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Yahoo
5 days ago
- Business
- Yahoo
Beauty brands blend AI into operations
This story was originally published on CIO Dive. To receive daily news and insights, subscribe to our free daily CIO Dive newsletter. Cosmetic giants are moving forward with AI plans this year against a challenging backdrop of shifting consumer spending patterns and evolving global trade policies. Three of the industry's largest players, The Estée Lauder Companies, Coty and Ulta Beauty, are exploring how the technology can save costs, tailor communications and optimize forecasts amid the volatility. 'How are we prepared, as you're saying, to cope with the current business needs?' Roberto Canevari, ELC's EVP and chief value chain officer, said in response to an analyst's question during a conference Tuesday. 'There is a lot ahead of us. AI is bringing a lot of opportunities, but I personally feel we are in a very solid place.' The beauty brand, which includes Clinique, Mac and Too Faced, is using AI to modify communications for specific regions, such as India and France. The technology will speed up the process, Canevari said. AI is also helping the company decide what product goes where. 'The AI version that we're working on is looking at what is happening around the world and where is better,' Canevari said. 'The more we do it, the more it will become accurate.' ELC is doubling down on AI under new leadership. The company appointed Brian Franz as its chief technology, data and analytics officer in April, marking the first time all tech-related functions have been consolidated under a single leader as it pursues stronger alignment. 'By bringing these critical areas together under one leader, we are simplifying our structure, removing operational silos and creating stronger alignment across our data and technology strategies,' CEO Stéphane de La Faverie said in the announcement of his first external appointment to the executive leadership team since rising to its helm in October. The previous regime had ramped up AI efforts in recent years, aiming to bring the technology to the forefront of the industry. In November, employees had access to more than 240 customized GPTs that could analyze datasets or synthesize vendor details, among other tasks, as part of a partnership with OpenAI. More recently, ELC created an agent in partnership with Microsoft to help employees market and develop products by analyzing archives and company data. The progress on AI coincides with ELC's broader strategic initiative called Beauty Reimagined, which prioritizes efforts that restore sales growth and enable agility. In May, the company reported a net sales decline of 10% to $3.6 billion during its Q3 2025. McKinsey recommended beauty brands focus on high-value AI use cases and customizable tools to accelerate impact, in a January report. Potentially valuable back-end use cases included automated sales pitch prep, training exercises, internal search, demand planning and post-call transcription. Beauty brands are pursuing AI with a number of applications in mind. L'Oréal, one of the industry's biggest players, is collaborating with IBM to develop an AI model to help develop product formulas that meet sustainability goals, the companies said in January. Similar to ELC, Ulta is going through its own realignment while ramping up AI projects. The company's plan, dubbed Ulta Beauty Unleashed, centers on driving core business growth, scaling accretive businesses and realigning its foundation for the future. 'Our teams are adapting well to our new ways of working, and we are steadily advancing our optimization efforts,' CEO and President Kecia Steelman said last week during the company's Q1 2025 earnings call. 'During the quarter, we leveraged new AI and machine learning capabilities to drive supply chain efficiencies and launched scheduling and enhanced payroll management tools to optimize our efforts and support our cost-saving goals.' The company's CEO took on the role shortly after the new year and laid out the Unleashed plan in March. Steelman changed former Chief Technology and Information Officer Mike Maresca's title to chief technology and transformation officer in January, a move she described as aligning transformation efforts with cost optimization initiatives. 'I'm very confident that, under his leadership ... he's bringing it all together in a way that we can really understand our CapEx and our OpEx spend, and making sure that we're getting our ROI and getting the value realized out of these investments,' Steelman said during an April investor conference, referring to Maresca. Ulta, which has around 1,450 retail stores across the U.S., increased its AI use following a three-year investment period in foundational systems. An ERP overhaul brought operational challenges last year, requiring teams to make process adaptations. The company also ditched a legacy store platform and point-of-sale system and made inroads in data management. 'We didn't have really good data governance around all of our data, which is a huge unlock if you can have clean data sources to leverage AI, generative AI in the future,' Steelman said in April. Ulta saw net sales increase 4.5% to $2.8 billion during Q1 2025, though the company remained cautious about the rest of the year, Retail Dive reported last week. Cosmetic giant Coty has embarked on the latest leg of a transformation initiative first laid out in fiscal year 2020 at the peak of COVID-19 disruptions, which aimed to boost margins and save costs. One of the key pillars announced in April as part of the next phase of transformation is to streamline support functions. The company wants to add around $130 million of fixed cost savings to bring cumulative savings to around $1.2 billion since the program kicked off in 2021. AI is one of the levers Coty is using to reach its goal. 'Having this knowledge, the technology, leveraging AI in one hub, in that basically, we have a clear control tower on planning, and this will bring significant savings in terms of costs,' CEO Sue Nabi said in November. The work to consolidate planning into one hub and enable AI is ongoing, executives said during the company's Q3 2025 earnings call in May. Coty, which includes CoverGirl, Kylie Cosmetics and Sally Hansen, blamed market uncertainty and foreign exchange headwinds for declining sales during the quarter. 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Yahoo
28-05-2025
- Business
- Yahoo
Origins expands to Amazon's premium beauty store
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Beauty brand Origins announced its launch on the U.S. Amazon Premium Beauty store earlier this month, according to a press release. Over 70 Origins skin and body care products are available on the e-commerce giant's site including GinZing Brightening Eye Cream, Checks and Balances Frothy Face Wash and the Mega-Mushroom Relief and Resilience Soothing Treatment Lotion. A division of the Estée Lauder Companies, Origins seeks to broaden its customer base in the U.S. through Amazon. Origins is not the first Estée Lauder Companies' brand to launch on Amazon Premium Beauty. It follows a strategic corporate plan in which Estée Lauder, Clinique, The Ordinary and Too Faced all took their individual brands to Amazon as a way to reach more customers where they shopped. 'Today's consumers seek brands that reflect their values and deliver exceptional quality,' Francesca Damato, vice president of global marketing at Origins, said in a statement. 'For us, that means high-performance skincare powered by nature and science and indulgent, sensorial body care – always with the well-being of people and the planet in mind. Launching in the U.S. Amazon Premium Beauty store allows us to connect with an even broader audience on a platform they know and trust, while also offering a more seamless and convenient gifting experience through Amazon's ready-to-give options.' The Amazon Premium Beauty store continues to grow in scope as the e-commerce giant devotes more resources to its promotion. By 2030, Amazon's market share in beauty is expected to reach 15%, up from 10% in 2024, second only to Walmart, according to a report by TD Cowen. In February, Estée Lauder's president and CEO, Stéphane de La Faverie, introduced Beauty Reimagined, a strategic reorganization plan. In a video announcing the plan, de La Faverie mentioned the company's accelerated move into the Amazon Premium Beauty store as a key part of the brand's strategy to expand its selling proposition. 'The reality is we didn't move to new channels fast enough in some geographies where the consumers were shopping,' he said. 'Moving forward, I want us to be the first to capture where consumers are. We cannot afford to focus on too few critical markets, channels, products and consumers.' Estée Lauder is in the midst of a major reorganization that began in 2024 as sales and earnings leveled off. Last August, CEO Fabrizio Freda announced he would step down from the company and become an adviser through 2026. Other executive changes during the past year included a new group president of North America and the April appointment of Brian Franz as chief technology, data and analytics officer. In February, the cosmetics giant announced it would reduce its staff by as much as 11%, or up to 7,000 workers. Estée Lauder in May reported a 10% net sales decline in Q3, while net earnings declined 53% to $159 million. Sign in to access your portfolio
Yahoo
14-05-2025
- Business
- Yahoo
EL Q1 Earnings Call: Market Share Gains and Margin Initiatives Amid Ongoing Headwinds
Beauty products company Estée Lauder (NYSE:EL) reported Q1 CY2025 results topping the market's revenue expectations , but sales fell by 9.9% year on year to $3.55 billion. Its non-GAAP profit of $0.65 per share was significantly above analysts' consensus estimates. Is now the time to buy EL? Find out in our full research report (it's free). Revenue: $3.55 billion vs analyst estimates of $3.51 billion (9.9% year-on-year decline, 1.2% beat) Adjusted EPS: $0.65 vs analyst estimates of $0.31 (significant beat) Adjusted EBITDA: $607 million vs analyst estimates of $439.1 million (17.1% margin, 38.2% beat) Adjusted EPS guidance for the full year is $1.43 at the midpoint, beating analyst estimates by 2% Operating Margin: 8.6%, down from 13.5% in the same quarter last year Free Cash Flow Margin: 4.6%, down from 9.1% in the same quarter last year Organic Revenue fell 9% year on year (5.9% in the same quarter last year) Market Capitalization: $23.56 billion Estée Lauder's first quarter results were shaped by ongoing weakness in travel retail and softer consumer sentiment in key markets, but management highlighted sequential improvement in retail sales, particularly in the U.S., China, and Japan. CEO Stéphane de La Faverie emphasized that share gains in these geographies were driven by product innovation, targeted marketing, and new channel partnerships, noting, 'Clinique, The Ordinary, and Bumble and bumble drove gains for the U.S., while La Mer, Estée Lauder, and TOM FORD fueled China.' Looking ahead, management reaffirmed its commitment to returning to growth next year, underpinned by continued execution on the Beauty Reimagined strategy and the Profit Recovery and Growth Plan (PRGP). De La Faverie acknowledged persistent risks—such as tariffs and consumer sentiment—but cited operational changes and supply chain regionalization as key mitigation strategies. 'We are taking proactive decisions to mitigate as much as we can,' he said, adding that the company remains focused on restoring double-digit operating margins over the next few years. Estée Lauder's management attributed the quarter's performance to ongoing macroeconomic pressures and decisive internal restructuring. Key drivers included market share gains in core regions, focused product innovation, and operational changes in supply chain and cost structure. Travel Retail Decline: The travel retail segment experienced a sharp sales decline, now representing a lower mix of total revenue, as the company actively reduced exposure to this volatile channel. Market Share Gains: The company gained market share for the first time in years in the U.S., with Clinique, The Ordinary, and Bumble and bumble leading, while La Mer and TOM FORD drove growth in China and Japan. Product Innovation: New product launches, such as Clinique's Moisture Surge Active Glow Serum and Estée Lauder's Double Wear Concealer, contributed to share gains, and AI-driven marketing campaigns like Too Faced's Rebel Rock Lash Mascara shortened time-to-market for key innovations. Digital and Channel Expansion: Expansion on platforms like Amazon Premium Beauty and TikTok Shop enabled the company to reach more consumers directly, supporting online sales growth and brand visibility. Cost Structure Overhaul: The PRGP restructuring reduced over 2,600 positions, streamlined management, increased outsourcing, and drove improvements in gross margin, though sales deleverage pressured operating expenses as a percent of revenue. Management's outlook for the remainder of the year is shaped by the ongoing reset of travel retail, evolving trade policies, and continued operational efficiency initiatives. Travel Retail Reset: The company expects further sales declines in travel retail as it aligns inventory with end-demand and reduces channel volatility, aiming for stabilization in future quarters. Tariff and Supply Chain Mitigation: Management is regionalizing production and leveraging global manufacturing to reduce tariff exposure, while also exploring additional cost savings and strategic pricing to offset potential impacts. Efficiency and Margin Focus: Ongoing PRGP initiatives, including outsourcing and procurement optimization, are expected to support gross margin and enable reinvestment in consumer-facing activities, with management targeting a return to double-digit operating margins over the next several years. Steve Powers (Deutsche Bank): Asked about confidence in achieving inventory alignment across all categories; management said most challenges are behind them, especially in travel retail, but noted ongoing monitoring is required due to global volatility. Bonnie Herzog (Goldman Sachs): Inquired about assumptions for next year's growth given retailer destocking and consumer sentiment; management reiterated confidence in returning to growth, citing market share gains and operational efficiencies but highlighted persistent risks. Lauren Lieberman (Barclays): Sought clarity on supply chain shifts and timing to reduce China-sourced products; management expects to reduce U.S.-to-China shipments below 10% by year-end, with regional manufacturing in Japan playing a key role. Filippo Falorni (Citi): Asked about the scope of future cost savings from the PRGP; management pointed to continued outsourcing, procurement projects, and further organizational streamlining as ongoing opportunities. Bryan Spillane (Bank of America): Questioned how the company balances margin targets with reaccelerating growth; management stressed its new operating model and accountability structure will allow for both margin expansion and necessary investments in growth. In the coming quarters, the StockStory team will be watching (1) continued market share trends in the U.S., China, and Japan, (2) the pace and effectiveness of inventory and travel retail normalization, and (3) the impact of new product launches and digital channel expansion on retail sales growth. Progress on supply chain regionalization and cost efficiency initiatives will also be important signposts for future profitability. Estée Lauder currently trades at a forward P/E ratio of 29.4×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-05-2025
- Business
- Yahoo
Estée Lauder Companies (NYSE:EL) Reports Earnings Drop And Guidance Amid R&D Leadership Change
Estée Lauder Companies announced a quarterly dividend and released new corporate guidance recently. Meanwhile, global indices, including the S&P 500 and Dow, witnessed positive momentum due to robust earnings from tech giants like Microsoft and Meta. While the broader market experienced a 2.7% rise, Estée Lauder's 4.72% price increase amidst less favorable earnings could reflect investor interest buoyed by dividend affirmation, despite the challenging sales outlook. The continuation of positive market sentiment likely outweighed Estée Lauder's softer earnings news, contributing to its stock performance aligning with the broader market's upward trend. Estée Lauder Companies has 2 risks we think you should know about. The end of cancer? These 23 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. The recently announced quarterly dividend and corporate guidance from Estée Lauder Companies arrived as broader market indices, like the S&P 500 and Dow, experienced upward momentum due to robust performances from technology giants. While Estée Lauder's 4.72% share price increase demonstrates some positive investor sentiment, it's worth noting the company's longer-term performance, with a total return, including dividends, dropping significantly by 51.86% over the past year. Compared to the broader US market, which saw a 9.6% rise, Estée Lauder has notably underperformed. Within the US Personal Products industry, Estée Lauder also lagged, as the industry itself declined by 24.1% over the same period. The affirmation of the dividend amidst less favorable earnings could signal confidence in Estée Lauder's future plans to leverage AI and undergo restructuring as outlined in their Beauty Reimagined strategic plan. Expansion into high-growth markets and improving operating leverage remain central to enhancing future revenue and earnings. Analysts are forecasting a 1.8% annual revenue growth and a trajectory towards profitability, with earnings expected to reach US$1.3 billion by 2028. The current share price of US$59.59 suggests a 16.0% discount to the consensus price target of US$70.94, highlighting potential upside if future strategic initiatives bear fruit. According our valuation report, there's an indication that Estée Lauder Companies' share price might be on the cheaper side. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:EL. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
National Post
30-04-2025
- Business
- National Post
Carl Haney, Executive Vice President, Global Innovation and Research & Development to Depart The Estée Lauder Companies
Article content NEW YORK — Today, The Estée Lauder Companies Inc. (NYSE: EL) announced that Carl Haney, Executive Vice President, Global Innovation and Research & Development (R&D), will depart the company effective June 30, 2025 to pursue new opportunities. With Carl's transition, the company intends to bring in new external talent to drive the next era of transformative innovation in line with its strategic vision of becoming the best, most consumer-centric, prestige beauty company in the world. Article content Article content 'Over the past decade, Carl has forged impactful partnerships at the forefront of scientific innovation and delivered breakthrough products and superior formulations across categories, benefits and occasions, while fueling corporate innovation and advanced technologies,' said Stéphane de La Faverie, President and Chief Executive Officer, The Estée Lauder Companies. 'As we look to the future and delivering our bold Beauty Reimagined vision, we will transform our approach to innovation across the company—which includes evolving the structure of our R&D team, expanding our external partnerships, strengthening product and commercial innovation and accelerating speed-to-market.' Article content Mr. Haney joined The Estée Lauder Companies in 2012 following a more than 25-year R&D career at The Procter & Gamble Company. Throughout his tenure at The Estée Lauder Companies, Carl and his team have advanced end-to-end product and corporate innovation by strengthening the company's global R&D network, enhancing scientific credentialing, expanding local relevancy, building upstream active ingredient and fermentation platforms, and significantly increasing the company's global patent portfolio. Under his leadership, the company has also accelerated sustainability efforts at the company through sustainable packaging and green chemistry advancements. Most recently, Mr. Haney and his R&D team have unveiled new collaborations at the forefront of biotech innovation, longevity, active derma and other critical areas with best-in-class academic partners including the Massachusetts Institute of Technology and Serpin Pharma, and diverse industries such as pharma to fuel new product pipelines. Previously, Carl played a critical role as Chair of the company's Global Crisis Leadership Team, overseeing planning and response for emerging issues, current issues, and crises globally. Article content During this transition, Mr. Haney and the R&D team will prioritize business continuity and enabling transformative innovation. Brand and regional leadership will collaborate with their R&D partners across the company's robust innovation network until a successor is named. Article content Statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include those in the various quotations. Although the Company believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, actual results may differ materially from the Company's expectations. Factors that could cause actual results to differ from expectations include the ability to successfully implement the Company's strategy, including Beauty Reimagined and the profit recovery and growth plan; successfully transition its leadership; and those other factors described in the Company's filings with the Securities and Exchange Commission, including its most recent filings with the Securities and Exchange Commission. The Company assumes no responsibility to update forward-looking statements made herein or otherwise. Article content The Estée Lauder Companies Inc. is one of the world's leading manufacturers, marketers, and sellers of quality skin care, makeup, fragrance, and hair care products, and is a steward of luxury and prestige brands globally. The Company's products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced, the DECIEM family of brands, including The Ordinary and NIOD, and BALMAIN Beauty. Article content Article content Article content Article content Article content Contacts Article content Media Relations: Jill Marvin jimarvin@ Article content Article content Article content
