Latest news with #DeLaFaverie
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
Fashion Network
01-05-2025
- Business
- Fashion Network
Estée Lauder predicts 2026 sales rebound after challenging year
Estée Lauder Companies Inc. expects to return to sales growth in 2026, even as it faces a sharper revenue decline than anticipated this year. The beauty group behind brands such as The Ordinary and Clinique forecasts an 8% to 9% drop in annual sales, deeper than Wall Street projections. While trade turmoil and a clouded economic outlook are adding to the deep-seated challenges the beauty giant was already facing, the company said it sees early signs its turnaround plans are working and that it can return to growth 'provided there is meaningful resolution of the recently enacted tariffs to mitigate potential related negative impacts,' CEO Stéphane de La Faverie said in a statement. The stock rose 5% in Thursday premarket trading in New York. Estée Lauder had dropped 20% for the year through Wednesday's close, compared with a 5.3% decline in the S&P 500 index. The company had pulled its guidance in October, well before the trade war escalated, because of weak and choppy demand for its products in China and the appointment of de La Faverie. Executives didn't provide an outlook when the company reported its second-quarter results on Feb. 4. When he took over as CEO on Jan. 1, De La Faverie was already digging Estée Lauder out of a financial hole. Sales had been falling because of plummeting demand for the company's beauty products in duty-free stores across Asia and slipping market share in the U.S., as competitors L'Oréal SA and smaller upstarts have been faster to seize on social media trends. With the trade war and the economic uncertainty that has ensued, the challenges facing de La Faverie are mounting. According to research from Oliver Chen at TD Cowen, Chinese consumers increasingly prefer local brands to foreign ones like those owned by Estée Lauder. And U.S. shoppers are feeling bleak about the economic outlook and watching their wallets. De La Faverie is trying to boost sales and profitability by expanding on a turnaround plan set by his predecessor, which includes layoffs and other cost-cutting measures. While many companies that sell nice-to-have items such as apparel and beauty products are starting to see a more cautious consumer, Estée Lauder has been faring worse than its peers. Rival L'Oréal reported stronger-than-expected sales in its most recent quarter, which ended in March, driven by demand for its high-end makeup and perfumes. The company stuck with its goal to increase sales and profit this year. At luxury conglomerate LVMH, the perfumes and cosmetics unit reported a slight decline in organic sales during the first quarter. That's the first time the division has had a dip in revenue since the pandemic. In the U.S., sales at cosmetics retailer Sephora slowed. LVMH executives, in part, blamed for being 'very aggressive' on pricing.
Fashion Network
01-05-2025
- Business
- Fashion Network
Estée Lauder predicts 2026 sales rebound after challenging year
Estée Lauder Companies Inc. expects to return to sales growth in 2026, even as it faces a sharper revenue decline than anticipated this year. The beauty group behind brands such as The Ordinary and Clinique forecasts an 8% to 9% drop in annual sales, deeper than Wall Street projections. While trade turmoil and a clouded economic outlook are adding to the deep-seated challenges the beauty giant was already facing, the company said it sees early signs its turnaround plans are working and that it can return to growth 'provided there is meaningful resolution of the recently enacted tariffs to mitigate potential related negative impacts,' CEO Stéphane de La Faverie said in a statement. The stock rose 5% in Thursday premarket trading in New York. Estée Lauder had dropped 20% for the year through Wednesday's close, compared with a 5.3% decline in the S&P 500 index. The company had pulled its guidance in October, well before the trade war escalated, because of weak and choppy demand for its products in China and the appointment of de La Faverie. Executives didn't provide an outlook when the company reported its second-quarter results on Feb. 4. When he took over as CEO on Jan. 1, De La Faverie was already digging Estée Lauder out of a financial hole. Sales had been falling because of plummeting demand for the company's beauty products in duty-free stores across Asia and slipping market share in the U.S., as competitors L'Oréal SA and smaller upstarts have been faster to seize on social media trends. With the trade war and the economic uncertainty that has ensued, the challenges facing de La Faverie are mounting. According to research from Oliver Chen at TD Cowen, Chinese consumers increasingly prefer local brands to foreign ones like those owned by Estée Lauder. And U.S. shoppers are feeling bleak about the economic outlook and watching their wallets. De La Faverie is trying to boost sales and profitability by expanding on a turnaround plan set by his predecessor, which includes layoffs and other cost-cutting measures. While many companies that sell nice-to-have items such as apparel and beauty products are starting to see a more cautious consumer, Estée Lauder has been faring worse than its peers. Rival L'Oréal reported stronger-than-expected sales in its most recent quarter, which ended in March, driven by demand for its high-end makeup and perfumes. The company stuck with its goal to increase sales and profit this year. At luxury conglomerate LVMH, the perfumes and cosmetics unit reported a slight decline in organic sales during the first quarter. That's the first time the division has had a dip in revenue since the pandemic. In the U.S., sales at cosmetics retailer Sephora slowed. LVMH executives, in part, blamed for being 'very aggressive' on pricing.
Bloomberg
07-03-2025
- Business
- Bloomberg
Estée Lauder CEO Stéphane de La Faverie on Overhaul, Tariffs, Pricing & AI
Estée Lauder CEO Stéphane de La Faverie says he is committed to reigniting growth and achieving "solid double-digit margin" for the company. "We need to be reactive to where the consumer goes, and we need to make sure we give them the innovation they are looking for in the time that they want it," he said. The beauty and cosmetic giant recently announced its "Beauty Reimagined" plan to try and improve profitability and lift the company's struggling share price. De La Faverie joins "The Pulse with Francine Lacqua" exclusively on Bloomberg TV. (Source: Bloomberg)
