NEW YORK, May 16, 2006 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz" or the "Firm") reminds investors of The Estee Lauder Companies Inc. ("Estee Lauder" or the "Company") (NYSE:EL) that May 29, 2006 is the deadline to ask the Court to appoint you as lead plaintiff for the Class. Pomerantz filed a class action lawsuit in the United States District Court for the Southern District of New York, against the Company and certain of its officers, on behalf of purchasers of the common stock of the Company during the period from April 28, 2005 to October 25, 2005, inclusive (the "Class Period"). The complaint alleges violations of Section 10(b) and Section 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder.
The Estee Lauder Companies, Inc. engages in the manufacture, marketing, and sale of skin care, makeup, fragrance, and hair care products worldwide. The Complaint alleges that by the commencement of the Class Period, the Company was losing ground to products that, increasingly, were being distributed outside of the department store channels upon which Estee Lauder primarily relied for distribution of its products. Consequently, the Company's actual net sales and net earnings were trending downward. Defendants did not disclose the steady erosion of the Company's market share, or rectify the conditions leading to this result, but they did launch a largely successful campaign that employed channel stuffing and the dissemination of materially false and misleading statements to prop up the Company's share price long enough for Estee Lauder insiders to sell over 3 million shares of their common stock at artificially inflated prices.
The truth began to emerge on September 19, 2005 when defendants disclosed that the Company would not meet its guidance for the first half of fiscal 2006. On this disclosure, the Company's stock fell 9%, from $40.51 to $36.05 per share. The stock, however, continued to trade at artificially inflated levels until October 26, 2005 when defendants were forced to disclose that, for the first quarter of fiscal 2006, the Company would earn only $61.8 million, or $0.28 per share, down 38% from the previous year's earnings of $95.7 million, or $0.41 per share. These results were well below analysts' revised consensus earnings estimate of $0.32 cents a share on revenue of $1.54 billion. Following the disclosure of the Company's results and lowered guidance, the Company's share price fell to $30.71. By this time, Estee Lauder insiders had sold the aforementioned shares.
Shareholders outside the United States may also join the action, regardless of where they live or which exchange was used to purchase the securities. If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact Teresa L. Webb (tlwebb@pomlaw.com) or Carolyn S. Moskowitz (csmoskowitz@pomlaw.com) of the Pomerantz Firm at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz Firm, which has offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. For more information about the Firm, visit our web site at www.pomlaw.com.
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