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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 approximately 85% of revenue. The company's products are sold in approximately 150 countries through upscale department stores and specialty retailers, as well as online. Estée Lauder also operates approximately 1,600 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 more than 50% of the company's voting power.

Operations

Estée Lauder's portfolio of skin care products accounts for more than 50% of total sales and includes moisturizers, serums, cleansers, toners, body care, exfoliators, acne care and oil correctors, facial masks, and sun care products. Lipsticks, foundation, eye shadows, nail polish, and other makeup products bring in nearly 35%. 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.

It's more than 25 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 approximately 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 approximately 30%. The Asia-Pacific region generates more than 25% of total sales.

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

The company has about 30 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 approximately 50 countries.

The company spent $3,398 million, $3,440 million and $3,287 million on advertising, merchandising, sampling, promotion, and product development in FY 2020, 2019 and 2018, respectively.

Financial Performance

Estée Lauder has seen robust growth in its revenue from 2016 to 2019 until 2020, when it fell. Overall, revenue has increased by 27% for the past five years. The company has struggled to achieve a steady net income for the past five years, with an overall 39% decrease from 2016 to 2020. 

In fiscal 2020 the company reported revenue of $14.3 billion, down 4% from the prior year. As it has in the past three years, the skin care portfolio led growth with continuing strength in existing product lines as well as new product launches. 

Net income was also down that year, falling 62% to $684 million.

Cash at the end of fiscal 2020 was $5 billion, an increase of $2 billion from the prior year. Cash from operations contributed $2.3 billion to the coffers, while financing activities added another  $1.5 billion, mainly from proceeds from issuance of long-term debt. Investing activities used $1.7 billion for payments for acquired businesses.

Strategy

Estée Lauder is building its strategy on different parts of the business.

The company strategically opened new points of distribution globally and exited certain locations when appropriate.

As of Jun. 30, 2020, the company operated approximately 1,600 freestanding stores. There are also more than 800 company-branded freestanding stores around the world operated by authorized third parties, primarily in Europe, the Middle East & Africa.

To market and promote its products, Estée Lauder begins with its well-diversified portfolio of more than 25 distinctive brands across four product categories. Its marketing strategies vary by brand, local market and distribution channel. The company has a diverse portfolio of brands, and it employs different engagement models suited to each brand's equity, distribution, product focus, understanding of the core consumer and local relevance. This enables the elevation of consumer experience as it attracts new consumers, create trial, build loyalty, drive consumer advocacy and address the transformation of consumer shopping behaviors.

Estée Lauder is increasing its brand awareness and sales through its strategic emphasis on technology, by continuing to elevate its digital presence encompassing eCommerce and mCommerce, as well as digital, social media and influencer marketing.

The company recognizes that technology presents opportunities for competitive advantage, and it continues to invest in new capabilities across various aspects of its business. During fiscal 2020, it improved its remote working infrastructure and resilience plans, deployed capabilities to enhance data analytics, launched new marketing capabilities to drive deeper consumer engagement and elevated the in-store experience through innovative technologies. Over the next few years, it plans to expand its seamless omni-retail capabilities, expand its social selling, create manufacturing and distribution facilities of the future powered by technology, and utilize predictive analytics to optimize its supply and demand planning.

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 FL 1
New York, NY 10153-0003
Phone: 1 (212) 572-4200

Firm Stats

Employer Type: Privately Owned
Senior Vice President, Global Talent: Dimitra Manis
Vice President Human Resources: Fran Piezzo
Manager: Karen Squitire
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