New York, NY
www.elcompanies.com
Sales: $13.6 billion


Key Personnel: 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; Sara Moss, executive vice president and general counsel; Michael O’Hare, executive vice president, global human resources; Gregory F. Polcer, executive vice president, global supply chain; Cedric Prouvé, group president, international; Tracey T. Travis, executive vice president of finance and chief financial officer; Alexandra C. Trower, executive vice president, global communications; Aerin Lauder, founder and creative director, Aerin, and style and image director, Estée Lauder; Jane Lauder, global brand president, Clinique.

Major Products: Cosmetics, skin care, hair care and fragrances. Brands include Aerin Beauty, Aramis, Aveda, Becca, Bobbi Brown, Bumble and bumble, Clinique, Darphin, DKNY, Donna Karan, Editions de Parfums Frederic Malle, Ermenegildo Zegna, Estée Lauder, GlamGlow, Jo Malone, Kilian, Kiton, LaMer, Lab Series, Le Labo, MAC, Michael Kors, Origins, Rodin, Smashbox, Tom Ford Beauty, Tommy Hilfiger, Too Faced, Tory Burch.

New Products: Skin care—Estée Lauder Advanced Night Repair Eye Concentrate Matrix and Perfectionist Pro Rapid Firm + Lift Treatment; La Mer—The Moisturizing Matte Lotion, The Moisturizing Cool Gel Crème, The Eye & Expression Cream and The Infused Lotion. Fragrance—Jo Malone London English Fields and Tom Ford Oud Wood; Hair care—Aveda Invati Advanced.

Comments: The Estée Lauder Company (ELC) might just be the best-run family beauty business in the world. More than 20 years ago, ELC opened its books, went public and showed the world its fortitude and makeup. When ELC debuted on the NYSE, it had a market cap of about $5 billion; today its market cap is more than $60 billion. The family business continues to thrive even as the family has changed with the times, installing outsiders who have proved to be masters in their craft. For example, CEO Fabrizio Freda made Forbes’ List of Most Reputable CEOs in the World for the second year in a row. Forbes notes that years ago, Freda implemented a reverse-mentoring program to promote perpetual learning and the hiring of more young people. According to one estimate, millennials now account for 67% of the Estée Lauder workforce. The goal, according to Freda, is to combine the entrepreneurial spirit of a startup with the discipline of a well-financed, structured organization.
The strategy is working. Through Q3 of fiscal 2019, sales were up 9% to $11.2 billion, buoyed by an 18% increase in skin care sales, while makeup sales were up 4% and hair care sales rose 3%. Meanwhile sales of fragrances declined 2%.

ELC executives expect demand for prestige cosmetics will continue to climb 7% this year, and are confident that the company can outpace market growth. That said, there are several risks that could temper results during the next several months:

• Continued softness of brick and mortar retail in the US and UK, which is impacting overall sales, especially makeup;
• Brexit in the UK; and
• Tariffs in China, along with moderating sales in China and travel retail.

Still, the world is rushing toward luxury and Estée Lauder has the portfolio to appeal to these consumers. Deloitte has ranked the company as the world’s No. 2 luxury goods maker, trailing only LVMH Moët Hennessy-Louis Vuitton.

In fiscal 2018, makeup accounted for 42% of sales, followed by skin care, 39%; fragrance, 13%; hair care, 5%; and other, 1%. Skin care sales rose more than 23% last year. The company credited this global resurgence to the enduring strength of hero product lines such as Advanced Night Repair from Estée Lauder and Crème de La Mer from La Mer, as well as recent product launches and targeted expanded consumer reach. The launches of Advanced Night Repair Eye Concentrate Matrix and Perfectionist Pro Rapid Firm + Lift Treatment from Estée Lauder were particularly successful in China and certain travel retail locations in Asia/Pacific. During fiscal 2018, ELC continued to expand the Crème de La Mer and Genaissance de la Mer product lines from La Mer through the introduction of The Moisturizing Matte Lotion, The Moisturizing Cool Gel Creme, The Eye & Expression Cream and The Infused Lotion

Global makeup sales rose, too, but at a slower pace. By region, Europe, the Middle East & Africa accounted for 41% of sales; the Americas accounted for nearly 37% of sales and Asia/Pacific, 22%.
As of June 30, 2018, Estée Lauder operated approximately 1,500 freestanding stores. Most are operated under a single brand name, such as MAC, Jo Malone London, Aveda or Origins. There are also more than 650 company-branded freestanding stores around the world operated by authorized third parties, primarily in Europe, the Middle East and Africa.