Estée Lauder sales fall in ‘difficult year’ as CEO departs

Estée Lauder has seen sales dip by 2% to $15.6bn (£12bn) in its full-year results, in part due to an “ongoing softness” in the China market, whilst also forecasting a fall in sales for the current fiscal year. While the group forecast lower than expected sales and earnings in FY25, it also announced that its CEO of 15 years, Fabrizio Freda, will be stepping down from his position. Net sales for the FY25 are expected to range between a fall of 1% to an increase of 2% against the prior year. In its latest update, the group said its results reflect an “ongoing softness in overall prestige beauty in mainland China and a decline in Asia travel retail”. Partially offsetting these declines was overall growth in Hong Kong SAR, as well as the markets of EMEA, Japan and Latin America. Looking ahead, the group said it anticipates “continued declines” in FY25 in the prestige beauty segment in China, mainly reflecting “persistent weak sentiment” among Chinese consumers. Fabrizio Freda, president and CEO said, “In fiscal 2024’s fourth quarter, we achieved our organic sales outlook and exceeded expectations for profitability, closing a difficult year. For fiscal 2025, we anticipate continued declines in the prestige beauty segment in China, mainly reflecting persistent weak sentiment among Chinese consumers. We intend to drive share gains in a market that continues to hold strong long-term promise. “In the rest of our business, we are planning to deliver improved performance across both developed and emerging markets. To fuel this, our priorities are reigniting Skin Care, capitalising on the multiple growth drivers of high-end Fragrance, moving faster in leveraging winning channels, launching accretive innovation inclusive of new, big opportunities, and enhancing our precision marketing capabilities.” He added: “While our sales and profit outlook for fiscal 2025 is disappointing, this year we will make important strides, as we implement our strategy reset to continue rebalancing regional growth, deliver improved annual profitability, and strengthen go-to-market and innovation capabilities to elevate our execution in response to a more competitive market.” Until his successor is appointed, Freda will continue to lead and oversee the group, and once a successor has been named, he will partner with them to “ensure a smooth transition and will also be available in fiscal year 2026 as an advisor”. Freda said: “Leading The Estée Lauder Companies for sixteen years, is and has been, a true honour and privilege. I am so proud of our company’s incredible accomplishments, and to have built the most talented, dedicated, and passionate team in the industry. Together we have transformed the company in beautiful ways; and we have set new standards for excellence. “I will continue to be fully focused on the execution of our strategic reset and the Profit Recovery and Growth Plan, as we continue to address the current challenges. As we manage for the long term, now is the right time to look ahead to the next generation of leadership for this great company. I look forward to continuing to work closely with our board of directors in the selection of my successor and ensuring a seamless transition.”