The Rising Influence of Rising Affluence

[DewDiligence]

DE addendum re FY2020 outlook: FY2019 GAAP EPS of $10.15 included a discrete tax benefit of $0.21/sh, which resulted in an artificially low FY2019 tax rate of 20%. Excluding this discrete tax item, FY2019 EPS was $9.94 (slide #3).

The tax rate in FY2020 is expected to be in the normal range of 24-26% (slide #16), so $9.94 rather than $10.15 is the proper FY2019 EPS base for year-over-year comparisons. On this basis, the FY2020 EPS guidance of $8.57-9.84 represents a YoY decline of -14% to -1% (rather than a range of -16% to -3%). Still not a good outlook, obviously, but it’s not quite as bad as the raw GAAP numbers.

https://s22.q4cdn.com/253594569/files/doc_financials/2019/q4/4Q_2019_Earnings-Call-Presentation.pdf