Specialist
Former director at The Estée Lauder Companies Inc
Agenda
- Beauty industry trends, focusing on Estée Lauder (NYSE: EL)
- Holiday season review and 2022 outlook
- Estée Lauder’s digital investments and competitiveness vs emerging indie brands and L’Oréal (PAR: OR)
- Channel exposure and Asia growth opportunities
Questions
1.
What’s your 2022 outlook for the beauty industry?
2.
What are your thoughts on key category growth? Any thoughts specifically on the rise of the skincare over the last decade? Is there anything at risk there and could that trend reverse?
3.
Could you comment on consumers trading up or down across price points in the current environment and post-pandemic, given you’re expecting a strong 2022 for the beauty industry?
4.
What are your expectations for the beauty industry’s performance over the holiday season? How marked might the growth or declines have been? Do you have any thoughts on any key areas?
5.
How do fragrances perform over the holiday season, given it’s a significant item for gifting? You mentioned the fragrance category has been challenged and you don’t believe it is a key growth segment for the industry.
6.
Is holiday segment growth across the beauty industry a potential indicator for what’s to come in 2022?
7.
How would you frame Estée Lauder’s performance around the holiday season vs the broader industry? Are there any assumptions around growth across categories or brands for Estée Lauder, specifically around the holiday season?
8.
Which key product areas is Estée Lauder well-positioned to address in 2022?
9.
Are there any particular product areas you would consider to be Estée Lauder’s crown jewel?
10.
Do you think Estée Lauder executed any emerging trends particularly well?
11.
What trends isn’t Estée Lauder addressing?
12.
Are there any other obvious holes in Estée Lauder’s portfolio? Trends aside, are there any key areas that you would make changes to or bring into the fold?
13.
What’s your take on the cadence of recovery in makeup? Estée Lauder’s most recent earnings results indicate its cosmetics business remained depressed in the September end of fiscal quarter. I know you are positive and observing a return to colour cosmetics, so could it recover to pre-pandemic levels? Is there anything in the company’s power to accelerate a return to pre-pandemic levels in the category?
14.
Could you outline Estée Lauder’s efforts in marketing and related investments? How could this line item play out over FY22?
15.
What are your thoughts on Estée Lauder’s digital investments to decrease its dependence on the in-store experience, given the pandemic disruptions to this experience?
16.
How would you compare Estée Lauder’s digital strategy and expertise vs other leading beauty players’ such as L’Oréal?
17.
How would you compare Estée Lauder’s investments and online experience vs L’Oréal’s? I believe L’Oréal targeted around 50% of its sales to come from its online channel, and I assume it was expecting quite a bit of a return from its investments here.
18.
What’s the risk in pure plays being competitive threats to Estée Lauder? Could any new-age D2C brands displace any of Estée Lauder’s products?
19.
How does Estée Lauder mitigate any market share erosion across these categories? Does it lean on marketing investments to mitigate that loss, or something else?
20.
Could any independent brands be compelling or a right fit for Estée Lauder to consider bringing into the fold to make it a much more formidable player?
21.
Back in April 2021, Clinique quietly launched a UK site that enabled video chats with consultants for consumers to try on products virtually. How would you grade the relative success and potential stickiness of this medium as a significant sales driver?
22.
Do you think Estée Lauder is treating the video chats medium as a means to find new growth or more to sustain growth from its loyal customer base?
23.
What ability do leading industry players have to successfully recreate and entirely replace the in-person experience? Have there been any examples of brands creating a compelling online experience?
24.
What’s your outlook for Estée Lauder’s post-coronavirus business acceleration plan, which will result in a closure of approximately 10-15% of its free-standing units, including unproductive department store counters, and a realignment of its distribution network?
25.
What are your thoughts on Estée Lauder’s channel exposure and its efforts to diversify beyond traditional channels? I believe department stores were estimated to be around 20% of FY21 sales.
26.
Do you think Estée Lauder’s management is comfortable being so over-indexed to Ulta and Sephora?
27.
What’s the potential hesitation from Estée Lauder around being over-indexed to Ulta and Sephora, assuming they’re also helping support and keep the company’s brands relevant?
28.
What’s your take on Estée Lauder’s long-term proposition and strategy in Asia?
29.
What is Estée Lauder’s approach to continued acceleration in Asia? Could any challenges get in the way of this?
30.
What are your thoughts around inflation and Estée Lauder’s relative leverage as a potential offset to increasing cost inputs?
31.
Could you comment on Estée Lauder’s management team or any changes you would make?
32.
What high-level key risks should we monitor closely as we follow Estée Lauder’s story over the next 3-5 years?
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