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Estee Lauder Inc.

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At a Glance

Uppers

Reputation as one of the leading consumer products companies in the world.

Organizational commitment to providing employees with learning opportunities.

Downers

Employee criticism for limited professional advancement.

 

The Bottom Line

Operating a portfolio of 28 consumer brands, Estée Lauder is a worldwide leader in the personal products agency with a commitment to creativity and its people.

About Estee Lauder Inc.

Estée Lauder is one of the world's leading makers of cosmetics, fragrances, and skin and hair care products. Its owned and licensed brands include upscale Estée Lauder and Clinique as well as the professional Bobbi Brown and M•A•C lines and the Tom Ford and La Mer luxury lines. Skin care and makeup together account for more than 80% of revenue. The company's products are sold in more than 150 countries through upscale department stores and specialty retailers, as well as online. Estée Lauder also operates some 1,500 freestanding retail stores (primarily for its M•A•C, Origins, and Aveda brands). Most of its revenue is generated outside the US. The Lauder family controls about 85% of the company's voting power.

Operations

Estée Lauder's portfolio of skin care products accounts for some 45% of total sales and includes moisturizers, serums, cleansers, acne care, and sun care products. Lipsticks, foundation, eye shadows, nail polish, and other makeup products bring in another 40%. The company's fragrance lineup -- which includes powders, candles, soaps, and lotions in addition to colognes and perfumes -- contributes more than 10% of sales and hair care products generate the rest. 

Its more than two dozen well-known brands include M•A•C, Estée Lauder, Too Faced, Smashbox, Tom Ford Beauty, Bobbi Brown, La Mer, Jo Malone, Aramis, Tommy Hilfiger, DKNY, Origins, GLAMGLOW, and Clinique.

Geographic Reach

Based in New York City, Estée Lauder products are sold in more than 150 countries and territories. The Europe, Middle East, and Africa (EMEA) region is the company's largest market accounting for about 45% of revenue, followed by the Americas (primarily the US), which represents more than 30%. The Asia-Pacific region generates some 25% of total sales.

Most of Estée Lauder's online sales are generated in the US, UK, and China.

The company has about 35 offices, plants, and other facilities worldwide. It manufactures its products primarily in the US, Belgium, Switzerland, the UK, and Canada. 

Sales and Marketing

Estée Lauder's sales channels consist primarily of department stores, specialty multi-brand retailers, upscale perfumeries and pharmacies, and prestige salons and spas. Other sales channels include the company's freestanding stores and duty-free shops. The company's online sales are mainly through company-owned e-commerce and m-commerce sites and through various websites in some 50 countries. 

The company spent $3.4 billion on advertising, merchandising, sampling, promotion, and product development in fiscal 2019, up from $3.3 billion and $2.7 billion the previous two years.

Financial Performance

Amid the strong performance of skin care products, Estée Lauder has seen robust growth over the past five years with sales up 38% and net income up 64% since fiscal 2015 (ended June).

In fiscal 2019 the company reported revenue of $14.9 billion, up 9% from the prior year. As it has in the past couple of years, the skin care portfolio led growth with continuing strength in existing product lines as well as new product launches. Growth outside the Americas, particularly in Asia, was more than enough to offset a decline in Americas sales.

Net income was also up that year, jumping 61% to $1.8 billion, as a result of the rise in revenue and lower provision for income taxes.

Cash at the end of fiscal 2019 was $3 billion, an increase of $806 million from the prior year. Cash from operations contributed $2.5 billion to the coffers, while investing activities added another $473 million, mainly from divestiture proceeds. Financing activities used $2.2 billion for dividends to stockholders and stock repurchase.

Strategy

Estée Lauder focuses on geographic and product portfolio expansion and strengthening its distribution. It is also pushing brand awareness and sales by expanding its digital presence through e-commerce and m-commerce (mobile commerce) channels. The company continues to build its skin care product segment through the introduction of new product offerings, including the launch of Advanced Night Repair Eye Supercharged Complex and Clinique iD, which enables custom blends of hydration and treatment. 

Despite its ranking and market share, Estée Lauder has been working to breathe new life into its flagship brand as competition heats up. While Coty, Elizabeth Arden, and L'Oréal are enlisting the help of celebrities to elevate and give credibility to its brands, Estée Lauder is getting a boost from fashion. The company is banking on a multi-year partnership with former Gucci Group creative director and fashion talent Tom Ford to continue its successful Tom Ford-inspired Estée Lauder line.

Estée Lauder's geographic growth is focused on emerging markets and consumers who purchase in the travel retail channel—in stores at their travel destinations or when they return to their home markets. The company is increasing its presence in countries such as China, Mexico, India, and Russia. In China, it is leveraging digital distribution channels like Tmall and increasing its social media campaigns in the region.

Company Background

Estée Lauder (then Josephine Esther Mentzer) started her beauty career by selling skin care products formulated by her Hungarian uncle, John Schotz, during the 1930s. Eventually she packaged and peddled her variations of his formulas, which included face cream and a cleansing oil.

With the help of her husband, Joseph Lauder, she set up her first office in Queens, NY in 1944 and added lipstick, eye shadow, and face powder to the line. Joseph oversaw production, and Estée sold her wares to beauty salons and department stores, using samples and gifts to win customers. Throughout the 1950s, Estée traveled cross-country, at first to sell her line to high-profile department stores such as Neiman Marcus, I. Magnin, and Saks, and later to train saleswomen in these stores.

In 1964, Estée Lauder introduced Aramis, a fragrance for men, and in 1968, Clinique, a hypoallergenic skin care line. Estée Lauder created the Prescriptives skin care and makeup line for young professional women in 1979 and in 1990, unveiled its Origins botanical cosmetics line. The company launched the All Skins cosmetics line in 1991 and in 1994, bought a controlling stake in hip Make-Up Art Cosmetics (M•A•C).

The company went public in 1995. Estée Lauder died in 2004 but family members still serve as executives and board members of both Estée Lauder Companies and Clinique.

Estee Lauder Inc.

767 5TH AVE
New York, NY 10153-0003
Phone: 1 (212) 572-4200

Stats

Employer Type: Privately Owned
Director, Global Workforce Productivity Systems: Vance Amatulli
Senior Vice President, Global Talent: Dimitra Manis
Vice President Human Resources: Fran Piezzo
Employees (This Location): 700
Employees (All Locations): 9,525

Major Office Locations

New York, NY

Other Locations

Foley, AL
Tucson, AZ
Brea, CA
Carlsbad, CA
El Segundo, CA
Pasadena, CA
Colorado Springs, CO
Clinton, CT
Rehoboth Beach, DE
Estero, FL
Miami, FL
Orlando, FL
Winter Park, FL
Edinburgh, IN
Wrentham, MA
Hagerstown, MD
Kittery, ME
Branson, MO
O Fallon, MO
Omaha, NE
Carlstadt, NJ
Central Valley, NY
Melville, NY
New York, NY
Riverhead, NY
Kennett Square, PA
Monroeville, PA
Philadelphia, PA
Myrtle Beach, SC
Sevierville, TN
Houston, TX
Lake Jackson, TX
Manchester Center, VT