Latest news with #StéphanedeLaFaverie
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
08-05-2025
- Business
- Yahoo
Inside Estée Lauder CEO Stéphane de La Faverie's Fast-paced Reset of the Prestige Beauty Giant
Once a riot of damask, chintz and stately gold drapery, the 40th-floor reception area of the Estée Lauder Cos. New York City headquarters was redecorated after the pandemic in creamy shades of ecru, beige and fawn, with elegant orchids resting on marble-topped tables and discreet silver-framed family portraits scattered throughout. Today, Stéphane de La Faverie is walking briskly to his office through the space, a fitting blank slate, if you will, for the newly anointed chief executive officer who has taken the reins during the most challenging period in the company's 79-year history. More from WWD ColourPop Introduces the May Color of the Month With Warm Shades of 'Sweet Peach' for Summertime Makeup Routines Paris Hilton Reveals Parívie Skin Care Line, Chats A24 Memoir Series Deal The Highest-paid Beauty CEOs for 2024 And just as Aerin Lauder completely reimagined the lobby that was originally designed by her grandmother and group founder, Estée, when the company moved into the General Motors building in 1969, thus is de La Faverie rewriting the playbook for the prestige beauty giant with the hopes of restoring it to a path of growth and profitability. 'Our vision is to become the best consumer-centric prestige luxury company in the world,' said de La Faverie, during an exclusive in-depth interview with Beauty Inc on the eve of his keynote speech at the WWD Beauty CEO Summit. 'The fundamentals of our company are strong. We have the passion, the talent and, frankly, the energy in the organization to make change. People want to see change.' The makeover de La Faverie is attempting goes much deeper than a decor update. It is transformational, and — not yet six months into his tenure — de La Faverie is wasting no time in making his move, significantly altering how Lauder does business by breaking down bureaucracies, dismantling long-held structures and injecting the organization with a bias toward risk taking — all this against a macro environment that is one of the most volatile in recent history. 'We're climbing up a hill. There is no doubt about it,' said William P. Lauder, chair of the company's board of directors. 'The task is to get to the top of the hill in a manner that makes us stronger.' As has been well documented, the hill is a steep one. Under previous CEO Fabrizio Freda, the company rode the Chinese beauty boom with a hero-product-focused strategy that saw its stock price rise to a high of $370 in January 2022, giving it a market capitalization of more than $133 billion. But the precipitous decline in the Chinese and travel-retail markets, coupled with an overreliance on saigou and an anemic innovation pipeline, took their toll. The group's stock price declined 42 percent in 2023 and almost 50 percent in 2024. At press time, the share price was 59.71 after hitting a low of $50.06 during the stock market tumult set off by President Donald Trump's announcement of tariffs on April 2. For his part, de La Faverie is focused on the medium-to-long term, working through the real-time crises as they arrive but keeping his eye on the big prize. 'The external volatility — I can't ignore it. But I say to my team to focus on what we can control,' he said, noting that Lauder has weathered everything from recessions to pandemics in its history. 'Every time we come out stronger,' he continued. 'We're taking the right decisions and the decisions we're making are not small ones. 'They are structural, they are leadership, they are cultural decisions,' de La Faverie continued. 'We're going through the biggest operational, leadership and cultural change of our organization — and that will allow us to navigate the volatility much better.' The CEO is referring to the five-part plan he introduced to Wall Street analysts during his first earnings call in February. Called Beauty Reimagined, it includes everything from a radical organizational restructuring to a plan for increasing innovation, expanding distribution and accelerating efficiencies — all while injecting agility and speed into an organization that many insiders acknowledge has become bogged down by bureaucracy and process. ('Fewer meetings. Faster decisions,' said Jane Hertzmark Hudis, chief brand officer, of the new regime.) Thus far, Wall Street seems to be taking a wait-and-see attitude, although as of press time, analysts are still awaiting the company's full-year 2025 forecast, which was previously scrapped. (De La Faverie declined to comment on that, citing a quiet period before the release of fiscal-year third-quarter earnings on May 1.) 'Shares and valuation will likely remain under pressure and be a 'show-me' story as ELC undergoes a necessary yet potentially complex transformation,' wrote TD Cowen's Oliver Chen after de La Faverie's first post-earnings analyst call in February. 'We continue to monitor the progress from the new management team and remain HOLD until there are clear signs of sales inflection.' Other longtime watchers were more positive. 'Stéphane de La Faverie wasted no time in unveiling his turnaround plan,' wrote D.A. Davidson analyst Linda Bolton Weiser. 'The new CEO was not afraid to clearly state the company's deficiencies.' De La Faverie also announced that he was significantly expanding the Profit Recovery and Growth Plan, which he and Jane Lauder, then the chief data officer and executive vice president of marketing and widely reported to be de La Faverie's main rival for the CEO job, were tasked with executing in 2024. The expansion is focused on three key areas: a more competitive approach to procurement, improving supply chain efficiencies and an expanded organizational restructure that will see the elimination of between 5,800 to 7,000 jobs. 'It felt like a big responsibility, but one I was taking with the support of the board and the family for the long term,' said de La Faverie, when asked what it felt like to announce such a dramatic move in his first outing as CEO. 'As an organization, we experienced tremendous and fast growth, so we built capability ahead of that growth. We saw an organization and the world that was going to continue to have a lot more growth potential than what we are experiencing today,' he continued, ticking off the China slowdown, geopolitical events like the Russia-Ukraine war and the conflict in the Middle East. 'By definition, that created complexity and what I'm trying to do today is remove the complexity and restore agility,' said de La Faverie, 'not in the way it was before, but in a way that recognizes the new needs in the world.' 'It's a big job and not an easy one,' said Renato Semerari, the CEO of Intercos who has known de La Faverie since his days running the Estée Lauder brand from 2016 to 2020. 'Big companies, in general, tend to lose their agility and the ability to jump on trends very quickly. Stéphane wants to bring this in and make it an integral part of the strategy. Companies need agility in the decision-making process, in taking accountability, in taking risks. He knows this and is acting on it very quickly.' The central tenet of de La Faverie's vision is to make sure the consumer is at the center of every decision made, a major cultural shift for a company that was founded on the premise that distribution defines prestige in the beauty industry. 'At the end of the day we are defined by the consumer. We need to move where the consumer is,' he said. 'What I'm saying to the teams is where the prestige consumer is and where we can build desirability and equity for our brands — we move.' Even before he ascended to the corner office, de La Faverie showed a propensity for action. As executive group president overseeing about half of the company's 25 brands from 2022 to 2024, he was a key part of the team that spearheaded the launch of Lauder's marquee brands on Amazon, a significant move for a company that industry analysts agree was slow to recognize the momentum of the specialty retail channel, particularly in the U.S., and paid the price. Melis del Rey, general manager of health and beauty at Amazon, recalls a podcast she heard with him in 2020. 'Stéphane had bold views about the state of beauty in the pandemic, talking about how this would jump-start a digital revolution in beauty, and how companies would need to adapt how they engage with consumers,' del Rey said. 'Back in the day Estée Lauder was not a company thinking digital-first, so this really stood out for me. So when I met him in early 2023, I was like, 'I know a little bit about your perspective, but I still don't know if you really mean it.'' Just one year later, in March of 2024, the Clinique brand launched on Amazon, quickly followed by eight more, including, most recently, The Ordinary. 'What stood out for me was Stéphane's visionary thinking in the context of how important e-commerce was for ELC and how he wanted to learn fast and move fast. He was very willing to experiment and try new things,' said del Rey. One key move was creating an internal 'Amazon center of excellence,' to drive efficiencies of learning and maximize the potential of each brand, pivoting and iterating as new brands onboarded to reflect what was working. A month into his tenure as CEO, de La Faverie made similar structural moves, unveiling a leaner, flatter leadership model. Lauder's 24 brands have been organized into category clusters that report to Hudis, and the number of regions has been reduced from seven to four geographic clusters: the Americas; mainland China; Asia-Pacific; and Europe, Middle East and Africa, the U.K. and Ireland and emerging markets grouped into the final one. 'Already this has dramatically simplified business operations — supporting this concept of leaner, faster,' said Jo Dancey, the global brand president of Jo Malone London who was promoted to lead the Lifestyle Fragrance brand cluster consisting of that brand plus Kilian Paris and Editions de Parfums Frédéric Malle. 'It's reinforcing the notion of the consumer being at the heart of everything. 'Before, we had a much more siloed approach,' she continued. 'This allows us to play the portfolio in a stronger way — which brands are best for a particular market, who are the consumers for each brand, where is the overlap, the opportunity, the challenge.' De La Faverie champions an approach he calls 'three-three,' meaning in brand meetings he asks leaders for three things that are working and how they want to scale those, and three things that aren't where they need help. An avid windsurfer and sky-diver ('before I had children,' he likes to joke), de La Faverie pushes his team to think boldly when they're answering such questions. He describes himself as 'authentic and approachable,' as a leader, but also as someone who is willing to take risks. 'There are some people who need 100 percent of the information to make a decision. There are some who need 80-20. I need 70-30,' he said. 'The reason is I believe that the work it takes to go from 70 to 100 is 10 times harder than going from 0 to 70, and it doesn't really change the outcome. 'I believe that you can fix the plane as you fly it,' said de La Faverie, 'and at the speed with which the consumer is moving today, you need to be able to take a certain number of risks and that's what I'm trying to teach the company.' It's a philosophy that has been embraced by the Lauder family — which owns 38 percent of the company's equity and controls 86 percent of the voting stock — and the board of directors. 'The expression I've been using is not to ask why, but why not?' said William Lauder. 'How do we try new things, constantly experiment, make sure that we're not leaving anything off the table or limiting ourselves. In a challenging environment like everyone is facing right now, we have to continue to push the envelope, whether it's new retail formats or new forms of product or packaging or new ways of reaching the consumer. We can't say, 'we've done that' or 'we're doing fine and we don't even need to try.' We need to be trying and experimenting across the board.' Take Jo Malone London's recent signing of Tom Hardy to be the face of Cypress & Grapevine Cologne Intense. While the brand is technically a unisex brand, women comprise the majority of its consumer base. 'We felt we had a massive untapped opportunity with men, but we needed to make a bold move, so we took the biggest step change in the brand's history,' said Dancey, noting that Jo Malone has never had a brand ambassador or a paid media model. The plan worked, with Cypress & Grapevine jumping 40 ranks in less than a year and posting a 200 percent increase in sales, according to Dancy. 'Stéphane recognized the opportunity and backed it with investment,' she said. 'He pushed us to be bold, and that's what I'm most excited about as we enter the new era. He knows the direction of the path forward, and equally knows that he needs to energize and push people and he provides the confidence and support to do that.' Still, it's one thing to back a great marketing idea, and quite another to reignite the flames of innovation, which once fueled the growth of Lauder's biggest brands but got stuck on the back burner as the company prioritized a hero product strategy and iterated on classics like Estée Lauder's Advanced Night Repair, Clinique's Dramatically Different Moisturizing Lotion and MAC Studio Fix. 'One of the hallmarks of our company is our innovation, our creativity. The key is to build upon the strengths and culture upon which we were founded and modernize the company in ways we can propel it forward,' said Hertzmark Hudis. 'There are ways in which we need to be better and faster to market, and more innovative and more surprising in ways that delight our consumer. We have work to do.' Such a move is mission critical for the company if it hopes to capture Gen Zs and Alphas, a key demographic target in de La Faverie's plan, but one where Lauder has been losing steam. According to Piper Sandler's 49th semiannual Teen Survey, released in April, Too Faced dropped three spots to number 10 and MAC fell out of the top 20 altogether in the makeup category and Clinique fell six spots in skin care, while The Ordinary remained number two. Despite industry chatter that some of Lauder's brands are tired and out of touch, de La Faverie insists that he is happy with the portfolio, with no plans to divest underperformers like the hair care brands Aveda and Bumble and bumble and the so-called California brands, consisting of Too Faced, Smashbox and Glamglow. 'Our role as a pure play in luxury and prestige beauty is to recruit from mass and elevate the consumer through the pyramid,' said de La Faverie, who also said no acquisitions are currently in the works. 'The portfolio we have is perfectly tailored to do that.' The issue isn't the brands — it's the product strategy, he said. 'We've focused more on retention than acquisition,' said de La Faverie. 'We've been too dependent on continuing to reinvent what we do best, which is our heroes, but you need to make sure that at the top of the funnel you're bringing in a lot of new consumers and the consumer wants to see new things today.' To that end, de La Faverie has committed to tripling the number of innovations the company is bringing to market in the next 12 months, be it commercial innovations that ensure the brands are continually reinforcing their relevance; trend innovations that reflect what's happening across culture, and breakthrough innovations that tap into advanced science and research from both internal and external partners. 'He has the intention to leverage more the input he can get from people like us,' said Semerari. 'He's very interested in getting the outsider point of view on what is needed and how we would improve certain things and is an open-minded partner who involves us even beyond our normal role. His curiosity to learn more from external partners on what we're seeing and how we judge certain trends, using us as a source of information to nourish his vision, which is motivating for us and useful for him.' For example, de La Faverie invited Intercos to a company seminar at Oxford University last year, where he launched a challenge to the brands to bring innovation to market in six to nine months. 'We did a project for one of the brands in six months,' said Semerari. 'Stéphane doesn't stay on the theory on what general strategy needs to be. He jumps into action very quickly and this is the pragmatism that's going to do a lot,' said the Intercos CEO. De La Faverie, who was toggling between pursuing a career in tech and one in beauty after earning a BA in marketing and communications from INSEAD and a business degree from the Ecole Supérieure de Commerce in France, is also using AI as a force multiplier for innovation. In April, the company announced a new tool that it had developed in conjunction with Microsoft, their second collaboration, called ConsumerIQ to mine data from around the world on key trends, emerging trends and where we are in the life cycle. 'If you want to know what lip color is trending in Oregon, this can tell you,' said de La Faverie, 'and then the tool can analyze if we have this product in our portfolio in any of the brands that we can deploy in real time or if we have the claims to support it or if we need to go to R & D and create a product.' Lauder is also using AI to improve its operational acuity, from expediting safety testing to resource allocation, inventory planning and weighted forecasting. Already the impact of that is being seen on the business. 'One of the highlights of the P&L is the fantastic improvement in gross margin — 300 basis points,' said de La Faverie, who gets as animated about operating profit as he does about innovation. That breadth is one element that makes him unique, say those who work closely with him. 'He understands the business end-to-end, starting with the consumer,' said Hertzmark Hudis. 'Usually executives are either brand, marketing or innovation or they are commercial, driving. He really has both sides in equal measure and that's unusual.' Close friends also describe him as kind and optimistic, with a broad worldview informed by his global experience. 'He sees the world from many different points of view, which is important especially now because the world was one, and now all of a sudden it is lots of little satellites,' said his pal Diane von Furstenberg. 'Right now what the world needs is agility and strength and kindness, and he has all three of those characteristics.' Richard Zannino, lead independent director of the Estée Lauder Cos. board, agreed. 'Realizing our ambition to be the world's most successful consumer-centric prestige beauty company requires an inspirational leader with deep industry expertise, proven brand and business-building acumen, a competitive passion to win, a fresh vision for the future and the courage to drive the needed change to embrace the future,' he said. 'The board chose Stéphane to be president and CEO because he is that leader.' De La Faverie is going to need those characteristics as he grapples with the crisis in China, a problem that is plaguing all of beauty but especially acute for the Estée Lauder Cos., whose business has been slower to recover than its peers. The CEO seems unfazed by the size of the challenge, though, pointing out that China still represents 22 percent of the estimated 800 million people who will be rising into the middle class over the next five years globally. Lauder's second-quarter fiscal-year 2025 results trumpeted some recent wins in the region, including Estée Lauder rebounding in makeup, La Mer performing better in skin care and Le Labo and Jo Malone London both improving in fragrance. Still, skin care sales overall declined 12 percent, which the company attributed to the challenges in Asia-Pacific and travel retail, while the makeup category's 1 percent decline reflected the weakness of the Tom Ford brand in those markets, as well. 'China has rebalanced from being an emerging, fast-growth market to a mature market that is now one of the largest beauty markets in the world with a balance of internal and international brands,' said de La Faverie. 'The long-term potential remains strong. We are navigating the current volatility in the system, but great things are happening.' Best of WWD The Best Makeup Looks in Golden Globes History A Look Back at Golden Globes Best Makeup on the Red Carpet, From Megan Fox to Sophia Loren [PHOTOS] The Best Hairstyles in Golden Globes History
Yahoo
02-05-2025
- Business
- Yahoo
Estée Lauder's Beauty Gains Can't Offset Global Headwinds, Says Analyst
Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Estée Lauder Companies Inc (NYSE:EL) and lowered the price forecast from $76.00 to $66.00. Estée Lauder delivered a strong third-quarter earnings beat, driven by improved margins and cost control, with sales at the upper end of guidance. The company updated its FY25 outlook in line with prior estimates, though fourth-quarter EPS guidance came in below expectations. While its recovery plan is yielding positive results, ongoing pressures in Asia travel retail and a softening North American market prompt a reduced price target of $66. EL is adapting to trade policy uncertainty by regionalizing its supply chain to increase flexibility. About 75% of U.S. sales are now sourced domestically or through trade agreements, while reliance on China is being reduced in favor of Japan and Europe. : Wendy's Sizzles Abroad, But US Sales Leave Investors Cold The company is also optimizing manufacturing and local sourcing to mitigate risks. No major FY25 impact is expected, but prolonged tariffs could affect FY26. More updates are expected in August, noted the analyst. Estée Lauder brands are showing positive momentum, with Clinique leading U.S. market share gains for the 11th straight quarter. The company gained market share in three of four categories, with EL ranking top two in skincare and makeup. MAC and The Ordinary also improved. In China, multiple brands saw growth across all categories. While some emerging markets faced setbacks, trends are stable overall, with stronger performance expected in FY26. Factoring in the third-quarter results and current trends in the business, the analyst expects total reported sales to decline 8.5% YoY to $14.29 billion (from down 6.8% to $14.54 billion previously). In addition, on the bottom line, the analyst raised the FY25 EPS estimate to $1.55, up from $1.36 previously. Estée Lauder CEO Stéphane de La Faverie reaffirmed the company's "Beauty Reimagined" strategy during its third-quarter earnings call, highlighting early progress on five core priorities: expanding consumer reach, driving innovation, increasing marketing investments, enhancing efficiency, and rethinking operations. Price Action: EL shares closed higher by 0.85% to $59.39 on Friday. Read Next:Photo via Shutterstock Date Firm Action From To Feb 2022 Barclays Maintains Overweight Feb 2022 Morgan Stanley Maintains Overweight Feb 2022 JP Morgan Maintains Overweight View More Analyst Ratings for EL View the Latest Analyst Ratings UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? ESTEE LAUDER COS (EL): Free Stock Analysis Report This article Estée Lauder's Beauty Gains Can't Offset Global Headwinds, Says Analyst originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
02-05-2025
- Business
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The Estée Lauder Cos. Forecasts 9 Percent Drop in Sales in 2025, but Expects Return to Growth Next Year
Updated as of 5:30 p.m. on Thursday. The Estée Lauder Cos. has finally delivered a new full-year outlook to the market. More from WWD Beauty Brands Accelerate Their Formula 1 Drive Estée Lauder Brings Skin Longevity Concept to Costa Rica The 10 Best Body Sprays for Women to Mist on This Summer After scrapping its previous forecast in October, Estée Lauder said it expects sales to drop by as much as 9 percent in 2025 on the back of continued weakness in Asia and travel retail, but sees a return to growth next year if 'there is meaningful resolution of the recently enacted tariffs.' The bigger-than-expected annual drop comes on the back of a forecasted stronger double-digit net sales decline in the company's global travel retail business in the fourth quarter compared to the third quarter when travel retail declined 28 percent organically. It continues to shrink as a percentage of the business toward the low teens. Lauder also expects a high-single-digit organic net sales decline in Asia-Pacific for fiscal 2025, primarily driven by ongoing subdued consumer sentiment from Chinese consumers and the impact of the company's strategic exit of from the travel retail channel in Korea. Stéphane de La Faverie, president and chief executive officer, said: 'With the strategic reset of our travel retail business well underway to better reflect recent industry trends and market conditions, and provided there is meaningful resolution of the recently enacted tariffs to mitigate potential related negative impacts, we are confident in our ability to return to sales growth in fiscal 2026.' On the subject of tariffs, Akhil Shrivastava, executive vice president and chief financial officer at Lauder, added that it does not expect a material impact of fiscal 2025 profitability. But he stressed that 'unless meaningful resolution of trade negotiations is achieved, we do anticipate the high rate of tariffs to have a material impact in fiscal 2026.' As a result, Lauder is exploring additional cost savings and strategic pricing to help further mitigate some of these impacts and plans to provide more details in its August earnings call. At the beginning of April, President Donald Trump unveiled sweeping punitive tariffs on around 60 countries, sending the markets into a tailspin. He later stepped back, authorizing a 90-day pause — 'and a substantially lowered reciprocal tariff during this period' of 10 percent. Still, he upped import duties on China-made goods to 145 percent. Currently, 75 percent of what Lauder sells in the U.S. is either sourced from its manufacturing plants in the U.S. and Canada or covered under existing trade agreements. Roughly 25 percent of what it sells in China is sourced from its manufacturing plants in the U.S. 'We have strategies to potentially reduce that to below 10 percent, including leveraging products made in our manufacturing plants in Japan,' said Shrivastava. This comes as the third-quarter numbers came in better than expected, although all categories and geographies saw declines. Net sales for the third quarter decreased 10 percent to $3.6 billion, while organic net sales fell 9 percent. Analysts had forecast net sales of $3.52 billion. Adjusted diluted net earnings per common share decreased to 65 cents, compared with 97 cents, but above Wall Street forecasts for 29 cents. Skin care net sales slid 11 percent, primarily due to the decrease in the company's Asia travel retail business, which drove declines from Estée Lauder and La Mer. Makeup net sales decreased 7 percent, driven by declines from MAC, reflecting an unfavorable impact from the timing and lower level of shipments for new product launches compared to the prior-year period. Fragrance net sales fell 1 percent, dragged down by the Clinique Happy product franchise, and Estée Lauder retail softness at retail in Asia-Pacific. Hair care net sales decreased 10 percent. On a geographical basis, net sales in the Americas dropped 5 percent, by 16 percent in Europe, Middle East and Africa and 1 percent in Asia-Pacific. In February, Lauder announced plans to ramp up its restructuring program, part of the so-called profit recovery plan, and will eliminate between 5,800 and 7,000 positions. This includes the 3,000 already announced and is expected to be executed in fiscal 2025 and 2026 and completed in fiscal 2027. De La Faverie said that as of late April, it had approved initiatives to reduce more than 2,600 net positions. Best of WWD The Best Makeup Looks in Golden Globes History A Look Back at Golden Globes Best Makeup on the Red Carpet, From Megan Fox to Sophia Loren [PHOTOS] The Best Hairstyles in Golden Globes History Sign in to access your portfolio
