The Estée Lauder Companies Inc.

Sector: Beauty Countries of operation: Australia, China, the UK, the US and 146 other countries. Key product categories: Fragrance, hair care, makeup and skin care Annual Metrics [caption id="attachment_149056" align="aligncenter" width="700"] Fiscal year ends June 30 of the same calendar year
*Trailing 12 months ended March 31, 2022
**Organic sales growth in third quarter of fiscal 2022[/caption]   Summary The Estée Lauder Companies manufactures and markets fragrance, haircare, makeup and skincare products. The company was founded by Estée and Joseph Lauder in 1946 and is headquartered in New York City. The company’s products are sold in over 150 countries under brand names including Aveda, Bobbi Brown, Clinique, Estée Lauder, Jo Malone London, La Mer, MAC, Origins and Too Faced. The company identifies itself as a world leader in the beauty industry due to its brands’ global recognition, product innovation, strong position in numerous geographical markets and high-quality products and services. It operates 1,600 stores as of June 30, 2021. Company Analysis Coresight Research insight: Estée Lauder is a leading company in the cosmetic industry and its products are sold around the world. The company has a reputation for selling high-quality products under prestigious brands through a combination of authorized freestanding stores, beauty salons and spas, department stores, perfumeries, online retail stores and specialty multi-brand retailers, as well as duty free stores in airports, cruise ships and on flights. The company sells through a selective distribution channel, enabling it to offer bestselling product lines at its stores and online. This also allows the company to reinforce its relationship with customers and retailers, and increase the aspirational quality of its brands. Meanwhile, it continues to build its presence in emerging markets, bringing its brands and products to new consumers worldwide. That being stated, the pandemic continues to impact the company’s operating environment, with its stores and travel retail facing disruptions. The company has also been affected by shifts in consumer preferences, including a decline in makeup purchasing. Despite disruptions, particularly in brick-and-mortar channels, net sales through digital platforms remained strong in the company’s last fiscal year (ended June 30, 2021), including on its own websites, third-party platforms and retailers’ websites. The company aims to increase long-term stockholder value by continuing to provide high-quality products and services effectively and efficiently—and acknowledging and responding to shifting consumer preferences and purchasing behavior.

Tailwinds	Headwinds
Global brand reputation associated with prestige and quality that continues to grow Multiple product distribution channels and a promising digital platform Historically strong product marketing with endorsements from celebrities that increase brand visibility	Competitors could jeopardize its market share if the company does not innovate and debut new product lines Changing consumer behavior and preferences could impact sales of its products in retail stores and physical outlets

  Strategy Estée Lauder continues to position itself as the leading brand in the beauty industry through constant innovation in its products and business strategies. Per the annual report for the fiscal year ended June 30, 2021, the company looks to focus on three key areas in fiscal 2022: 1. Expand brands online and via travel retail:

• Focus on brand-building retail activities online and in travel retail—though the latter was negatively impacted by the pandemic, the company still considers it a high-growth channel in the long term
• Increase long-term stockholder value by developing superior products and services
• Focus on technology-driven brand activation that enhances consumer shopping experiences

2. Complete its two-year Covid-19 Business Acceleration Program (announced August 2020):

• Accelerate the shift to online by realigning the company’s distribution network, following closures of freestanding stores and select department stores, focusing on North America, Europe, the Middle East and Africa
• Reduce brick-and-mortar point-of-sale employees and related support staff
• Redesign regional-branded marketing organizations, opting for global brands and functions

3. Develop and implement new concepts to improve customer experience:

• Innovate and introduce new omnichannel concepts, including virtual try-on tools
• Leverage creativity and innovation capabilities for long-term sustainable growth

Revenue Breakdown (FY21)   Company Developments

Date	Development
July 11, 2022	The Estée Lauder Companies announces that Angela Wei Dong has been elected to its Board of Directors and the company’s Audit Committee, effective July 11, 2022. Dong is the Global Vice President and General Manager, Greater China, at NIKE, Inc.
June 17, 2022	The Estée Lauder Companies announces key leadership updates. Amber Garrison has been named Global Brand President of Origins and Corey Reese has been promoted to Senior Vice President, GM, of Bumble and bumble. Both will report to Jane Hertzmark Hudis, Executive Group President, and serve on the company’s Executive Leadership Team.
May 4, 2022	Estée Lauder, through its Estée Lauder Companies Charitable Foundation, launches the Emerging Leaders Fund, a charitable fund to advance the next generation of women redefining leadership.
May 3, 2022	Estée Lauder reports third quarter fiscal 2022 results: net sales increased 10%, and diluted EPS rose 24% to $1.53.
April 25, 2022	Estée Lauder elects Arturo Nuñez to the Board of Directors.
February 10, 2022	Estée Lauder forms strategic partnership with Farmingdale State College to support STEM education and job opportunities.
February 3, 2022	Estée Lauder reports fiscal 2022 second quarter results. Net sales increased 14% and diluted EPS rose 25% to $2.97.
February 1, 2022	Estée Lauder appoints Daniel Mahler to expanded role as EVP, Strategy and Transformation.
November 16, 2021	Estée Lauder announces new leadership appointments in Asia Pacific and elevation of China.
November 16, 2021	Estée Lauder joins Pulpex Partner Consortium to develop prestige beauty’s first widely recyclable paper bottle.
November 2, 2021	Estée Lauder releases fiscal 2021 Social Impact and Sustainability Report, highlighting progress towards global goals, and sets new PCR and virgin plastic packaging targets.
November 2, 2021	Estée Lauder reports fiscal 2022 first quarter results. Net sales increased 23% and diluted EPS rose 32% to $1.88.
October 28, 2021	Estée Lauder joins the International Space Station National Lab’s Sustainability Challenge as exclusive partner.
September 15, 2021	Clinique and Estée Lauder leverage sustainable packaging technology with Roctool.
August 19, 2021	Estée Lauder releases fiscal 2021 annual report. Full year net sales increased 13% and diluted EPS increased to $7.79 from $1.86.
July 20, 2021	Estée Lauder announces promotion of Daniel Mahler to Executive Vice President, Global Transformation and Category Leadership, effective July 1, 2021.
July 15, 2021	Estée Lauder announces promotion of Sue Fox to President, UK and Ireland, effective immediately.
July 1, 2021	Estée Lauder appoints Michelle Freyre to Global Brand President, Clinique, and Glenn Evans as Global Brand President, Smashbox and GLAMGLOW, effective July 1, 2021.
May 18, 2021	Estée Lauder completes the acquisition of an additional 47% stake in DECIEM Inc.
May 11, 2021	Estée Lauder announces Meridith Webster will join the company in the newly created role of Executive Vice President, Global Communications and Public Affairs, effective May 17, 2021.
April 12, 2021	Estée Lauder announces Alexandra Trower, Executive Vice President, Global Communications, will retire effective July 1, 2021
March 30, 2021	Estée Lauder and specialty materials provider Eastman announce a global memorandum of understanding (MOU), enabling Estée Lauder to take significant strides toward its 2025 sustainable packaging goals.
March 16, 2021	Estée Lauder expands its technology presence globally by establishing new digital technology centers in key locations around the world, beginning with Bucharest.
March 4, 2021	Estée Lauder establishes new Equity and Engagement Center of Excellence (COE) to build greater equity and representation within every aspect of its business, from its employees to its consumers.
March 1, 2021	Estée Lauder announces that it will offer $600 million aggregate principal amount of 1.95% Senior Notes due 2031 and states their cost.
February 23, 2021	Estée Lauder agrees to increase its investment in the Canadian-based, vertically integrated, multi-brand company, DECIEM Beauty Group Inc. from 29% to 76%.
January 27, 2021	Estée Lauder forms partnership with Howard University to support the university’s alumnae through career coaching, experiential learning, professional training and self-empowering mentorship opportunities.
January 26, 2021	Estée Lauder establishes new sustainability goals for travel retail.
January 25, 2021	Estée Lauder announces Gregory F. Polcer, Executive Vice President, Global Supply Chain, will retire effective July 1, 2021. He will be succeeded by Roberto Canevari and will assume the role, effective May 1, 2021.
January 14, 2021	Estée Lauder appoints Dave Smith to Senior Vice President, New Business Development.

  Management Team

• William Lauder—Executive Chairman
• Fabrizio Freda—President, CEO and Director
• Tracey Thomas Travis—Executive Vice President and CFO
• Peter Jueptner—President, International
• Mark Loomis—President, North America
• Joy Fan—President and CEO, China
• Dave Smith—Senior Vice President, New Business Development
• Roberto Canevari—Executive Vice President, Global Supply Chain

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Source: Company reports/S&P Capital IQ