Estée Lauder CEO to retire as sales and profits fall amid global prestige beauty slowdown

Estée Lauder, which owns brands including The Ordinary and Jo Malone London, reported net sales of $15.61bn (£12.02bn) in the 12 months to June 30, 2024.

This was down 2% compared with the $15.91bn (£12.25bn) in net sales reported at the same time last year.

Organic net sales decreased by 2%, primarily reflecting ongoing softness in the overall prestige beauty market in mainland China and a decline in Asian travel retail. 

Meanwhile, total reported operating income was $0.97bn (£0.75bn), down 36% from $1.51bn (£1.16bn) in the prior year.

Looking ahead, the company said reported and organic net sales are forecast to range between a decrease of 1% to an increase of 2% versus the prior year.

Estée Lauder also announced the retirement of president and chief executive Fabrizio Freda, who intends to depart the business at the end of fiscal year 2025.

Freda joined Estée Lauder in 2008, having previously served as president at fellow beauty giant Procter & Gamble for more than 20 years.

He will continue to lead and oversee the company’s strategic, financial and investment priorities, including its profit recovery and growth plan, until a successor is appointed.

The company said it is “well advanced” in its long-established CEO succession planning process and has considered many highly qualified internal and external candidates.

Freda said: “In fiscal 2024’s fourth quarter, we achieved our organic sales outlook and exceeded expectations for profitability, closing a difficult year. Organic sales and adjusted earnings per share returned to growth in the second half.

“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 skincare, 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.”