Estée Lauder – A Winner This Holiday Season And Into The Future

The Estée Lauder Companies
EL
is a global leader in beauty – it operates in a dynamic and vibrant industry benefitting from favorable demographic trends. Company success comes from managing a carefully balanced and diversified portfolio of businesses powered by multiple engines of growth by region and product category. It is the only major company focused solely on prestige beauty.

Estée Lauder has been in business for over 75 years. The company was founded by Estée Lauder and her husband in 1946 and has grown in sales to $15.9 billion in fiscal 2023 (the fiscal calendar ended in mid-year 2023).

The Lauder family’s approach has always encouraged company leadership to focus on long-term sustainable growth. In 2009, the management of the company was turned over to Fabrizio Freda. Nonetheless, the 15-person board of directors continues to include 4 Lauder family members: William Lauder, executive chairman of the board; Ronald Lauder, chairman Clinique Holding; Jane Lauder, EVP Enterprise marketing and chief data officer; and Gary Lauder, Managing Director Lauder Partners. Until recently, Leonard Lauder was also still active in the company as Chairman Emeritus.

This first quarter of 2024 reflected an earnings shortfall that many members of the company attributed to global uncertainties, including concerns about mainland China, Israel, and the overall Middle East. All of these markets saw a sales slowdown in the quarter. However, it is likely that the demand for beauty in general, and Estée Lauder luxury products in particular, will make second quarter sales and earnings rebound and be stronger. While lavish gifts may be somewhat curtailed this year due to economic fear, everyone will get a Christmas gift and for many nothing is more satisfying than giving (and receiving) a cherished Estée Lauder gift.

Here are the 24 Estée Lauder brands, and I list them all here: Aerin Beauty, Aramis, Aveda, Bobby Brown Cosmetics, Bumble and bumble, Clinique, Darphin Paris, Deciem, Dr.Jart+, Edition de Parfums Fredéric Malle, Estée Lauder, GLAMGLOW, Jo Malone London, Kilian Paris, La Mer, Lab Series, Le Labo, M*A*C, Niod, Origins, Smashbox, The Ordinary, Tom Ford Beauty, and Too Faced. It is an impressive brand mx, and the strength of the individual brands is superb.

Yes, here is a lot of competition. Many new brands are introduced, and they often carve out a niche for themselves. There are two major companies, L’Oreal and Unilever, that have greater revenues in beauty than Estée Lauder. Procter & Gamble
PG
, Shiseido, and Beiersdorf have somewhat smaller revenues than Estée Lauder.

POSTSCRIPT: Many years ago, I had lunch with Leonard Lauder when he was still CEO of the company. He explained to me how the team would carefully match a scent with a famous name (designer) and how the flask that perfume is packed in matters. As a matter of fact, he thought that sometimes the container helped popularize the product. This conversation helped me appreciate that every aspect of product development (from scent or ingredient mix for cosmetics to decisions regarding packaging and alignment with the appropriate designer or brand name) matters and must be carefully considered. I even learned that the subtle scents often were the most popular and enduring. And, I realized Leonard was a great leader for his company and established a legacy for success that continues.