 47.4 億美元成長了 8%，達到 51.2 億美元。剔除外幣換算的影響，淨銷售額成長4%。儘管美國和其他某些主要市場的零售環境疲軟，但我們的獲利仍接近最初預測的上限。稀釋後每股收益為 1.32 美元，比去年的 1.10 美元增加了 20%。讓我簡單回顧一下今年的一些亮點。我們的銷售額史上首次突破 50 億美元。我們對這一里程碑感到非常興奮，並為實現這一目標感到自豪。我們實現了 3500 萬美元的重組效益，我們在年初概述了另外 2500 萬美元的供應鏈成本節省，同時將 SG&A 重新聚焦於我們的業務建設活動。我們舉行了第一次分析師會議，介紹我們的管理團隊，並讓您了解我們的策略方向和五年財務目標。在這一年中，我們宣布了一些管理層變動，從 William Lauder 開始，他擔任首席營運官，負責監督公司的日常營運。此外，為了充分發揮我們管理團隊的實力，我們任命 Phillip Shearer 為 Clinique Origins 線上部門集團總裁，Cedric Prouve 為國際集團總裁。我們還任命了 Burberry 執行長 Rosemary Bravo 來加強我們的董事會，她在奢侈品零售方面擁有豐富的經驗。雅詩蘭黛品牌透過超級名模 Lyia Kebede 的加盟擴大了其全球廣告活動。同樣，Aramis 將網球明星安德烈·阿加西 (Andre Agassi) 納入其新香水 Aramis Life 的代言人團隊中。我們也透過增加兩個品牌來擴大我們的品牌組合。年內，我們收購了在歐洲頂級獨立藥局銷售高端護膚品的Darphin，並簽訂了一項授權協議，以開發和行銷Michael Kors品牌的產品。儘管伊拉克衝突和非典影響了第四季的業績，但旅遊零售業仍較去年同期恢復良好。透過這個簡短的更新，讓我們回顧一下我們的全年業績。根據我們在年初與您討論的計劃，我們看到全年的勢頭有所增強。隨著我們的品牌建立投資策略和成本節約計畫取得成果。儘管世界各地存在不確定性，但所有地理區域和產品類別的銷售額再次成長。我們的國際業務依然強勁，歐洲和亞洲分別成長了 19% 和 8%，其中包括外匯匯率變動的正面影響。儘管美洲地區今年有所成長，但消費者信心不佳導緻美國零售環境疲軟。2003 財年的淨利為 3.333 億美元，比去年會計變更前的 2.894 億美元成長了 15%。這一成長反映了毛利率的強勁改善、生產力的提高和銷售費用以及上一年重組的好處。同時，我們在廣告、樣品和推銷方面投入了更多資金。今年所有產品類別都有成長。保養品銷售額成長 11%，達到 18.9 億美元，以不變美元計算，銷售額強勁成長 7%。今年我們推出了一些出色的產品，包括倩碧的 Repair Wear 和 Advanced Stop Signs、雅詩蘭黛 Perfectionist 和 Resilience List Overnight，以及 Origins Perfect World 系列產品繼續表現良好。彩妝銷售額成長 7%，達到 19.1 億美元，以當地貨幣計算成長 4%。特別值得注意的是 Mac 和 Bobby Brown 的強勁兩位數成長。Mac 仍然是我們成長最快的品牌。新產品仍然是我們品牌吸引新客戶的關鍵策略。今年令人興奮的新產品包括雅詩蘭黛 (Estee Lauder) 的 Magnasensitive 睫毛膏和倩碧 (Clinique) 的 Color Surge 唇膏。今年的香水也有一些亮點。據報道，我們的香水業務成長了 4%，達到 10.6 億美元，與去年持平（不包括貨幣）。該類別在本財年的大部分時間都受到旅遊零售通路反彈的正面影響。從行業角度來看，在所有分銷管道中，香水類別的成長仍然明顯落後於護膚品和化妝品的成長。護髮產品今年成長了 6%，達到 2.289 億件。我們的主要護髮品牌 Aveda 和 Bumble & Bumble 在產品開發和沙龍分銷細化方面繼續取得實質進展。在 Aveda，由於新產品以及對概念沙龍和其他高績效沙龍的高度關注，我們看到國內和國際市場的強勁成長。該品牌增加了 60 家零售店，同時策略性地減少了提供 Aveda 產品的非概念沙龍的數量。Bumble & Bumble 的成長反映了為沙龍提供的產品教育和分銷增加的正面影響。這些領域尤其被倩碧護髮產品銷售下降所抵銷。從地理來看，美洲地區的銷售額較前一年成長 3%，達到 29.5 億美元。全年，商店客流量持續疲軟。在這一年裡，我們增加了廣告、樣品和店內活動的支出，以幫助推動業務、建立動力並支持我們的品牌。我確實對最近的趨勢感覺更好。我們 6 月和 7 月百貨公司的零售額有中等個位數成長。我們也看到，我們的店內銷售表現非常好，在此期間出現了十幾歲的成長。值得注意的是，化妝品產業的成長，在美國以財政支出為基礎，基於AC尼爾森的大眾宇宙在我們的三大產品類別中成長了約6個百分點。換句話說，高端領域的表現比大眾領域高出 6 個百分點。在該地區，除香水外，我們每個產品類別的銷售額都有所增長。幾乎所有發展中品牌都實現了成長，其中大多數品牌的銷售額成長了兩位數。此外，我們自己的零售店今年實現了兩位數成長，網路業務成長了 44%。歐洲、中東和非洲持續快速成長。淨銷售額比上年增長 19%，達到 15.1 億美元。以當地貨幣計算，增幅高達 8%，令人印象深刻。我們的旅遊零售業務今年強勁反彈，為該地區的當地貨幣成長做出了貢獻，較上年增長了 10%，而該地區的旅遊量因旅遊量減少而受到抑制。雖然我們對旅遊零售業的復甦感到鼓舞，但伊拉克戰爭和非典影響了第四季的業務。我們的業務在大多數市場再次表現強勁，尤其是英國、西班牙、希臘、瑞士和南非。事實上，我們在歐洲的所有發展中品牌都實現了強勁的兩位數成長，而雅詩蘭黛和倩碧則實現了高個位數的成長。事實上，雅詩蘭黛和倩碧品牌目前在歐洲市場化妝品排名中排名第二和第三。在亞太地區，淨銷售額比上年成長 8%，達到 6.578 億美元。以當地貨幣計算，銷售額成長了 3%。以當地貨幣計算，我們在韓國、泰國、中國和台灣的銷售額實現了強勁的兩位數增長，台灣地區也實現了強勁增長。在日本，儘管雅詩蘭黛品牌取得了非常積極的業績，實現了中等個位數的成長，但以當地貨幣計算的銷售額今年小幅下降了約 1%。2003 年已經過去，讓我們展望 2004 財年。在去年 9 月提出的五年業務計劃中，我們概述了 13 至 13 1/2% 的營業利潤率目標，我很高興地報告，隨著進入第二年，我們有望實現這一目標。首先，讓我先談談銷售。我們預期 04 財年的銷售額成長在報告基礎上為 7-8%，以固定匯率計算為 6-7%。正如我之前所說，美國近期的趨勢令人鼓舞，我們的旅遊零售業務正在持續復甦，我們預計歐洲和亞洲將繼續表現良好。我們將持續推行成功推動成長的策略，包括產品創新、有效行銷、地理擴張和分銷多元化。我想評論一下我們今年支持這些策略的一些計劃。在產品創新方面，對突破性創新和產品領先地位的堅定承諾將繼續成為整個 2004 財年的首要任務。我們預計護髮和香水將引領成長，其次是護膚和彩妝。Aveda 剛剛推出了 Color Current 染髮劑，並在下個月推出了造型噴霧。Bumble & Bumble 有 6 個 SKU 系列，名為 Curl Conscious，將於今年秋天晚些時候推出，這是第一個滿足捲髮特殊需求的系列。我們的新產品以及對沙龍精緻和造型師教育的持續關注將推動這一新興類別的發展。我們推出了令人興奮的新香水，我們對此感到非常滿意。首先是雅詩蘭黛的 Beyond Paradise，該產品本月上市。這款香水將成為全新一代消費者加入雅詩蘭黛品牌的催化劑，預計將成為該品牌自 Pleasure 以來最大規模的推出。倩碧最新的香水「Simply」將於下個月在美國上市。緊隨其後的是 Aramis Life，一款令人興奮的香水，靈感來自安德烈·阿加西 (Andre Agassi)，反映了他的干勁和積極態度，將於 10 月在全球推出。預計這一系列新產品將在 2004 財年為我們的此類產品帶來穩健的成長，並為我們的旅遊零售領域帶來新的活力。我們將透過雅詩蘭黛的著名新產品加強我們在護膚品領域的領導地位。Idealistic 是對倩碧獨特毛孔縮小產品系列的微化處理。Origins 將擴展其廣受歡迎的完美 World Line，並受益於 Star Font 的全年銷售。最後，在彩妝領域，我們擁有充滿活力的品牌和完整的產品陣容。Mac 推出了新的季節性系列，其中包括由 Liza Minnelli 主演的 Liza 系列。雅詩蘭黛 (Estee Lauder) 將在 Pure Color 系列中增添新產品，並於 10 月推出一款名為 Ideal Mat 的新粉底。總的來說，我們將為我們的許多品牌推出新的睫毛膏、新的粉底和令人興奮的調色板。在行銷方面，我們致力於透過強大的廣告支援來推動我們的新產品創新，這已被證明是一個成功的公式。投資我們的產品以推動銷售動能並確保其成功一直是我們的策略重點。04 財年也不會有所不同。這項策略使我們在雅詩蘭黛品牌、新代言模型和廣告活動的全面現代化方面取得了積極成果。在來年，為了建立他們的領導地位，我們將透過強調新穎性的有效廣告在全球範圍內支持倩碧，我們還將增加對我們發展中品牌擴張的投資，以繼續其發展勢頭。正如我們去年所做的那樣，我們仍然更加關注廣告和其他旨在建立品牌資產的計劃。現在到地理區域。在 04 財年，我們預計每個地區都會為成長做出貢獻，每個地區都會提高其獲利能力。隨著我們大多數聯盟行銷市場持續保持成長勢頭，預計歐洲、中東和非洲地區的領先成長將保持強勁。除非發生任何不可預見的事件，我們預計旅遊零售業將全年持續復甦。在美洲，我們預期消費者信心和支出將會改善，我們所有品牌都預期全年銷售額將會成長。預計亞太地區今年也將穩健成長，韓國等市場將持續強勁成長。雖然日本持續的經濟疲軟將影響我們的業績，但由於發展品牌和新產品活動的擴張，我們預期日本的成長將呈現低個位數成長。中國和俄羅斯等市場存在著重要的地理機遇，這些市場需要高檔化妝品，而我們品牌的適當分銷正在不斷發展。在過去 18 個月中，我們在這兩個市場都建立了附屬公司，並對這些機會感到非常樂觀。我們的發展品牌的擴張計劃也持續進行。例如，Aveda 將於下個月在東京推出一個令人興奮的新整體中心，該中心結合了零售店、水療中心和培訓機構。我們所有發展中的品牌都將專注於加強和擴大其在最近進入的市場中的影響力。就分銷管道多元化而言，隨著消費者已成為多通路購物者，我們已發展成為多通路行銷商，目前在知名百貨公司、香水店、零售店、沙龍、旅遊零售、藥局和網路領域開展業務，並涉足水領域。群眾。鑑於消費者購物習慣不斷變化，我們正在實施一項新策略，以尋找替代分銷管道的機會。我們正在開發多個品牌，這將使我們能夠利用全球範圍內的這些機會，我們對這項策略感到非常興奮。該策略要求在開發階段進行有意義的投資，我們已在 04 財年計劃中預留了資金。我們成立了一個新部門，致力於研究想法和概念並將其推向市場。我們稍後將就此發布一些更具體的公告。此外，我們繼續尋找機會性收購。我們對能夠進一步加強我們在地理、類別或透過各種分銷管道的領導地位的互補業務感興趣。我們相信這些增加銷售額的策略是明確的、可實現的，並且支持我們的長期財務目標。現在讓我轉向獲利能力。我們專注於推動強勁的營收成長，這是持續推動獲利成長的最佳路線圖。話雖這麼說，所有營運部門和我們的供應鏈顯然都可以提高生產力，這不僅有助於為我們的品牌建立活動提供資金，還可以提高利潤率。我們去年 9 月向您描述的供應鏈計畫已經節省了成本，並且正在順利實現我們制定的 75% 毛利率目標。在營運費用方面，我們將繼續提高銷售費用和所有非銷售相關活動的效率並節省成本。同時，我們正在投資未來的成長，並將繼續積極投入廣告和研發支出。我們的策略、策略性新業務開發計畫將需要在 2004 財年增加投資，然後才能在 2005 財年開始看到收益。確保我們公司以最好的品牌和最具活力的管道保持行業領先地位是明智的策略。透過銷售成長、費用節省和增量投資的綜合作用，我們估計 2004 財年攤薄後的每股收益將在 1.45 美元至 1.50 美元之間。我對 2003 財年的業績非常滿意，對來年的前景充滿信心。逐年推動持續成長、建立品牌資產和增加股東價值仍然是我們的核心目標。現在，我想請 Richard Kunes 為您提供更多具體資訊。

Thank you Fred. And good morning, everyone. Let me begin with a few reported results. For the fiscal year, we reported net earnings of 319.8 million compared with 212.5 million last year before an accounting change. Reported diluted earnings per share were $1.26 versus 78 cents for the 12 months of last year, also before the accounting change, or 70 cents last year after the accounting change. In this year's fourth quarter, we recorded a special pretax charge of 22 million in connection with the pending settlement of a class action lawsuit against various defendants including the company. The charge was $13.5 million after tax equal to six cents per share. In last year's first quarter we recorded a change in accounting principle of 20.6 million, or 8 cents per share. And in last year's fourth quarter, we recorded a restructuring pretax charge of 117.4 million, which was 76.9 million after tax, equal to 32 cents per share. However, my discussions today is before the restructuring and special charges. We evaluate and view our business before these special charges for comparability of our operational performance. Now, let me give you a few fourth quarter highlights. For the fourth quarter, net sales rose to 1.22 billion an increase of 8% over the 1.13 billion reported in the prior year quarter. In constant currency, the company sales increased 3% during the quarter. Looking at fourth quarter sales by product category, skin care posted the highest percentage increase growing 14% to 485.1 million. Hair care sales rose 13% to 65.1 million while makeup increased 7% to 473.2 million. As anticipated, fragrance sales were lower this quarter, decreasing 5% to 195.2 million, due primarily to the lower sales in our troubled retail business and the continued overall weak fragrance business. On a regional basis, the Americas posted a slight increase in net sales in the fourth quarter, to 660.7 million. This is coming off a 9% increase in last year's fourth quarter. As a reminder, in last year's quarter, we stepped up advertising and promotional spending to build sales momentum. In Europe, the Middle East and Africa, reported sales rose 23% to 402.4 million while sales and local currency increased 7%. In Asia Pacific, sales on a reported basis were up 8% to 159.9 million and rose 3% in local currency for the quarter. Turning to our full fiscal year operating profitability the company achieved operating income of 517.1 million compared with 458.8 million reported last year. This reflects an increase in operating margin of 40 basis points to 10.1% due to a strong improvement in gross margin, combined with benefits from restructuring, and disciplined cost containment. Our gross margin of 73.9% for the fiscal year increased 70 basis points over last year's 73.2%. This increase reflects favorable supply chain initiative, lower promotional activities, the absence of the overhead absorption issue from the prior year and the favorable impact of foreign exchange rates. These improvements were partially offset by a change in our mix of business notably the recovery for most of the fiscal year of our travel retail and the related higher fragrance sales. Operating expenses as a percentage of sales for the full fiscal year increased 30 basis points to 63.8%. The operating expense improvements we experienced in our second and third quarters continued into the fourth quarter, reflecting planned restructuring savings, selling expense efficiencies and general cost containment. In particular in those areas which are nonsales generating. For the full year, these improvements were offset primarily by a higher level of advertising, sampling and merchandising as we continue to invest behind our brands. For the fiscal year, total advertising and promotional spending including the amounts reflected in both cost of sales and operating expenses was 1.43 billion versus 1.33 billion last year. As we said and done in the past we continue our commitment to support our top line growth and enhanced brand equity. Looking at operating profits by category for the full fiscal year, skin care rose 24.8 million, to 273.2 million, makeup increased 14.8 million to 198 million, and hair care was up 1.1 million to 14.8 million, reflecting higher sales, partially offset by continued advertising, sampling and merchandising costs, to promote new and recently launched products. Fragrance operating income more than doubled, increasing 18.7 million to 32.1 million, primarily due to improved results from our travel retail business. Turning to operating profits by region, the Americas increased 23.8 million, to 246.7 million. This increase was primarily due to higher sales and restructuring benefits, and other cost containment efforts, particularly as they relate to the manufacturing costs. This region's improvements reflect the impact of timing of some of our support spending, which was skewed towards the beginning of the fiscal year. In Europe, the Middle East and Africa, operating income in fiscal 2003 rose 47.8 million to 227.7 million, versus last year. With the United Kingdom and our travel retail business posting the most significant increase. As Fred mentioned our travel retail business, which has among the highest margins, saw a sharp recovery for most of the fiscal year against the backdrop of last year's negative events. Operating results also improved in a number of markets led by Spain, Italy and Greece. Asia Pacific operating and income decreased to 42.7 million, with higher operating income in Korea and Thailand being offset by a decline in Australia which benefited from a change in retail arrangements in the prior year, as well as lower results in Japan. Regarding our interest costs, we reported net interest expense of 8.1 million this fiscal year versus 9.8 million last year. This decrease is primarily due to lower outstanding borrowings, partially offset by a higher effective interest rate. The effective income tax rate for the year was 33.2% versus 34.5% in the prior year or 33% after the special charge we recorded in the fourth quarter. The improvement was primarily due to ongoing tax planning initiatives, including the favorable settlement of several tax negotiations, and the reduction of our overall tax rate related to our foreign operations. Before all special items in each year, net earnings for the fourth quarter increased 29%, to 66.5 million, compared with 51.5 million in the prior year. Diluted earnings per share for the quarter increased 38% to 26 cents from 19 cents in the prior year quarter. For the full year, net earnings rose 15% to 333.3 million, compared to 289.4 million in the prior year, while diluted earnings per share for the year increased 20% to $1.32 from $1.10 in the prior year. Regarding our financial position, the company's cash balance was $364 million at June 30, 2003, a decrease of 183 million versus last year. For the full year, we generated net cash from operating activities of 549 million, a 6% increase over the 518 million in the prior year period. A favorable change over the prior year period primarily reflects increased earnings and improvements in accounts receivable. Let me highlight some of our uses of cash this year. We returned 434 million to stockholders in the form of stock repurchases and dividends, 352 million was spent to repurchase approximately 11.2 million shares of stock under our share repurchase program, bringing the total shares repurchased under the program to 13.8 million. Dividend payments of 82 million were 11 million higher than last year, as a result of the change in our common stock dividend policy effective in January, from a quarterly to an annual basis. We reduced our debt levels by repaying our entire commercial paper balance which totaled 130 million. During the year, we made contributions to our US defined benefit plan, close to the maximum tax deductible amounts totaling $76 million which was 33 million more than last year. And we used 163 million of funds for capital expenditures, which was approximately 40 million lower than last year as we continued to tightly control our spending in light of economic conditions. While these items alone total approximately 800 million, we utilized our cash for other projects as well, including opportunistic acquisitions. Nevertheless, we still ended the year with 364 million of cash, maintaining the financial flexibility, and access to liquidity, required to take advantage of business opportunities as they arise. Let me now update you on our working capital. At June 30, 2003, inventory was 599 million an increase of 55 million versus June 30, 2002. Inventory days were 164 at June 30, 2003 versus 156 days at June 30, 2002. Our inventory days were impacted by the addition of Darphin and Michael Kors in the last quarter of our fiscal year. The year end strengthening of foreign currencies against the U.S. dollar, the negative impact of the war in Iraq and SARS had in our retail business and certain Asian markets and the somewhat higher level of planned launch activity in the first quarter of 2004 than last year. Regarding receivables, our DSOs of 47 days at June 30, 2003, improved from 50 days a year ago. And we improved all of our return ratios versus the previous year. As part of our ongoing capital structure and financing evaluation process, in March we filed a shelf registration statement with the SEC to sell debt securities in one or more offerings up to a total of 500 million. In May we took advantage of historically low interest rates and entered into a series of treasury lock agreements in anticipation of a bond issue. In May we also entered into an interest rate swap agreement to effectively convert fixed interest on our existing 6% senior notes to variable interest. We will keep you apprised of our financing activities as the year progresses. Let me now give you a few assumptions for fiscal 2004. For the full year, as Fred said, we anticipate reported sales growth of approximately 7-8% which includes approximately 1% of positive impact from foreign exchange. Sales and local currencies are forecast to grow 6-7%. We expect our gross margin to improve about 70-90 basis points for the fiscal year, with approximately half coming from ongoing supply chain savings and half from strategically lower promotional activities. We anticipate an increase in operating expenses of approximately 20-50 basis points. This is due to the investment in new business development that Fred mentioned of approximately 15 million dollars, strategically higher advertising, sampling and merchandising spending, and as I just mentioned, the shift of a portion of our marketing investments from promotional to advertising spending, which benefits our cost of sales but increases our operating expenses. These increases are expected to be partially offset by sales growth, tight cost controls in nonbusiness dealing areas, and the benefits of prior restructuring. Operating margin is estimated to increase 20-70 basis points. With regard to our U.S. pensions, within the appropriate rules and guidelines, we continue to take a conservative approach and are adjusting our discount rate to 5.75% from 7%, and our expected return on plan assets to 8% from 8.5%. In accordance with the new accounting rule, effective with our fiscal '04 first quarter, we will reclassify our 360 million of preferred stock to long-term debt. This has several effects. First, the related dividends will be treated as interest expense. Second, our effective tax rate will increase to compensate for the additional nontax deductible interest expense. And third, our debt to capital ratios will increase. These are cosmetic changes only to comply with the new accounting rule and do not change the fundamentals of the company, nor have any impact on EPS. You will see our net interest expense increase substantially in fiscal '04 due to the preferred stock reclassification, and potentially from the financing activities I mentioned. At this time, we expect our effective tax rate will be approximately 36% throughout fiscal 2004. This increase over fiscal '03 is due to the preferred stock reclassification, equal to 150 basis points, and the mix of global earnings. We anticipate a gradual economic recovery particularly in the U.S. In our first half, we are also continuing to increase advertising sampling and merchandising spending to support major launch activities, and to stimulate sales momentum as we enter the holiday season. This combination will result in lower first half earnings growth compared with our second half. We expect reported sales in this year's first half to grow between 8-9%, including approximately 2% positive impact of foreign exchange. In local currency, we anticipate sales to grow between 6-7%. Diluted earnings per share for the first half is expected in the range of 78-81 cents. And as Fred said earlier, for the full year, we anticipate diluted earnings per share of between $1.45 and $1.50. Lastly, I would like to briefly touch on the subject of sale of company stock by senior management. As you know, when we went public eight years ago, stock options were issued with a 10-year expiration. As we approach the 10-year mark, you will from time to time see senior management exercise and sell stock. This by no means diminishes our confidence in the company's ability to grow. In fact, the exercise of options and sell of stock over the next two years will create less volatility in the stock then if all options were exercised on or close to their expiration date. Remember, this is the first time options in the company stock are approaching their expiration date. That concludes my comments for today. We would be happy to take your questions now.

謝謝弗雷德。大家早安。讓我從一些報告的結果開始。在本財年，我們公佈的淨利潤為 3.198 億美元，而去年會計變更前的淨利潤為 2.125 億美元。報告的攤薄每股收益為 1.26 美元，而去年 12 個月（也在會計變更之前）為 78 美分，去年會計變更後為 70 美分。今年第四季度，我們記錄了 2,200 萬美元的特殊稅前費用，該費用與針對包括該公司在內的各被告的集體訴訟懸而未決的和解有關。稅後費用為 1,350 萬美元，相當於每股 6 美分。去年第一季度，我們記錄了 2,060 萬美元的會計原則變更，即每股 8 美分。去年第四季度，我們的稅前重組費用為 1.174 億美元，稅後為 7,690 萬美元，相當於每股 32 美分。不過，我今天的討論是在重整和特別收費之前。我們在這些特殊費用之前評估和查看我們的業務，以便我們的營運績效具有可比性。現在，讓我為您介紹一些第四季度的亮點。第四季淨銷售額增至 12.2 億美元，比去年同期的 11.3 億美元成長 8%。以固定匯率計算，該公司本季銷售額成長了 3%。從第四季產品類別銷售額來看，保養品增幅最高，成長 14%，達到 4.851 億。護髮品銷售額成長 13%，達到 6,510 萬件，化妝品銷售額成長 7%，達到 4.732 億件。正如預期的那樣，本季香水銷售額下降 5%，至 1.952 億，主要是由於陷入困境的零售業務銷售額下降以及香水業務整體持續疲軟。從地區來看，美洲第四季的淨銷售額略有成長，達到 6.607 億美元。去年第四季成長了 9%。提醒一下，在去年的季度，我們加大了廣告和促銷支出以建立銷售動能。在歐洲、中東和非洲，銷售額成長了 23%，達到 4.024 億美元，而以當地貨幣計算的銷售額成長了 7%。在亞太地區，本季銷售額按報告計算成長 8%，達到 1.599 億美元，以當地貨幣計算成長 3%。就我們整個財年的營業利潤而言，公司實現營業收入 5.171 億美元，而去年報告的營業收入為 4.588 億美元。這反映出，由於毛利率的強勁改善，再加上重組帶來的好處以及嚴格的成本控制，營業利潤率增加了 40 個基點，達到 10.1%。本財年我們的毛利率為 73.9%，比去年的 73.2% 提高了 70 個基點。這一增長反映了有利的供應鏈主動性、較低的促銷活動、不存在上一年的間接費用吸收問題以及外匯匯率的有利影響。這些改善被我們業務組合的變化部分抵消，特別是本財年大部分時間旅遊零售業的復甦以及相關的香水銷量上升。整個財年營運費用佔銷售額的百分比增加了 30 個基點，達到 63.8%。我們在第二季和第三季經歷的營運費用改善持續到第四季度，反映出計畫的重組節省、銷售費用效率和整體成本控制。特別是在那些不產生銷售的領域。全年來看，這些改進主要被更高水準的廣告、樣品和銷售所抵消，因為我們繼續投資我們的品牌。本財年，包括銷售成本和營運費用在內的廣告和促銷支出總額為 14.3 億美元，而去年為 13.3 億美元。正如我們過去所說和所做的那樣，我們將繼續致力於支持我們的收入成長和增強品牌資產。從整個財年各類別的營業利潤來看，護膚品成長了2,480 萬美元，達到2.732 億美元；化妝品成長了1,480 萬美元，達到1.98 億美元；護髮產品成長了110 萬美元，達到1,480 萬美元，反映出銷售額的增加，部分被持續的廣告所抵消。 、樣品和銷售成本，以推廣新產品和最近推出的產品。香水營業收入成長了一倍多，從 1,870 萬美元增加到 3,210 萬美元，這主要是由於我們的旅遊零售業務業績改善。至於按地區劃分的營業利潤，美洲增加了 2,380 萬美元，達到 2.467 億美元。這一成長主要是由於更高的銷售和重組效益以及其他成本控制措施，特別是與製造成本相關的措施。該地區的改善反映了我們的一些支持支出的時間安排的影響，這些支出偏向於本財年之初。在歐洲、中東和非洲，2003財年的營業收入比去年增加了4,780萬美元，達到2.277億美元。其中英國和我們的旅遊零售業務成長最為顯著。正如弗雷德所提到的，我們的旅遊零售業務是利潤率最高的業務之一，在去年的負面事件的背景下，本財年的大部分時間都出現了急劇復甦。以西班牙、義大利和希臘為首的一些市場的經營業績也有所改善。亞太地區的營業收入和收入下降至 4,270 萬美元，韓國和泰國營業收入的增加被澳洲因上一年零售安排變化而下降的營業收入以及日本業績下降所抵消。關於我們的利息成本，我們報告本財年的淨利息支出為 810 萬美元，而去年為 980 萬美元。這一下降主要是由於未償還借款減少，但實際利率上升部分抵消了這一下降。今年的有效所得稅率為 33.2%，而前一年為 34.5%，扣除第四季特別費用後為 33%。這項改善主要歸功於持續的稅務規劃舉措，包括多項稅務談判的有利解決，以及與海外業務相關的總體稅率的降低。在扣除每年所有特殊項目之前，第四季淨利成長 29%，達到 6,650 萬美元，而上年同期為 5,150 萬美元。本季稀釋後每股收益從去年同期的 19 美分增至 26 美分，成長 38%。全年淨利潤成長 15%，達到 3.333 億美元，而上年為 2.894 億美元；稀釋後每股收益從上年的 1.10 美元成長 20%，達到 1.32 美元。關於我們的財務狀況，截至2003年6月30日，公司的現金餘額為3.64億美元，比去年減少1.83億美元。全年經營活動產生的現金淨額為5.49億美元，較上年同期的5.18億美元成長6%。與上年同期相比的有利變化主要反映了收益的增加和應收帳款的改善。讓我重點介紹一下我們今年現金的一些用途。我們以股票回購和股利的形式向股東返還了4.34 億美元，其中3.52 億美元用於根據我們的股票回購計劃回購約1,120 萬股股票，使該計劃下回購的股票總數達到1,380 萬股。由於 1 月生效的普通股股息政策從按季度改為按年，股息支付額為 8,200 萬美元，比去年增加了 1,100 萬美元。我們透過償還總計 1.3 億美元的全部商業票據餘額來降低債務水準。年內，我們向美國設定受益計畫繳款接近最高可扣稅金額，總計7,600萬美元，比去年增加3,300萬美元。資本支出1.63億元，較去年減少約4,000萬元，繼續根據經濟情勢嚴格控制支出。雖然僅這些項目的總價值約為 8 億美元，但我們也將現金用於其他項目，包括機會性收購。儘管如此，我們在年底仍然擁有 3.64 億現金，保持了財務靈活性和流動性，以充分利用出現的商機。現在讓我向您介紹我們的營運資金的最新情況。截至2003年6月30日，庫存為5.99億件，比2002年6月30日增加5,500萬件。2003年6月30日的庫存天數為164天，而2002年6月30日的庫存天數為156天。我們的庫存天數受到本財年最後一個季度 Darphin 和 Michael Kors 的增加的影響。年末外幣兌美元匯率走強、伊拉克戰爭和非典對我們的零售業務和某些亞洲市場造成的負面影響以及 2004 年第一季度計劃推出的活動水平比去年有所提高。關於應收帳款，截至 2003 年 6 月 30 日，我們的 DSO 為 47 天，比一年前的 50 天有所改善。與前一年相比，我們所有的回報率都有所提高。作為我們正在進行的資本結構和融資評估流程的一部分，3 月份，我們向 SEC 提交了一份擱置登記聲明，以出售一項或多項發行的債務證券，總額不超過 5 億美元。5月份，我們利用歷史低利率的機會，簽訂了一系列國債鎖定協議，以期發行債券。5 月份，我們還簽訂了利率互換協議，將現有 6% 優先票據的固定利率有效轉換為可變利率。隨著這一年的進展，我們將隨時向您通報我們的融資活動。現在讓我對 2004 財年提出一些假設。正如 Fred 所說，我們預計全年銷售額將成長約 7-8%，其中包括約 1% 的外匯正面影響。以當地貨幣計算，銷售額預計將成長 6-7%。我們預計本財年的毛利率將提高約 70-90 個基點，其中約一半來自持續的供應鏈節省，另一半來自策略性降低的促銷活動。我們預計營運費用將增加約 20-50 個基點。這是由於 Fred 提到的約 1500 萬美元的新業務開發投資，戰略性更高的廣告、樣品和推銷支出，正如我剛才提到的，我們的部分營銷投資從促銷支出轉向廣告支出，這有利於我們的銷售成本，但增加了我們的營運費用。這些成長預計將被銷售成長、非業務交易領域嚴格的成本控制以及先前重組的好處所部分抵消。營業利潤率預計將增加 20-70 個基點。就我們的美國退休金而言，在適當的規則和指導方針範圍內，我們繼續採取保守的做法，並將貼現率從7%調整至5.75%，並將計劃資產的預期回報率從8.5%調整至8%。根據新會計規則，自 04 財年第一季起生效，我們將把 3.6 億股優先股重新分類為長期債務。這有幾個影響。首先，相關股利將作為利息費用處理。其次，我們的有效稅率將提高，以補償額外的非稅可扣除利息費用。第三，我們的債務與資本比率將會增加。這些只是表面上的改變，只是為了遵守新會計準則，不會改變公司的基本面，也不會對每股盈餘產生任何影響。由於優先股重新分類，以及可能來自我提到的融資活動，您將看到我們的淨利息支出在 04 財年大幅增加。目前，我們預計 2004 財年的有效稅率約為 36%。與 03 財年相比的成長是由於優先股重新分類（相當於 150 個基點）以及全球獲利的綜合影響。我們預期經濟將逐步復甦，尤其是美國經濟。上半年，我們也將繼續增加廣告抽樣和商品推銷支出，以支持主要的發布活動，並在進入假期季節時刺激銷售動能。與下半年相比，這種組合將導致上半年獲利成長較低。我們預計今年上半年的報告銷售額將成長 8-9%，其中包括約 2% 的外匯正面影響。以當地貨幣計算，我們預計銷售額將成長 6-7%。上半年稀釋後每股盈餘預計在 78-81 美分範圍內。正如 Fred 早些時候所說，我們預計全年攤薄後每股收益將在 1.45 美元至 1.50 美元之間。最後，我想簡單談談高階主管出售公司股票的問題。如您所知，八年前我們上市時，發行的股票選擇權有效期為 10 年。隨著我們接近 10 年大關，你會不時看到高階管理層鍛鍊身體並出售股票。這絕不削弱我們對公司發展能力的信心。事實上，與所有選擇權在到期日或接近到期日行使相比，未來兩年內行使選擇權和賣出股票將減少股票的波動性。請記住，這是公司股票選擇權第一次接近到期日。我今天的評論到此結束。我們現在很樂意回答您的問題。

Thank you, ladies and gentlemen the question and answer session will be conducted electronically. If you have a question, you simply press the star key, followed by the digit one on your touch-tone telephone. To ensure everyone has an opportunity to ask their questions, we will limit each person to one question and a related follow-up. Time permitting, we will return to you for additional questions. Just queue up again by pressing the star key and the digit one. Our first question today will come from Andrew McQuilling at UBS.

謝謝女士們先生們，問答環節將以電子方式進行。如果您有疑問，只需按星號鍵，然後按按鍵式電話上的數字一即可。為了確保每個人都有機會提出問題，我們將限制每個人只提出一個問題和相關的後續問題。如果時間允許，我們將回覆您詢問其他問題。只需按星號鍵和數字一即可再次排隊。我們今天的第一個問題將來自瑞銀集團的安德魯·麥克奎林。

Thanks very much. Fred, can you talk more about the alternative investments that you plan in fiscal '04? What your intent is, what the plans are, if you can?

非常感謝。Fred，您能詳細談談您在 04 財年計畫的另類投資嗎？如果可以的話，你的意圖是什麼，計畫是什麼？

Well, all I can tell you about is that I'm very excited about what we will be doing here and what we're planning. But I don't want to be specific on it because it involves other activities as well, so I can't tell you more about it right now, but we expect to talk about that at the beginning of the year probably.

好吧，我只能告訴你，我對我們將在這裡做的事情和我們正在計劃的事情感到非常興奮。但我不想具體說明它，因為它還涉及其他活動，所以我現在不能告訴你更多有關它的信息，但我們預計可能會在今年年初討論這個問題。

Okay. And maybe one for Rick. Rick, can you talk about the savings that your restructuring programs generated in the June quarter and what you anticipate for fiscal '04?

好的。也許是給瑞克的。Rick，您能談談您的重整計畫在六月季度產生的節省以及您對 04 財年的預期嗎？

Yes, Andrew, in the June quarter, they achieved savings of a little bit over $10 million. And for next year, we anticipate fully achieving the restructuring savings that we had, which is I think around $45 million from the program we announced last year.

是的，Andrew，在六月季度，他們節省了略高於 1000 萬美元的費用。明年，我們預計將完全實現我們的重組節省，我認為我們去年宣布的計劃約為 4500 萬美元。

Terrific. Thanks very much.

了不起。非常感謝。

We will go next to Carol Wilke with Merrill Lynch.

接下來我們將討論美林證券的卡羅爾·威爾克。

Hi, thanks. One sort of off the wall question. Just given the campaign for the fragrance launch for the Estee Lauder brand, the Beyond Paradise, it is pretty different from you what you've done, do you see this as the beginning of a new sort of ad strategy for that brand as you focus on getting some different demographics into that brand?

你好謝謝。一種離奇的問題。剛剛為雅詩蘭黛品牌 Beyond Paradise 推出香水的活動，這與您所做的有很大不同，您是否認為這是該品牌新廣告策略的開始，因為您專注於該品牌讓一些不同的人口統計數據進入該品牌？

Well, as you know, with the Lauder brand, we've now had three models, with Lea, and with Carolyn Murphy and Elizabeth in the fragrance side, and yes, you will see a lot of development in that area, and we're finding some terrific response already to the adds that have been running.

嗯，如你所知，對於蘭黛品牌，我們現在已經有了三個模特，Lea、Carolyn Murphy 和 Elizabeth 在香水方面，是的，你會看到該領域的很多發展，我們’我們已經發現對正在運行的添加有一些很棒的響應。

Can you give us an idea of the events in that overall in the U.S. you're feeling better about what you saw in June and July, does that include in the Estee Lauder brand?

您能為我們介紹一下在美國發生的整體情況嗎？您對 6 月和 7 月所看到的情況感覺更好，這包括雅詩蘭黛品牌嗎？

Yeah, that's correct. It includes the Estee Lauder brand, particularly in makeup and skin care.

是的，這是正確的。它包括雅詩蘭黛品牌，特別是在化妝品和護膚品領域。

And --

和 -

In the fragrance area, the Lauder brand so far, before the launch of Paradise, has still has showed a minus number. But in makeup and skin care, it performed very well.

在香水領域，蘭黛品牌迄今為止，在Paradise推出之前，仍然呈現負數。但在彩妝和護膚方面，卻表現得非常出色。

So it is taking share from some of its competitors?

那麼它正在從一些競爭對手那裡奪取份額嗎？

That's what I'm seeing in the past few couple of months.

這就是我過去幾個月所看到的情況。

One more question, please. In the fourth quarter, can you give us an idea of how much travel retail was down? And is it because of SARS, et cetera? And is it going to be a gradual recovery or do you expect it to be up beginning in the September quarter?

請再問一個問題。您能否告訴我們第四季旅遊零售業下降了多少？是因為SARS等嗎？它會逐漸復甦還是您預計它會在九月季度開始上升？

You know I think this is going to be a more temporary scenario than what we used to in the past, I expect it to come back faster and in fact in July and August I'm already seeing some good numbers.

你知道，我認為這將是一個比過去更暫時的情況，我預計它會更快地恢復，事實上在七月和八月我已經看到了一些不錯的數字。

Thanks very much.

非常感謝。

Okay.

好的。

We'll go now to Amy Chasen with Goldman Sachs.

現在我們請高盛的艾米·查森 (Amy Chasen) 發言。

I just wanted to talk a little bit about uses of cash. First of all, do you expect that this distribution enhancement strategy will require any incremental cap ex?

我只是想談談現金的使用。首先，您預期這種分配增強策略是否需要任何增量資本支出？

No.

不。

Okay. And can you talk about your -- you mentioned acquisitions and that you do have an appetite for them. Can you give us some idea of whether you would consider doing bigger acquisitions than you've done in the past?

好的。您能否談談您提到的收購以及您確實對收購感興趣。您能否告訴我們您是否會考慮進行比過去更大的收購？

Well in the acquisition scenario, Amy, as you know, if strategically it fits into our portfolio, and if the economics are sound, and accretive to the company, not in 10 years from now but in the relatively short period of time, then we are obviously very interested. So it is a question of what the deal is.

嗯，在收購場景中，艾米，正如你所知，如果從戰略上講它適合我們的投資組合，並且如果經濟狀況良好，並且對公司有利，不是在10 年後，而是在相對較短的時間內，那麼我們顯然非常感興趣。所以問題是這筆交易是什麼。

Can you give any further parameter? Back many years ago, you used to say we're looking for brands that have the potential to be, I can't even remember what the number was, but I think 200 million in sales, and you gave some specific parameters about what you were looking at. Can you update us on those thoughts?

能再給個參數嗎？很多年前，您曾經說過我們正在尋找有潛力的品牌，我什至不記得數字是多少，但我認為銷售額是 2 億，並且您給出了一些關於您的具體參數正在看著。您能否向我們介紹這些想法的最新情況？

I will let William give you a couple of comments on that.

我會讓威廉對此發表一些評論。

Amy, I think it is safe to say that the parameters for the kinds of brands we're looking at are brands that have a minimum of net global sales today in the 20-25 range, and could range up to 2 billion dollars.

艾米，我認為可以肯定地說，我們正在尋找的品牌類型參數是目前全球淨銷售額至少在 20-25 範圍內、最高可達 20 億美元的品牌。

Okay. So then -- but that implies -- when you say it could range up to 2 billion meaning potential to 2 billion or you would look at stuff that has up to 2 billion?

好的。那麼——但這意味著——當你說它的範圍可能高達 20 億時，意味著潛力達到 20 億，或者你會考慮高達 20 億的東西？

Well, we believe that our balance sheet is healthy enough and we have the financial wherewithal to look at brands that cover within that spectrum that fit within our portfolio, to Fred's point, and can be accretive to our shareholders on a relatively short period of time.

嗯，我們相信我們的資產負債表足夠健康，我們有足夠的財務資金來尋找符合我們投資組合的品牌，並且可以在相對較短的時間內為我們的股東帶來增值。

Okay. Great. And just along those same lines, would you guys consider raising the dividend payout ratio? And could you also address share repurchase? It looks like in the fourth quarter that the rate of share repurchases accelerated.

好的。偉大的。同樣，你們會考慮提高股利支付率嗎？您還能解決股票回購問題嗎？看起來第四季股票回購的速度有所加快。

Well, we are going to have our next board meeting where we are going to review the dividend policy of the company and we will deal with that after our deliberation. As far as share repurchase is concerned, we've had additional authorization from the board, which we've announced, and we're up to about 11.5 million share repurchase, as I think Rick pointed out.

嗯，我們將召開下一次董事會會議，我們將審查公司的股利政策，我們將在審議後處理這個問題。就股票回購而言，我們已經獲得了董事會的額外授權，我們已經宣布了這一點，正如我認為 Rick 指出的那樣，我們將回購約 1150 萬股股票。

Almost 14 in total.

總共差不多有14個。

Okay.

好的。

Okay. And last but not least, just on Asia, it looks like you're expecting that to maybe slow a little bit in the first half, relative to the Americas, when you give your ranking of kind of which regions should grow faster than others. Can you comment on that?

好的。最後但並非最不重要的一點是，就亞洲而言，當您給出哪些地區應該比其他地區增長更快的排名時，相對於美洲，您預計上半年的增長速度可能會稍微放緩。你能對此發表評論嗎？

That's not what I saw here. I think that Asia is looking at about a 7% growth from the numbers I looked at.

這不是我在這裡看到的。我認為根據我所看到的數字，亞洲的成長率約為 7%。

Okay. But then you're looking for the Americas to be up more than that?

好的。但您認為美洲的漲幅會不止於此？

Well, look, as I said, I'm not going to get into quarterly and exactly the percentages on each of the regions. I think I've already given some guidelines in terms of what I think is going to happen in the first half months and that's the way I would like to leave it.

好吧，正如我所說，我不會詳細介紹每個地區的季度百分比。我想我已經就我認為前半個月會發生的事情給出了一些指導方針，這就是我想要的離開方式。

Okay. Fair enough. Thanks a lot.

好的。很公平。多謝。

Okay. Thank you.

好的。謝謝。

We will go now to Wendy Nicholson with Smith Barney.

我們現在去溫蒂·尼科爾森和史密斯·巴尼。

Hi, two question. First of all, gross margin being down in the fourth quarter, was that just a function of last year's fourth quarter gross margin being abnormally high? Or product mix? Could you give aus little color on that?

你好，兩個問題。首先，第四季毛利率下降，是否只是去年第四季毛利率異常高的結果？還是產品組合？你能給我們一點顏色嗎？

Sure, the gross margin, that in the fourth quarter in particular, is the timing of some gift shipments, things that would normally have shipped in the third quarter, shipped in the fourth quarter. So some of the benefit that we had and reported last quarter where I mentioned timing of gift shipments was offset in this quarter. And there was a little bit of an abnormality in comparison to last year but nothing that we didn't know about. And I think we had actually announced early on that we expected most of our improvements in the third quarter to come from gross margin, most of our improvements from the fourth to come from operating expenses and I think you saw that.

當然，毛利率，特別是第四季度的毛利率，是一些禮品發貨的時間，通常在第三季度發貨的東西，在第四季度發貨。因此，我們在上個季度報告的一些好處（我提到的禮品發貨時間）在本季度被抵消了。與去年相比，有一點異常，但沒有什麼是我們不知道的。我認為我們實際上很早就宣布，我們預計第三季的大部分改進將來自毛利率，而第四季度的大部分改進將來自營運費用，我想您已經看到了這一點。

Perfect. Now my second question relates to the guidance for local currency sales growth for 2004. I recognize that the trends in department stores, particularly here in North America, are looking much improved. But it strikes me as a big number, I guess, if you will, to do sort of 6-7%, particularly in light of the fact that you've actually seen some very strong local currency results from Europe. So is there any stand-out, if you will, that I'm not thinking of? I mean I'm assuming travel retail picks up a bit, I'm assuming North America picks up a bit but it strikes me 6-7% is a real leap over what we saw in '03 and '02. Is it just the macro environment getting better?

完美的。現在我的第二個問題涉及2004年本幣銷售成長指引。我認識到百貨公司的趨勢，特別是在北美，看起來已經有了很大改善。但我想，如果你願意的話，我認為 6-7% 是一個很大的數字，特別是考慮到你實際上已經看到歐洲一些非常強勁的當地貨幣結果。那麼，如果你願意的話，有什麼我沒有想到的突出之處嗎？我的意思是，我假設旅遊零售業會有所回升，我假設北美會有所回升，但我認為 6-7% 比我們在 03 年和 02 年看到的水平有了真正的飛躍。只是宏觀環境好轉嗎？

No, it is more than that. We had excellent growth in, as you saw, in '03, in fragrance, makeup and in skin care and we're basically, on comp stores we were flat in fragrance. This year, we have a tremendous amount of ammunition. In the fragrance area, which will certainly show some substantial growth, as well as having an impact on the travel retail, plus you have a Darphin addition to that. So when you add it all up, we went over this back and forth and we like to be prudent but we feel pretty good about those numbers.

不，還不止於此。正如您所看到的，我們在 03 年在香水、化妝品和皮膚護理領域取得了出色的成長，但基本上，在比較商店中，我們的香水業務表現平平。今年，我們有大量的彈藥。在香水領域，這肯定會出現一些實質的成長，並對旅遊零售產生影響，此外還有 Darphin。因此，當你把所有這些加起來時，我們來回討論了這個問題，我們希望保持謹慎，但我們對這些數字感覺很好。

Okay. And then have you said, I know you don't love providing quarterly guidance, you gave us numbers for the first half, but is there anything directionally that is going to make first quarter markedly different than second quarter?

好的。然後您是否說過，我知道您不喜歡提供季度指導，您給了我們上半年的數據，但是是否有任何方向性因素會使第一季與第二季明顯不同？

I am not going to get into quarterly conversations. I think that the guidance I'm going to stick with, what we said for the first half.

我不打算進行季度對話。我認為我將堅持我們在上半年所說的指導方針。

Okay. Fair enough. Thank you.

好的。很公平。謝謝。

Thank you.

謝謝。

We will go next to Linda Bolton Weiser at Fahnestock & Company.

接下來我們將前往 Fahnestock & Company 的 Linda Bolton Weiser。

Thank you. I just have a couple numbers questions. First, can you give the advertising and promo spending for the year, the piece that is just in the SG&A expense?

謝謝。我只有幾個數字問題。首先，您能否給出當年的廣告和促銷支出，即僅包含在 SG&A 支出中的部分？

The amount, you mean dollar amount?

金額，你是指美元金額嗎？

Yeah, if you've got it.

是的，如果你有的話。

It is a little over 1.2 billion.

這個數字略高於 12 億。

Okay. And can you quantify the impact on the inventory balance of the acquisitions?

好的。您能否量化收購對庫存平衡的影響？

Yeah, we went up by eight days in total, about half of that was due to the acquisitions, there was another two days that were related to exchange rates so that the fact that the year end rate was much lower than the average rate of the last several months. And the rest was just launch activity really for next year.

是的，我們總共上漲了八天，其中大約一半是由於收購，還有兩天與匯率有關，所以年終匯率遠低於平均匯率。過去幾個月。剩下的只是明年的啟動活動。

Okay. That's it. Thanks a lot.

好的。就是這樣。多謝。

You're welcome.

不客氣。

We will go now to Andrew Shore with Deutsche Banc.

我們現在將與德意志銀行一起前往安德魯海岸。

Fred, can you just give us some color on the state of Clinique both in Japan and the U.S.?

Fred，可以為我們介紹一下倩碧在日本和美國的狀況嗎？

I'm going to let William make a couple of comments on that.

我將讓威廉對此發表一些評論。

Andrew, the Clinique business at retail in North America and Japan, we have seen improvement over the last 6-8 weeks which we are very happy with, we've seen some significant rate improvement in North America and in the last six weeks in Japan. Also, for the first time in a long time, we've seen very significant share gain. So we're very pleased with the activities and the focus that the brand has been making over the last six months and it now seems to be paying off nicely. Let's hope that this is a continued trend.

安德魯，北美和日本的倩碧零售業務，我們在過去 6-8 週內看到了改善，對此我們感到非常滿意，我們在北美和過去六週內看到了日本的一些顯著的增長率改善。此外，很長一段時間以來，我們第一次看到了非常顯著的份額成長。因此，我們對該品牌在過去六個月中所做的活動和重點感到非常滿意，現在似乎得到了良好的回報。我們希望這是一個持續的趨勢。

Okay. Thank you.

好的。謝謝。

And once again, ladies and gentlemen, that was star one if you would like to ask a question. Again star one on your touch-tone phone. We will go now to Scott Drysdale at Columbia Management.

女士們先生們，如果你們想問問題的話，那是第一要務。再次在您的按鍵式電話上加註星標。我們現在請哥倫比亞管理公司的 Scott Drysdale 發言。

Hi, just a quick question, trying to put some of the strategic issues here in place. Looks like you're doing pretty well in Asia and Europe. Can you give me some thoughts as to what the competitive responses look like and how well you see yourself dealing with those, try to get a handle on --

你好，只是一個簡單的問題，試著解決一些策略問題。看來你們在亞洲和歐洲做得很好。你能否給我一些關於競爭反應是什麼樣子的想法，以及你認為自己處理這些問題的能力如何，試著掌握——

Well we seem to have a pretty good time in the upper market. As I pointed out, there was a lot of conversation in the last couple of years that the mass market is going to put a lot of pressure on the prestige market. I mean the opposite really occurred, even I'm a little surprised about that. That the fact that the prestige market in the United States is outperforming the mass by 6 percentage points is pretty significant. So I think in the upper market, as you know, we have a pretty good position there. In Europe, we're certainly taking market share. And in Asia, in these markets which are still in the development phase outside of Japan, of course, there is a lot of opportunities and we're very active there. So as far as the competition is concerned, yes, in Asia, we're dealing with obviously Shiseido and in Europe we're dealing with some of the French companies, but we like the competitive environment.

嗯，我們似乎在高端市場度過了一段愉快的時光。正如我所指出的，過去幾年有很多討論認為大眾市場將對高端市場施加很大的壓力。我的意思是相反的情況確實發生了，即使我對此有點驚訝。美國高端市場的表現比大眾市場高出 6 個百分點，這一事實非常重要。所以我認為，如你所知，在高端市場，我們擁有相當不錯的地位。在歐洲，我們無疑正在佔據市場份額。在亞洲，在日本以外仍處於發展階段的市場，當然有很多機會，我們在那裡非常活躍。就競爭而言，是的，在亞洲，我們顯然正在與資生堂打交道，在歐洲，我們正在與一些法國公司打交道，但我們喜歡競爭環境。

Is it your thought that stimulation of competition is actually helping to grow the market for everybody? And you just have to be the ones who are doing the best right now?

您是否認為刺激競爭實際上有助於為每個人發展市場？而你只需要成為現在做得最好的人就可以了？

You know, I feel that that is the case. And a lot of the other companies are also very active in the mass market, which sort of makes it perhaps a little bit more difficult than for us, since we're focused maybe more in the upper area of the market.

你知道，我覺得情況就是如此。許多其他公司在大眾市場也非常活躍，這可能比我們更困難，因為我們可能更關注市場的高端領域。

Thanks very much.

非常感謝。

Okay.

好的。

Once again, ladies and gentlemen, as a final reminder, please press star one if you would like to ask a question.

女士們先生們，再次提醒您，如果您想提問，請按星號一號。

Thank you.

謝謝。

And again, a final reminder of star 1. We will go next to Sandy Sanders at Evergreen Investment.

最後再次提醒大家注意 1 號星。接下來我們將採訪常青投資公司的桑迪桑德斯。

Yes, just wonder on your return on asset, high single digits, close to about 10%; is that a number that you feel you can get to a mid teenager range or low teenager range, I notice Proctor, Avon, Colgate, are much higher just in terms of your business outlook.

是的，只是想知道你的資產回報率，高個位數，接近 10% 左右；是你認為你可以達到青少年中範圍或青少年範圍低的數字，我注意到普羅克特、雅芳、高露潔，就你的商業前景而言要高得多。

We gave some projections at our off-site meeting in last fall, where we showed our return on invested capital and without commenting specifically on the ratios themselves, all of our return ratios improved this year, and all of our return ratios obviously will improve as we approach the 13.5% operating margin objective.

我們在去年秋天的場外會議上給出了一些預測，當時我們展示了我們的投資資本回報率，但沒有具體評論比率本身，我們所有的回報率今年都有所改善，而且我們所有的回報率顯然都會改善，因為我們接近 13.5% 營業利潤率的目標。

Thank you.

謝謝。

And thank you, gentlemen. We are standing by with no more questions at this time. That does conclude today's question and answer session. If you were unable to join for the entire call, a play-back will be available between 11:30 a.m. eastern time today, through Monday, August 18. To hear a recording of the call, please dial 888-203-1112 with the pass code of 148445. That concludes today's Estee Lauder conference call. I would like to thank you all for your participation and wish you all a very good day.

謝謝你們，先生們。目前我們已做好準備，不再有任何疑問。今天的問答環節到此結束。如果您無法參加整個通話，則可以在今天東部時間上午 11:30 至 8 月 18 日星期一期間進行回放。若要收聽通話錄音，請撥打 888-203-1112，密碼為 148445。今天的雅詩蘭黛電話會議到此結束。我要感謝大家的參與，並祝福大家有個愉快的一天。