Below is a look at the company's 2019 highlights, recent acquisitions, best selling brands and latest innovations.
- William P. Lauder, executive chairman
- Fabrizio Freda, president and chief executive officer
- John Demsey, executive group president
- Carl Haney, executive vice president, global research and development, corporate product innovation, package development
- Jane Hertzmark Hudis, group president
- Leonard A. Lauder, chairman emeritus
- Ronald S. Lauder, chairman, Clinique Laboratories
- Nancy Mahon, Senior Vice President, Global Corporate Citizenship and Sustainability
- Gregory F. Polcer, executive vice president, global supply chain
- Cedric Prouvé, group president, international
- Aerin Lauder, founder and creative director, AERIN, and style and image director, Estée Lauder
- Jane Lauder, global brand president, Clinique
- Sara E. Moss, vice chairman
- Deirdre Stanley, executive vice president and general counsel
- Estée Lauder, Aramis, Clinique
- Prescriptives, Lab Series, Origins
- Tommy Hilfiger, M•A•C, Kiton
- La Mer, Bobbi Brown, Donna Karan New York
- DKNY, Aveda, Jo Malone London
- Bumble and bumble, Michael Kors, Darphin
- Tom Ford, Smashbox, Ermenegildo Zegna
- AERIN, Tory Burch, RODIN olio lusso
- Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW
- By Kilian, BECCA, Too Faced
- Estée Lauder Advanced Night Repair Eye Supercharged Complex
- La Mer Luminous Lifting Cushion Foundation
- MAC Love Me Lipstick Collection
- Tom Ford Skin Revitalizing Concentrate
- Tom Ford Research Serum Concentrate
- Tom Ford Métallique fragrance
Prestige Beauty continues to reign worldwide and The Estée Lauder Companies continues to profit. Net sales of $14.9 billion in 2018 increased 9% from the previous year’s $13.68 billion, with growth in international business and nearly all product categories. Net earnings rose to $1.79 billion from $1.11 billion in 2018. Net sales were strongest in the Europe, Middle East, Africa region, reaching $6.5 billion; followed by The Americas, with $4.7 billion; and Asia/Pacific with $3.7 billion. Net earnings rose to $1.79 billion from $1.11 billion last year.
Commenting on the results, Fabrizio Freda, president and chief executive officer, said: “Fiscal 2019 was an outstanding year for our company. We achieved strong net sales gains across our business, fueled by investments in our strategic priorities, including improved data analytics that helped power our innovation and digital marketing.”
He added: “With savings from our Leading Beauty Forward initiative and cost discipline throughout the organization, we grew profit far ahead of our net sales growth, while also investing in our strategic priorities.”
Freda attributed strong growth to the Asia/Pacific region (which grew double digits); skincare, in every region; the travel retail and online channels globally; and “compelling innovations and high-quality products, which drove strong repeat purchases.”
Globally, both large, mid-sized and small brands experienced good results.
By product category, Skincare led with $6.6 billion, followed by Makeup with $5.9 billion.
Skincare net sales grew across most regions, led by Estée Lauder and La Mer. The Estée Lauder brand delivered double-digit net sales growth in all regions and nearly all channels of distribution.
The bulk of the increase was seen in key franchises, including Advanced Night Repair, Perfectionist, Nutritious, Micro Essence and Revitalizing Supreme. La Mer attracted a double-digit leap.
In Makeup, sales growth was attributed to Estée Lauder, MAC, Tom Ford Beauty and La Mer. Too Faced was also a contributor. These increases were partially offset by lower net sales from Clinique and Smashbox. MAC, Tom Ford Beauty and La Mer all achieved double-digit growth.
Luxury fragrance got a boost from Jo Malone London and the brand’s expanded targeted consumer reach in Asia/Pacific.
Aveda accounted for higher hair care net sales, especially with online sales of collections including Cherry Almond Softening Shampoo and Conditioner and the Rosemary Mint and Shampure product lines.
Freda explained, “Importantly, this year’s results cap a remarkable decade of strategic and operating achievements. Since launching our current strategy in 2009, we have diversified and strengthened our company, creating a solid foundation to continue our growth. “We ended the year with a strong fourth quarter, driven largely by the same growth engines we had throughout the year. Additionally, we saw modest improvement in our U.S. business despite a tough retail environment.”
News of Note in 2019
In March, the company announced increased usage of post-consumer recycled material in its packaging, targeting a level of 50% by 2025. Additionally, it said that by that same time, goals are for about 75-100% of its packaging to be recyclable, reusable, recycled or recoverable.
In June, Freda was named to the prestigious Barron’s list of the World’s Best CEOs of 2019, specifically to the “growth leaders” category, for the second consecutive year.
All eyes are now on Tom Ford to become another billion-dollar producer for ELC, especially with the luxe brand’s foray into serious “scientific skincare,” developed in the fashion-and-beauty designer’s own labs.
The future looks bright, although somewhat uncertain, according to Freda, who says, “Prestige beauty continues to be one of the most desirable consumer sectors. As the best diversified pure play in the industry, we are uniquely positioned to capture global share. In fiscal 2020, we plan to continue to invest in the most compelling opportunities, including those in emerging markets beyond China. We expect another year of strong net sales growth, margin improvement and a double-digit increase in earnings per share.”
The company expects global prestige beauty to grow approximately 6-7% during the fiscal year, “assuming no additional geopolitical risk materializes.” However, the company says it is mindful of risks related to social, economic and political issues, including “geopolitical tensions, regulatory matters, global security issues, currency volatility and economic challenges that could affect consumer spending in certain countries and travel corridors.” Noted risks include: continued softness of brick & mortar retail in the U.S. and UK, especially in the makeup category; costs associated with the anticipated Brexit in the UK; escalation of trade tensions and tariffs between the U.S. and China; and protests in key shopping areas in Hong Kong.
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