Beauty Sales:

Key Executives at ELC

• William P. Lauder, executive chairman
• Fabrizio Freda, president and chief executive officer
• Roberto Canevari, executive VP, global supply chain
• Stéphane de La Faverie, executive group president
• Justin Boxford, global brand president
• Carl Haney, executive VP, research/product/innovation
• Jane Hertzmark Hudis, executive group president
• Peter Jueptner, president, international
• Jane Lauder, executive vp, enterprise marketing/chief data officer
• Leonard A. Lauder, chairman emeritus
• Ronald S. Lauder, chairman, Clinique
• Sam Cheow, SVP, global trends/makeup product development/innovation 
• Nancy Mahon, chief sustainability officer
• Guillaume Jesel, president and CEO
• Tom Ford, Balmain Beauty / luxury business development

ELC Products

• Estée Lauder, Aramis, Clinique, Lab Series
• Origins, M·A·C, La Mer, Bobbi Brown Cosmetics
• Aveda, Jo Malone London, Bumble and bumble
• Darphin Paris, Tom Ford, Smashbox, Aerin Beauty
• Le Labo, Editions de Parfums Frédéric Malle, Glamglow, Killian Paris
• Too Faced, Dr.Jart+, Deciem's The Ordinary and Niod

New Products

• La Mer The Treatment Lotion
• Clinique Smart Clinical Repair Wrinkle Correcting Serum
• Too Faced Crowd Crush Blush and Cheek Popper 
• MAC Studio Radiance Serum-Powered Foundation
• Estée Lauder Double Wear Sheer Long-Wear Makeup
• Jo Malone House of Roses and the Blossoms Collection, Thé Matcha 26
• Aveda Color Control Leave-In Treatment

Acquisitions:

• Tom Ford Beauty
• Balmain Beauty (2024)

Sales Outlook

Net earnings for the fiscal year declined to $1.01 billion, from $2.39 billion in the prior year. In Q4 of FY23, ELC reported net sales of $3.61 billion, up 1% compared to the corresponding period in fiscal 2022. Driven by strong growth in Asia/Pacific, the company’s organic net sales increased 4%.

Upon issuing the annual report, Estée Lauder president and chief executive officer Fabrizio Freda said:

“We returned to organic sales growth in the fourth quarter, delivering our outlook. Momentum continued in the markets of EMEA and Latin America and accelerated strongly in Asia/Pacific led by mainland China and Hong Kong SAR.

“For full-year fiscal 2023, we delivered organic sales growth and prestige beauty share gains in many developed and emerging markets, but Asia travel retail pressured results, particularly in Skin Care, and we continued to experience softness in North America. Fragrance excelled, up double digits in every region, and Makeup improved sequentially to double-digit growth in the fourth quarter as more markets emerged into the post-pandemic era.”
 

Tracking Sales, By Category & Brand

Net sales by product category were: Skincare (52%; $8.2 billion); Makeup (28%; $4.5 billion); Fragrance (16%; $2.5 billion); Hair Care (4%; $650 million). 

Other than the negative impact from Covid in Asia, ELC says the recovery from the pandemic elsewhere progressed across markets globally over the course of the fiscal year as restrictions lifted. In the West, they reported strong organic net sales growth in nearly all markets in EMEA and in Latin America. In Asia/Pacific, ELC’s markets delivered “broad-based organic net sales growth throughout the region.”
 


In the U.S., organic net sales growth was unfavorably impacted by the slower than anticipated pace of ELC’s improvement at retail and the tightening of inventory by certain retailers in the first half of fiscal 2023 due to inflationary pressures and recession concerns. In addition, the company’s business was also pressured by the strong U.S. dollar, inflation and recession concerns globally.


Skincare net sales fell 14%, primarily due to the dip in Asia travel retail, as previously mentioned. Net sales declined for Estée Lauder, La Mer and Dr.Jart+, partially offset by strong growth from The Ordinary, M·A·C and Bobbi Brown Cosmetics.
 


Makeup net sales were flat compared to the prior year and performance increased sequentially each quarter, to growth of 13% in the fiscal 2023 fourth quarter, reflecting growth in most markets and a return to social experiences as Covid waned.

Net sales growth from M·A·C and Clinique was offset by the declines from Estée Lauder, TOM FORD and La Mer.
 
Fragrance net sales rose 14%, reflecting double-digit growth across every region and led by TOM FORD, Estée Lauder and Le Labo.
 
Hair Care net sales rose 6%, primarily reflecting growth from both The Ordinary, due to the recent launch of the brand’s hair care products, and Aveda.
 

By Geographic Region 

The Americas accounted for $4.5 billion; Europe, the Middle East & Africa, $ 6.2 billion; and Asia Pacific, $5.2 billion.
 

ELC 2022-2023 Highlights

Thinking outside the box and hedging its beauty bets with fashion trends, at the end of 2022, The Estée Lauder Companies Inc. announced it would acquire luxury brand Tom Ford for $2.3 billion.

The deal ended a months-long rumor, in which ELC beat out Kering for the largest luxury acquisition of the year. ELC subsequently licensed the premium brand (fashion and eyewear) to Ermenegildo Zegna Group and Marcolin S.p.A. The acquisition was completed in March 2023, and ELC became the first global beauty brand to own a global fashion brand.

In May, as ELC lowered its annual year expectations, the company was hit with rumors of a Nelson Peltz overhaul plan and a possible ousting of CEO Freda—both later proved false.

In June, ELC announced the launch of a new Responsible Store Design Program developed “to advance progress toward its environmental targets while engaging its consumers in the journey.” The first Origins store in this style has been completed.

In July, the global beauty company confirmed that an unauthorized third party had gained access to some of its systems in a cybersecurity attack.

In August, 90-year-old Chairman Emeritus Leonard A. Lauder informed The Estée Lauder Companies that he would not stand for re-election to the company’s board of directors at the annual meeting in November. His son William, executive chairman of ELC, and younger son Gary Lauder, manager of a VC firm, will step in.

Also in August, MAC launched a new liquid foundation, its first in a decade. MAC’s Studio Radiance Serum-Powered Foundation combines the hydrating benefits of a serum with a liquid foundation to deliver ‘expensive-looking skin’. Available in 56 shades, the hybrid product was five years in the making.

At press time, looking to gain ground in Asia, ELC invested in Code Mint, a Chinese homegrown clean beauty brand founded in 2021 by influencer Grace Chow. It is reportedly the international beauty giant’s first investment in a Chinese brand. 
 

Looking Ahead

For full year 2024, the company says it anticipates net sales to increase between 5% and 7% from the previous fiscal and organic sales to grow between 6% and 8%.

Then, over the next few years ELC plans to “progressively rebuild its margins.” It also plans to continue to strategically invest in areas to support recovery, share gains and long-term profitable growth.
 
Reported net sales for fiscal 2024 are forecasted to increase between 5% and 7% versus the prior year.