Specialist
Former VP The Estée Lauder Companies Inc
Agenda
- Beauty industry trends and developments
- Strategic update, discussing implications of Estée Lauder’s (NYSE: EL) agreed acquisition of Tom Ford and Balmain licence deal opportunities
- Estée Lauder's portfolio update, noting performance across key categories and channel dynamics
- 12–18-month outlook, focusing on macroeconomic headwinds and demand dynamics
Questions
1.
What key trends and dynamics have you been following in the beauty industry in the past year or so, particularly relating to prestige beauty?
2.
What do you think has led to the return to a more traditional route-to-market strategy vs what we saw during the pandemic, with more D2C brands?
3.
What do you think your comments around route-to-market strategy mean specifically for Estée Lauder? What is your outlook for the company’s performance across different distribution channels? How might it adjust its route-to-market strategy over the coming years?
4.
How do you explain the weakness around brand desirability? What would you attribute this weakness to?
5.
How do you assess Estée Lauder’s ability to attract a younger consumer to its portfolio of brands? I think you made the point that some of the brands, or some of its crown jewels, are perceived as older brands.
6.
What can you tell us about Estée Lauder’s agreed acquisition of Tom Ford? What do you think are some obvious or less obvious synergies to this deal? Obviously, Estée Lauder has a long-standing licensing deal with Tom Ford, but now this comes with all of Tom Ford’s IP.
7.
Now that Estée Lauder owns the formulas and has full control over the Tom Ford brand, do you think there’s opportunity to expand in the categories you mentioned – skincare and makeup – even if it hasn’t necessarily been successful in doing so in the past? Do you see that as an opportunity, and are you confident that the company has the talent to expand in those categories?
8.
What do you think are the implications for Estée Lauder’s competitors of this agreed Tom Ford acquisition? How does this impact Estée Lauder’s market positioning, and how would you respond to someone suggesting the company has ambitions to become the next luxury powerhouse in the industry?
9.
You’ve mentioned the risk with Estée Lauder’s reliance on China’s market. How should we think about growing in different markets, be it in the Tom Ford business as well as the broader portfolio? How can the company move away from its significant reliance on that market?
10.
You mentioned the Middle East as a region of opportunity. Do you think Estée Lauder could leverage its newly secured licence deal with Balmain to expand in that market? I believe the fashion house is quite popular in the Middle East.
11.
Are there any concerns about Balmain’s relevance in North America?
12.
Do you find that the success of a brand – Tom Ford’s success and eventually Balmain’s, potentially – is strictly reliant on the designer behind the brand, or are other people instrumental to it and do you think Estée Lauder has the right people in place today to execute on such ambitions?
13.
Would you highlight any other key risks or challenges that you foresee around the Tom Ford acquisition or the Balmain licence deal?
14.
What do you expect to see in the macro environment over the next year? Starting with demand, could you give some perspective on what you’re seeing in the market today and how we should think about consumers’ appetite for beauty products, specifically prestige beauty products?
15.
What is your 12-18-month outlook for Estée Lauder and how should we think about its financial performance over that period? As you mentioned, the company revised its full FY23 guidance, so what are your thoughts there?
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