Today, Estée Lauder released its second quarter of FY 2025. The company reported financial results for the second quarter ending December 31, 2024, reflecting a 6% decline in net sales to $4.0 billion.
Also, The Estée Lauder Companies Inc. has introduced Beauty Reimagined, a transformative strategic vision aimed at revitalizing growth and reinforcing its position as a leader in prestige beauty.
According to CEO Stéphane de La Faverie, Beauty Reimagined is designed to drive sustainable sales growth and achieve a strong double-digit adjusted operating margin in the coming years. The strategy includes restructuring efforts to create a leaner, faster, and more agile organization, while expanding consumer reach, enhancing innovation, and increasing investments in brand visibility.
While overall net sales declined, Estée Lauder reported market share gains in key regions. In the U.S., Clinique led in skin care, while Bumble & bumble performed well in hair care. In China, Estée Lauder drove growth in makeup, with La Mer excelling in skin care and Le Labo in fragrance. The company also saw fragrance leadership in Japan, where Le Labo and La Mer performed strongly.
The company achieved high rankings during major sales events, including the 11.11 Global Shopping Festival and TikTok’s Black Friday and Cyber Monday campaigns. The Ordinary, one of its fastest-growing brands, expanded its presence with new launches on the U.K. TikTok Shop and Amazon’s U.S. Premium Beauty store, alongside international market entries in Thailand and China.
As for spefic performance of each segments, in Skin Care, sales recorded $1.921 billion dropped 12%, primarily due to impacts from the overall challenging retail environments in Asia/Pacific and the Company’s Asia travel retail business, including ongoing pressure from subdued sentiment from Chinese consumers, which drove declines from Estée Lauder and La Mer.
In Makeup, its sales recorded $1.15 billion down 1%, impacted by declines in Tom Ford, M·A·C, and Smashbox, although Clinique saw high-single-digit growth. The challenging retail environment in Asia/Pacific and the Company’s Asia travel retail business also caused decline.
In Fragrance, its sales recorded $744 million, up 2%, fueled by Le Labo and its strong double-digit growth across each geographic region, partially offset by the decline from Estée Lauder, due in part to reduced shipments of holiday sets. The growth from Le Labo benefited from both hero products, such as its Classic Collection, innovation, such as Osmanthus 19, the City Exclusive scent for Kyoto, and targeted expanded consumer reach.
In Hair Care, its sales recorded $159 million, down 8%, primarily due to softness in the salon channel and shipment timing issues for Aveda.
Regionally, The Americas recorded $1.223 billion,down 2%, with declines in North America offset by new brand launches on Amazon’s U.S. Premium Beauty store.
The Europe, Middle East & Africa saw $1.494 billion, decreased 6%, mainly due to weak global travel retail demand and Chinese consumer sentiment.
Asia/Pacific recorded $1.287 billion, down 11%, primarily driven by the impacts from an overall challenging retail environment, including subdued consumer sentiment in mainland China, Korea and Hong Kong SAR. The net sales decline in Korea also reflects the strategic exit of Dr.Jart+ from the travel retail channel in November 2024.
Estée Lauder announced an expansion of its Post-Recovery Growth Plan (PRGP), targeting a net reduction of 5,800 to 7,000 positions through restructuring efforts. The initiative includes reorganization, process simplification, outsourcing of select services, and evolving go-to-market strategies. The company expects restructuring charges between $1.2 billion and $1.6 billion but anticipates annual benefits of $0.8 billion to $1.0 billion to help restore margins and reinvest in growth-driving initiatives.
