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Est\u00e9e Lauder<\/strong><\/b> is looking for its new winning model.<\/p>\n <\/p>\n The American group specializing in prestige beauty<\/strong><\/b> has just announced both a below-expectations forecast for its 2023-24 results<\/strong><\/b> and the departure at the end of 2025 of its historic CEO, Fabrizio Freda<\/strong><\/b>, who has been at the helm for 16 years.<\/p>\n <\/p>\n Despite a better-than-expected fourth quarter<\/strong><\/b>, the owner of brands such as Est\u00e9e Lauder, Bobby Brown, Clinique, La Mer, Jo Malone, The Ordinary and Tom Ford<\/strong><\/b> (among others) closed its 2023-24 financial year<\/strong><\/b> on June 30, badly affected by the Chinese market and Travel Retail.<\/strong><\/b><\/p>\n <\/p>\n <\/p>\n Sales<\/strong><\/b> fell by 2%<\/strong><\/b> to $15.6 billion in 2023-24, despite an 8% surge in sales<\/strong><\/b> to $871 million in the final quarter.<\/strong><\/b><\/p>\n\n <\/p>\n In more detail for the full year, only fragrance sales rose (+2%)<\/strong><\/b>, while beauty products (-3%), hair care (-4%) and make-up (-1%)<\/strong><\/b> were down. Net profit<\/strong><\/b> fell to $0.39 billion<\/strong><\/b>, compared with $1.01 billion the previous year.<\/p>\n <\/p>\n These under-performances are linked both to the slowdown in the Chinese luxury goods market, particularly in travel retail,<\/strong><\/b> and to a sluggish domestic market across the Atlantic<\/strong><\/b>.<\/p>\n <\/p>\n Following the announcement of its results on August 19, Est\u00e9e Lauder shares fell back slightly<\/strong><\/b>. Since hitting a record high <\/strong><\/b>of $374.20 in January 2022, it has plummeted by almost 75%<\/strong><\/b>, with demand affected by inflation and a suffering China.<\/p>\n <\/p>\n The Group is obviously reacting to avoid slipping further down the slope.<\/p>\n <\/p>\n <\/p>\n On Monday August 19, the same day as the group’s results, Fabrizio Freda, Est\u00e9e Lauder’s CEO since 2009, announced his retirement at the end of 2025. <\/strong><\/b>This represents a real change of governance and era<\/strong><\/b>, while last July, CFO<\/strong><\/b> Tracey Travis had already announced her departure<\/strong><\/b> in June 2025 after 12 years in the post.<\/p>\n <\/p>\n Together, we have transformed the company in a beautiful way, and set new standards of excellence,\u201d said Fabrizio Freda<\/strong><\/b>. As we apply long-termist management,the time has come to look to the next generation of leaders<\/strong><\/b> of this great company.\u201d<\/p>\n <\/p>\n The Board of Directors has already considered \u201cnumerous highly qualified internal and external candidates<\/strong><\/b>\u201d to succeed Fabrizio Freda. Upon his appointment, Freda will work alongside him to ensure a smooth transition<\/strong><\/b>, and will remain available as an advisor in 2026.<\/p>\n <\/p>\n In the meantime, the current CEO will continue to direct and oversee the company’s strategic, financial and investment priorities. And in particular, a profit growth and recovery plan (PRGP)<\/strong><\/b> aimed at outperforming the global prestige beauty industry.<\/p>\n <\/p>\n <\/p>\n The company plans to focus on skincare, high-end fragrances, conquering fast-growing channels and precision marketing.<\/strong><\/b><\/p>\n <\/p>\n However, it expects a soft relaunch.<\/p>\n <\/p>\n During a conference call with analysts following the publication of the results, CFO Tracey Travis announced that profits should increase in fiscal 2024-2025,<\/strong><\/b> mainly thanks to the turnaround plan, but also to growth in the Americas, Asia-Pacific excluding China and Europe. The Group does not, however, expect retail sales of travel products to improve.<\/p>\n <\/p>\n Instead, it expects annual sales to evolve in a range of only -1% to +2%<\/strong><\/b>, whereas analysts were expecting a 6.4% increase,<\/strong><\/b> according to LSEG data. According to Est\u00e9e Lauder, the Group will therefore be less dynamic than the global prestige beauty sector<\/strong><\/b>, which is expected to grow by 2-3% over the same period.<\/p>\n <\/p>\nChinese market and travel retail at half-mast<\/h2>\n
Change of era<\/h2>\n
Gentle relaunch<\/h2>\n
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