NEW YORK, NY – May 17, 2010 – The Estée Lauder Companies Inc. (NYSE: EL) announced today that it has signed a definitive agreement to acquire Smashbox Beauty Cosmetics, Inc., a privately held, photo studio-inspired prestige cosmetics company based in Los Angeles, California. The acquisition is expected to close in July 2010, subject to certain conditions, including regulatory approval. While terms of the deal were not disclosed, the Company said that the transaction is expected to be accretive to earnings in fiscal year 2011, before transaction and integration costs.

The Smashbox brand, with its unique equity positioning, is a strategic complement to The Estée Lauder Companies’ portfolio of leading prestige cosmetic brands. Smashbox’s significant presence in assisted open-sell environments and specialty distribution channels will expand The Estée Lauder Companies’ product offerings and reach new and younger consumers in these high-growth prestige channels. Additionally, The Estée Lauder Companies will leverage its extensive international experience as it seeks to grow the brand and engage Smashbox’s expertise in digital and social media to advance its current capabilities, an important and growing competency for the Company.

Smashbox Beauty Cosmetics was founded in 1996 by brothers Dean and Davis Factor, great-grandsons of the makeup legend Max Factor, who were inspired by photo studio celebrities to create a unique makeup brand that met the highly demanding needs of a professional photo shoot. Since that time, Smashbox has established itself as a highly successful prestige cosmetics brand and a top performer in specialty channels. Currently, the majority of Smashbox’s sales are based in North America.

William P. Lauder, Executive Chairman of The Estée Lauder Companies, said, “One of the enduring strengths of The Estée Lauder Companies is our ability to identify brands with unique positioning and nurture those brands to accelerate their momentum and realize their full growth potential. The addition of Smashbox to our portfolio continues this 64-year legacy. We expect that with our strong cultural synergies and shared appreciation for family heritage, this will be a wonderful union.”

“Smashbox, like The Estée Lauder Companies, is a creativity-driven, consumer-inspired organization with great talent,” said Fabrizio Freda, President and Chief Executive Officer of The Estée Lauder Companies. “Adding Smashbox to our portfolio of brands will help strengthen our presence in prestige specialty channels worldwide, increase our product offerings in this important category and enhance our capabilities in digital media and direct response television. We are energized by the promising momentum of Smashbox and believe the brand will help attract new and younger consumers to The Estée Lauder Companies all over the world.”

“The Estée Lauder Companies is the ideal home for Smashbox,” said Dean Factor, co-founder and Chief Executive Officer, Smashbox Beauty Cosmetics, Inc. “The Company possesses the scale and vision to help transition Smashbox into its next phase of growth, and its track record of nurturing and growing prestige brands is second to none. Moreover, we share a similar cultural heritage and dedication to consumer-inspired innovation and creativity. We expect to benefit greatly from The Estée Lauder Companies’ extensive knowledge in product development, operational execution, and international marketing and distribution, and we look forward to the next great period of growth for the brand.”

“Smashbox is the leading Hollywood photo studio-inspired cosmetics brand with a devoted following and timeless appeal,” said John Demsey, Estée Lauder Companies’ Group President, responsible for the Estée Lauder, M•A•C, Tom Ford, Prescriptives, Bobbi Brown, Jo Malone, La Mer brands and after closing, Smashbox. “We are excited to be acquiring a uniquely positioned cosmetics brand with true talent well known for engaging consumers across prestige channels and in the digital media space. Smashbox fits perfectly within our DNA, and we look forward to continuing to delight our consumers together.”

The Estée Lauder Companies will collaborate with the Smashbox organization to develop a comprehensive integration plan to transition Smashbox into The Estee Lauder Companies’ family after closing. Dean Factor, co-founder and Chief Executive Officer, Davis Factor, co-founder, Chief Creative Office and celebrity photographer, and Budd Taylor, President, will each play key roles with respect to these activities and the continued success of Smashbox. Smashbox will continue operating out of its Los Angeles, California office.

The forward-looking statements in this press release, including those in the quoted remarks and those relating to the expectations for closing the acquisition, the impact on the Company’s financial results and the benefits of the acquisition, involve risks and uncertainties. Factors that could cause actual results to differ materially from those forward-looking statements include current economic and other conditions in the global marketplace, actions by retailers, suppliers and consumers, competition, the Company’s ability to successfully integrate the acquired business and/or implement its long-term strategic plan, and those described in the Company’s annual report on Form 10-K for the year ended June 30, 2009.