EL Latest Report

Performance Review

Based on the financial data provided, Estée Lauder (stock code: EL) recorded a total operating revenue of US$4.004 billion as of December 31, 2024, a year-on-year decrease of 6.44% from US$4.279 billion as of December 31, 2023. This change reflects the company's poor sales performance in the year, possibly affected by factors such as market competition, changes in consumer demand, or internal management.

Key Data in the Financial Report

1. Estée Lauder's total operating revenue in 2024 was US$4.004 billion, a year-on-year decrease of 6.44% from US$4.279 billion in 2023.

2. Net sales were US$15.61 billion, a year-on-year decrease of 2%; net profit was US$390 million, a year-on-year decline of 61%.

3. The resignations of senior executives, including the chief data officer and the executive vice president of corporate marketing, and organizational restructuring were believed to be related to the decline in performance.

4. In the Chinese market, consumers became more cautious in purchasing high-end beauty products, especially after the easing of outbound travel policies, weakening the attractiveness of duty-free shops in Hainan.

5. In the Asia-Pacific region, operating profit was only RMB224 million, a year-on-year decline of 73%.

Peer Comparison

1. Industry-wide analysis: The overall beauty and cosmetics industry faced multiple challenges in the past year, including rising raw material costs, supply chain issues, and changes in consumer behavior. According to industry reports, many large brands also experienced similar sales declines, indicating that the industry as a whole still needs to make efforts in its recovery. The overall market was weak, with the cumulative year-on-year decrease in retail sales of cosmetics by enterprises above designated size reaching 1.3% in 2024.

2. Peer evaluation analysis: Compared with other well-known brands in the industry, Estée Lauder's year-on-year decrease in total operating revenue was within an acceptable range, but competitors' performances need to be closely monitored. For example, some competing brands may have performed well in specific product lines, taking market share from Estée Lauder. This indicates that the company needs to reassess its market positioning and product strategy to cope with competitive pressure.

Summary

Estée Lauder's performance decline in 2024 was mainly affected by the intensified market competition, changes in consumer demand, and economic uncertainties. The company failed to effectively respond to market challenges during the executive turnover and organizational restructuring, leading to a double decline in sales and profits. Although the overall industry performance was weak, potential changes in the consumer market and strategic adjustments by the company may bring opportunities for future growth.

Opportunities

1. By strengthening its online channel layout and reducing its reliance on duty-free shops, Estée Lauder can better adapt to market changes.

2. Establishing an innovative R&D center and launching localized innovative products can enhance the brand's market influence.

3. Targeting the needs of young consumer groups, launching more attractive product lines can activate sales.

Risks

1. Intensified competition, especially the rise of emerging brands and e-commerce platforms, may continue to erode Estée Lauder's market share.

2. Frequent executive changes may lead to instability in company strategy, affecting long-term development.

3. A sluggish overall economic environment may continue to suppress consumers' willingness to consume, especially in the luxury market.

4. Product line adjustments may affect sales performance in the short term, leading to fluctuating performance.