06.17.11
Fabrizio Freda is giving the Estée Lauder family, Wall Street analysts and stock holders a reason to smile. Nearly two years after being named president and chief executive officer at Lauder, Fred has shifted the company's focus to look outside North America, expanding around the globe and particularly in Asia. Meanwhile, Freda has cut costs, put underperforming brands and divisions under the microscope, consolidated Lauder’s global infrastructure and hunted for growth across new markets and categories.
As a result, Lauder’s stock bounded to a high of more than $100 earlier this week, a stellar leap from $33.50 a share when Freda took over as CEO on July 1, 2009.
That increase appears to be paying dividends for everyone. Earlier this year, Freda signed a new employment contract, effective July 1, that includes stock based rewards of no less than $5 million. According to Caris & Co. analyst Linda Bolton Weiser, “Freda could receive a bonus of 160,000 shares if the stock trades at an average of $150 or higher during the 20 days ending June 30, 2014, which is at least $24 million. If the stock trades at an average below $37.50, Freda will receive no shares. If shares trade around $92.12, Freda will receive about 100,000 shares.”
Lauder’s sales momentum made a sharp comeback in 2010 with net sales up 6 percent to $7.8 billion compared with the prior year — this after they slid 7 percent in 2009. Lauder is once again on track to end it’s fiscal year, ending June 30, in a much better position than it started. For the first nine months, profits rose 45.2 percent to $659.7 million from $454.4 million a year earlier. Revenues increased 13.3 percent to $6.75 billion from $6 billion.
These results have swayed Wall Street analysts, who several years prior had grumbled about what they saw as Lauder’s brand silos and its insular approach to running the business.
“He’s an amazing statesman,” said Deutsche Bank analyst Bill Schmitz. In Schmitz’s view, Freda deftly balances the tactical know-how of a ceo with diplomacy, noting that he has an endearing habit of saying, “This is what I think. What do you think?” Schmitz said, “He plays the game great.”
As a result, Lauder’s stock bounded to a high of more than $100 earlier this week, a stellar leap from $33.50 a share when Freda took over as CEO on July 1, 2009.
That increase appears to be paying dividends for everyone. Earlier this year, Freda signed a new employment contract, effective July 1, that includes stock based rewards of no less than $5 million. According to Caris & Co. analyst Linda Bolton Weiser, “Freda could receive a bonus of 160,000 shares if the stock trades at an average of $150 or higher during the 20 days ending June 30, 2014, which is at least $24 million. If the stock trades at an average below $37.50, Freda will receive no shares. If shares trade around $92.12, Freda will receive about 100,000 shares.”
Lauder’s sales momentum made a sharp comeback in 2010 with net sales up 6 percent to $7.8 billion compared with the prior year — this after they slid 7 percent in 2009. Lauder is once again on track to end it’s fiscal year, ending June 30, in a much better position than it started. For the first nine months, profits rose 45.2 percent to $659.7 million from $454.4 million a year earlier. Revenues increased 13.3 percent to $6.75 billion from $6 billion.
These results have swayed Wall Street analysts, who several years prior had grumbled about what they saw as Lauder’s brand silos and its insular approach to running the business.
“He’s an amazing statesman,” said Deutsche Bank analyst Bill Schmitz. In Schmitz’s view, Freda deftly balances the tactical know-how of a ceo with diplomacy, noting that he has an endearing habit of saying, “This is what I think. What do you think?” Schmitz said, “He plays the game great.”