Beauty Sales: $10.8 billion
Key Personnel: William P. Lauder, executive chairman; Fabrizio Freda, president and chief executive officer; John Demsey, group president; Carl Haney, executive vice president, global research and development, corporate product innovation, package development; Leonard A. Lauder, chairman emeritus; Ronald S. Lauder, chairman, Clinique Laboratories, LLC; Cedric Prouvé, group president, international; Alexandra C. Trower, executive vice president, global communications.
Major Products/Brands: Prestige cosmetics, skin care and fragrances, including Estée Lauder, Aerin, Bobbi Brown, La Mer, Tom Ford, MAC, Prescriptives, Jo Malone, Smashbox, Clinique, Origins, Glamglow, Ojon, Aramis, Tommy Hilfiger, Kiton, Donna Karan, Michael Kors, American Beauty, Flirt!, Coach, Ermeneglido Zeda, GoodSkin, Grassroots, Lab Series, Aveda, Bumble and Bumble, Darphin, Le Labo, Rodin Olio Lusso, GlamGlow.
New Products: Estée Lauder Double Wear, Estée Lauder Modern Muse Le Rouge, Aerin Rose de Grasse fragrance, Clinique Pretty Easy Liquid Eyelining Pen, MAC Haute Dogs Collection, GlamGlow SuperMud Clearing Treatment, Tom Ford Neroli Portofino.
Comments: As a company that specializes in skin care and makeup, The Estée Lauder Companies (ELC) has been undergoing a mini makeover of its own over the last year, striving to draw in larger numbers of millennial consumers, as it continues to successfully expand its key performers including MAC, Jo Malone, Aveda and Tom Ford.
The company’s year-end report—which showed a 2% drop, may have been somewhat attributed to a slack-off in interest in heritage brands Estée Lauder and Clinique, as well as currency fluctuations and other problems that plagued most of this year’s Top 20 Companies.
Still, for the fiscal year ended June 30, 2015, ELC achieved net sales of $10.78 billion, compared with $10.97 billion in the prior year. Net earnings for the year were $1.09 billion, compared with $1.20 billion last year. Excluding the impact of foreign currency translation, net sales increased 3%.
Upon releasing the year-end results, Fabrizio Freda, president and chief executive officer, said, “One of the great strengths of our company is our ability to successfully execute our well-defined strategy. This was clearly evident in fiscal 2015 as we once again delivered strong results despite considerable macroeconomic headwinds and challenges. For the full year, our adjusted 6% local currency sales growth met our expectations, and we exceeded our earnings per share forecast. These results speak to the strength of our underlying business across brands, product categories, geographies and channels.”
Freda said ELC sales grew at a faster rate than global prestige beauty, due to their “multiple engines of growth.” Double-digit sales gains were achieved in a large portion of makeup and luxury brands and in online, specialty-multi and freestanding store channels. Emerging markets, the UK and growth in certain developed markets were also key performance drivers.
News of Note
During the year, ELC worked at strengthening and diversifying its portfolio, which includes 25 brands sold in 150 countries, and acquired four prestige beauty brands—Le Labo, Rodin Olio Lusso, Editions de Parfums Frédéric Malle and GlamGlow. They also selected a couple of influential, young beauty icons as brand representatives.
In continuing efforts to “youthify” the Estée Lauder brand, ELC first signed Eva Mendes as the new face of Estée Lauder New Dimension Skincare. The collection launched at all Estée Lauder counters in July 2015.
Next, 19-year-old supermodel and it-girl-of-the-moment Kendall Jenner was tapped to represent the brand—mostly via the color red. First it was red lipstick; now Jenner is wearing a smoking hot red dress to help to launch Estée Lauder’s new perfume, Modern Muse Le Rouge. The flanker bottle and cap features a red bow on top with Le Rouge printed in a matching hue.
In May, global leader MAC, which sells four lipsticks a minute in Latin America (despite a slump in Brazil and Mexico), announced plans to operate more than 220 doors there by 2018 and grow 40% this year via an ambitious expansion.
In June, ELC appointed Guillaume Jesel to the position of senior vice president/global general manager, Tom Ford Beauty, which is about to launch in China. In this role, he leads the global beauty brand, working directly with Tom Ford, and reporting to John Demsey, group president, The Estée Lauder Companies.
Demsey commented: “Guillaume has already had a major impact on the brand, and we are confident that his leadership skills and his experience in the world of cosmetics will help this brand grow into a major powerhouse.”
With an eye on FY 2016, Freda, said ELC is well-positioned for continuing growth in the global prestige beauty marketplace. He explained, “In fiscal 2016, we expect constant currency net sales growth of 6% to 8% and double-digit earnings per share growth, after adjusting for the accelerated sales orders.”