- Estee Lauder Co. Inc.
- 19 August 2024 12:14:40
Source: Sharecast
Fabrizio Freda has informed the board that he intends to retire at the conclusion of the current financial year ending 30 June 2025, after 16 years with the company.
Estée Lauder said it was "well advanced" in its CEO succession planning process and has considered many internal and external candidates.
“We look forward to celebrating Fabrizio’s many amazing accomplishments as his formal retirement date nears," said executive chair William Lauder. "Until then, the board, Fabrizio and the entire leadership team are laser-focused on navigating the current challenges faced by the company.”
The news came as Estée Lauder unveiled its results for the past financial year, in which net sales were down 2% at $15.6bn and diluted earnings per share dropped 61% to $1.08.
Sales were held back by ongoing softness in overall prestige beauty in mainland China and a decline in Asia travel retail, partially offset by growth in Hong Kong, Europe, the Middle East and Africa, Japan and Latin America.
Looking ahead to the current year, while the global prestige beauty market is tipped to grow by 2-3% overall, Estée Lauder expects a "more a tempered performance than the industry", driven by its significant business in mainland China and Asia travel retail.
The company is currently undergoing a restructuring programme dubbed "Profit Recovery and Growth Plan" or PRGP, designed to improve margins, lower the cost base and reduce overheads. The PRGP is on track to drive operating profit net savings of $1.1-1.4bn in the financial years ending 2025 and 2026.
"However, the greater than previously expected headwinds in mainland China and Asia travel retail are expected to partially offset the PRGP’s initial operating profit net benefits," the company said.
Futures were down 8.4% at $86.98 by 0712 in New York.