Estée Lauder Reach $10B Milestone
The Estée Lauder Cos. Inc. made over $10 billion in sales in 2013 for the first time, and capped off its four-year restructuring plan.
"We have always been a growth company, but over the past four years our mission was to make that growth more profitable and sustainable, and we clearly accomplished that goal," said Fabrizio Freda, Lauder's president and chief executive officer. "Having established a firm foundation, we have an even better position today to focus on our top-line growth with the added advantage of having greater advertising firepower to unite our brands and promote the latest innovations."
The company said it expects fiscal 2014 sales to grow by 6 to 8% and also anticipates reaching a new long-term operating margin target of 16.5% in fiscal 2016.
Freda plans to keep the momentum going with "attention-getting innovations," like the recently launched reformulated versions of Clinique Dramatically Different Moisturizing Lotion and Estée Lauder Advanced Night Repair, as well as new products in brands like as MAC Cosmetics, Smashbox and Bobbi Brown.
Freda explained the strategy to WWD as threefold: "Updated formulas reward loyal customers with improved technology; attract new customers, particularly from the mass market, with energized marketing efforts, and help make inroads into markets where the product may not have been a strong performer."
He also said the company will continue to focus on "fewer but bigger launches to the largest market and consumer opportunities." He included that the product lineup includes a number of fragrances, a key focus area for the firm this year.
"We believe [fragrance] can be a larger and more profitable opportunity for our brands, particularly in emerging markets such as Latin America and the Middle East," he said. "In the past few years, we focused on improving fragrance profitability. Today, we are well positioned to resume faster growth, leveraging the new cost structure we have implemented."
Upcoming fragrance launches for fall will be from Estée Lauder Modern Muse, Tory Burch and a quintet of scents from the Aerin brand.