Estee Lauder

Question: Have there been restructuring or organizational changes?

• Estee Lauder has undergone organizational changes, including the elevation of China to be an independent region due to its importance and the need for coordination with travel retail and other key parts of the company (¹).
• The company has made changes to create a more streamlined and integrated organization, which has resulted in a stronger foundation for growth (²).
• In October 2015, Estee Lauder approved plans for the Global Technology Infrastructure (GTI) Restructuring, transitioning from company-owned assets to a primarily vendor-owned, cloud-based model (³).

Question: What is the company strategy?

• Estée Lauder's strategy focuses on activating and accelerating multiple engines of growth (⁴).
• The company has a 10-Year Strategic Compass and a corporate strategy that pivots the business to win and drive long-term sustainable growth (⁵).
• Estée Lauder has a strong focus on digital distribution and marketing, maintaining a limited distribution system to position itself as a luxury brand (⁶).
• The company invests in innovation and new product launches, such as Clinique and other popular products (⁷).
• Andrew Ross leads Strategy, New Business Development, and Integration at Estée Lauder, playing an integral role in developing the company's strategic direction (⁸).
• Estée Lauder has a progressive Mergers and Acquisition (M&A) strategy, combining acquisitions and minority investments to optimize access, acquisition cost, and return on investment. Examples include the acquisition of Dr. Jart+ and men's grooming brand Do The Right Thing (⁹).
• The company is committed to elevating its climate actions, setting ambitious science-based targets for greenhouse gas emissions, and increasing its focus on racial equity (¹⁰).
• Estée Lauder's marketing strategy includes giving out free samples and conducting promotional campaigns such as purchase-for-purchase and gift-for-purchase (¹¹).
• The company uses technology and innovation to develop a superior reputation for elegance, luxury, and high quality, and is extensively involved in research and development of products (¹²).

Question: What recent mergers, acquisitions or divestitures have there been?

• In November 2014, Estée Lauder completed its acquisition of Le Labo, a high-end fragrance and sensory lifestyle brand (¹³).
• In January 2015, Estée Lauder completed its acquisition of GLAMGLOW, a Hollywood skincare brand focused on fast-acting treatment masks designed to deliver stunning, camera-ready results (¹³).
• On December 18, 2019, Estée Lauder acquired the remaining 66.66% equity interest in Have & Be Co. Ltd., the global skincare company behind Dr.Jart+ and men's grooming brand Do The Right Thing, for $1,268 million in cash (¹⁴).
• In March 2021, Estée Lauder acquired a majority stake in DECIEM, a skincare and beauty company, for $2,992 million (¹⁴).

Question: What are the strategic initiatives?

• Strategic initiative to manage the "Square," which brings together China, APAC, and Travel Retail, focusing on gaining market share with the traveling Chinese consumer (¹⁵)
• Collaborating with Transformation Office, Corporate Strategy, and local China and Travel Retail teams to develop scenarios for managing the Square (¹⁶)
• Focusing on Consumer Insights, Share Analysis, Growth Engines, Must Wins, and Category/Subcategory Strategy in Key and Emerging Markets (¹⁶)
• Enhancing go-to-market support structures and shifting focus from traditional to social and digital marketing strategies to improve consumer experience and support omnichannel opportunities (¹⁷)
• Exiting underperforming businesses in select markets and channels of distribution to improve profitability (¹⁷)
• Investing in strategic priorities for fiscal year 2021, including enhancing manufacturing capabilities, expanding online fulfillment capabilities, and funding growth opportunities in Asia Pacific, such as the new innovation center in Shanghai (¹⁸)
• Adjusting brick-and-mortar footprint to align with consumer shopping preferences (¹⁸)
• Focusing on strategic areas for growth, such as skincare, online, traveling consumers, digital marketing, and omni-channel retail (¹⁹)
• Investing in innovation and new product launches, such as Clinique, to build global share and drive long-term profitable growth (⁷)
• Establishing a new global shared services organization called 1Source to efficiently deliver fundamental services to the company, initially providing select finance, legal, and HR services (²⁰)

Question: What are the cost reduction initiatives?

• Estee Lauder's cost reduction initiatives include the Leading Beauty Forward (LBF) initiative, which aims to reduce costs, redesign the company's brand, and restructure corporate functions (²¹).
• The LBF initiative is expected to result in a net reduction of 1,800 to 2,000 positions globally, which is about 4% of its current workforce (²²).
• The company plans to optimize its supply chain by centralizing supply chain management, redesigning certain supply chain planning and transportation management activities, improving the organizational design of manufacturing and engineering processes related to certain product lines, and enabling distribution capabilities and generating efficiencies through an external service provider (²³).
• Estee Lauder also aims to optimize corporate and region market support structures by shifting focus from traditional to social and digital marketing strategies, enhancing consumer experience, and supporting expanded omnichannel opportunities (²³).
• The company plans to exit underperforming businesses in select markets and channels of distribution, close underperforming freestanding retail stores, and exit mid-tier department stores for certain brands in the United States to redirect resources to other retail locations and channels with potential for greater profitability (²⁴).

Question: what technology initiatives are there?

• Estée Lauder has implemented artificial intelligence (AI) in product development, including a virtual try-on tool for lipsticks and foundations, and a fragrance recommendation engine (²⁵).
• The company launched a Voice-Enabled Makeup Assistant (VMA) application, an AI-powered mobile app designed to help visually impaired users apply makeup more easily and confidently (²⁶).
• Estée Lauder is advancing features like Augmented Reality and voice-assisted shopping to enhance the luxury beauty experience (²⁷).
• The company is investing in its e-commerce platform to enable capabilities such as virtual try-on and data analytics for personalized consumer experiences (²⁸).
• Estée Lauder collaborated with Google to offer voice-activated nighttime skincare advice through Google Assistant (²⁹).
• The company is leveraging existing capabilities and innovating new foresight analytic capabilities to identify upcoming trends and improve demand planning accuracy (²⁸).
• Estée Lauder's brand Aveda established a successful commercial blockchain pilot (²⁸).

Question: What is the cloud transformation strategy?

• Estee Lauder is investing in additional digital tech centers in different regions around the world to complement its existing IT professionals and enhance the diversity of their innovation capabilities (³⁰).
• The next tech center will be established in Bucharest, Romania, which was strategically selected as it has become an epicenter for top technology talent (³⁰).
• The Bucharest center will focus on supporting critical areas such as data analytics, omni-retail solutions, cloud technology, and intelligent automation (³⁰).
• Estee Lauder is constantly transforming to ensure the company delivers innovative technology solutions to the business while accelerating its digital capabilities and driving greater value (³⁰).

Question: What are the machine learning initiatives?

• Estée Lauder has incorporated its own ethical machine learning practice into its business strategy to drive product development and supply chain efficiency (³¹).
• The company has developed a consumer data platform that makes product recommendations based on previous purchases and a supply and demand planning application, which helped increase forecasting accuracy by 30% (³²).
• Estée Lauder Companies (ELC) launched a new AI-powered app called Voice-enabled Makeup Assistant (VMA) to help visually impaired makeup users. The app uses voice instruction, AR, and AI technology to guide users and provide feedback on makeup application (³³).
• VMA's smart mirror technology was developed using machine learning and uses AI to identify makeup applied on a user's face, assess uniformity and boundaries, and provide audible feedback on areas that may require more attention (³⁴).

Question: What are the digital transformation initatives?

• Estee Lauder is embarking on a digital transformation with enhancements to its global supply chain, aiming to accelerate the use of data and analytics for identifying operational excellence opportunities (³⁵).
• The company is optimizing its digital organization and other go-to-market organizations to enhance its capabilities and shift more resources to support online growth, resulting in a net reduction of the workforce (³⁶).
• Estee Lauder is focusing on mobile as part of its digital strategies, with mobile accounting for 70% of its global online traffic (³⁷).
• The company is investing in high-touch services transferred online, such as chat with consultants, digital try-on, and live streaming opportunities, to maintain conversion rates and increase consumer engagement (³⁸).
• Estee Lauder is working with platforms like Instagram, Snapchat, TikTok, and WeChat to capitalize on social commerce trends and deploy technology solutions for better consumer outreach and personalization (³⁹).
• The company is optimizing its distribution network by closing underperforming freestanding stores, counters, and other retail locations, reflecting changing consumer behaviors and higher demand for online and omnichannel capabilities (⁴⁰).

Question: What are the company specific business risks?

• Difficulty in attracting, assimilating, or retaining necessary personnel, which could be exacerbated by the implementation of strategic plans and other initiatives, as well as market conditions (⁴¹, ⁴², ⁴³, ⁴⁴, ⁴⁵)

• Risks related to the global scope of operations, including fluctuations in foreign currency exchange rates, foreign or U.S. laws and regulations, lack of well-established legal and administrative systems in certain countries, adverse weather conditions and natural disasters, and social, economic, and geopolitical conditions (⁴¹, ⁴², ⁴³, ⁴⁴, ⁴⁶, ⁴⁷, ⁴⁸)

• Disruptions in operations or supply chain, including industrial accidents, environmental events, strikes and labor disputes, capacity constraints, disruptions in ingredient/material/packaging supply, global shortages, disruptions in information technology, loss or impairment of key manufacturing sites or suppliers, product quality control, safety, increase in commodity prices and energy costs, licensing requirements, and other regulatory issues (⁴¹, ⁴², ⁴⁶, ⁴⁷, ⁴⁸)

• Dependency on a single or limited number of suppliers for some products, which could lead to losses or adversely affect the ability to bring products to market if there are changes in the financial or business condition of suppliers (⁴⁶, ⁴⁷, ⁴⁸)

• Potential negative impact on the business due to defective or unsafe products, deceptive product claims, failure to meet consumer expectations, or counterfeit versions of products sold by third parties (⁴⁵)

Question: What executives were promoted, hired or exited from the company you are researching in 2022 and 2023?

No information available.

Question: What awards or recognitions has the company received?

• Estée Lauder Companies received Tell Awards for their significant direct investments in Switzerland, contributing to the Swiss economy and embodying shared values of quality, stability, and innovation (⁴⁹).
• M·A·C Cosmetics, Estée Lauder, and Aveda were recognized on Newsweek’s list of “America’s Best Loyalty Programs 2021,” with over 19 million combined lifetime active members enrolled in loyalty programs, representing over $2 billion in lifetime loyalty sales (⁵⁰).
• Estée Lauder Companies and its employees received the Breast Cancer Research Foundation’s (BCRF) Sandra Taub Humanitarian Award for their commitment to funding lifesaving research and raising public awareness through The Estée Lauder Companies’ Breast Cancer Campaign (⁵¹).
• Tom Ford, a designer for TOM FORD BEAUTY, an Estée Lauder Companies brand, was inducted into The Fragrance Foundation’s Hall of Fame (⁵²).
• The company was named the top-rated workplace by job site Indeed and recognized by Forbes as one of America's best employers for women (⁵³).
• Estée Lauder Companies was named to Forbes' inaugural list of the world's top female-friendly companies and included in the CDP's Climate A List for the second consecutive year (⁵⁴).

Question: Overall how did the company perform financially in 2022 and 2023?

• In 2022, Estée Lauder reported net sales of $17.74 billion, a 9% increase from the previous year's $16.22 billion (⁵⁵).
• The company's net earnings were $2.39 billion, compared to $2.87 billion in the previous year (⁵⁵).
• Total reported operating income increased to $3.17 billion from $2.62 billion in the previous year (⁵⁵).
• Estée Lauder's Q4 2022 net sales were $3.56 billion, a 10% decrease from $3.94 billion in the previous year (⁵⁵).
• The company faced challenges such as record inflation, supply chain disruptions, a strengthening U.S. dollar, and COVID-19 restrictions in Hainan (⁵⁶).
• Estée Lauder signed an agreement to acquire the TOM FORD brand, with the transaction expected to be completed in the fiscal 2023 fourth quarter (⁵⁷).
• The company invested $419 million in capital expenditures and returned $708 million in cash to stockholders through dividends and share repurchases (⁵⁸).
• Estée Lauder plans to invest in its business during the volatile fiscal year 2023, including investments in advertising, innovation, its innovation center in Shanghai, and its manufacturing facility in Japan (⁵⁹).

Question: Does the company work with any of the following companies, Palantir, o9, Aera Technology, Dataiku, Kinaxis?

• Estee Lauder is working with o9 Solutions on a multi-year journey to transform its Global Supply Chain Demand and Supply Planning capabilities using o9 Solutions' next-generation, AI-enabled platform (⁶⁰).
• The platform allows Estee Lauder to review how certain drivers, such as new product launches, promotions, influencer marketing, gift sets, and others are impacting baseline statistical forecasts (⁶¹).
• From a supply perspective, the o9 platform generates production plans based on constraints across all product categories (⁶²).
• Naresh Rajanna, Vice President of Global Supply Chain at Estee Lauder, mentioned that the o9 platform has modernized their planning process by taking their master data, applying new business-defined prioritization logic, and concurrently solving known constraints to generate their most feasible supply plan (⁶³).

No information available about Estee Lauder working with Palantir, Aera Technology, Dataiku, or Kinaxis.

Question: Does the company use any of the following technologies, AWS, GCP, Azure, Redshift, Snowflake, Databricks, SAP, Oracle, Dynamics365?

• The Estee Lauder Companies selected Microsoft Azure Cloud Services for Application Hosting and Computing Services in 2021 (⁶⁴).

No other information about the use of AWS, GCP, Redshift, Snowflake, Databricks, SAP, Oracle, or Dynamics365 is available in the provided documents.

Footnotes

1. (Earning Call Transcript 2022 q2) By the way, this is a great question, and I admire the knowledge you have of our amazing talented team. So thank you for the question. And so what youre seeing actually is the reflection of our culture. What youre seeing is some organization changes, reflecting the shape of the business, particularly the elevation of China to be an independent region, given the importance of this region and the need of coordination with travel retail with the other key part of the Company, including online. And so thats an important next step that will make our ability to work with China and our ability of our China team to get support for grow the capabilities increased. ↩

2. (Earning Call Transcript 2019 q4) Total cash returned to stockholders exceeded 10.5 billion and cash flow from operations skyrocketed from 700 million to 2.5 billion.In addition to these financial results we further diversified our business and built a more flexible financial model. We developed processes to drive more collaborative teamwork and invested in human capital including recruiting external talent to bring fresh perspectives. Our workplace is now more diverse and inclusive and we amplified our family values. These changes have created a more streamlined integrated organization and a stronger foundation that we believe will enable us to continue our growth trajectory. As we start fiscal year 2020 we are continuing to adapt our strategy to reflect a continuously changing environment. ↩

3. (10k Annual Report 2018) These adjustments were not material for all periods presented. Accrued restructuring charges at June 30, 2018 are expected to result in cash expenditures funded from cash provided by operations of approximately $125 million, $44 million, $9 million and $3 million for each of fiscal 2019, 2020, 2021 and 2022, respectively.\nGlobal Technology Infrastructure\nIn October 2015, the Company approved plans to transform and modernize its global technology infrastructure (\u0093GTI\u0094) to fundamentally change the way the Company delivers information technology services internally (such initiative, the \u0093GTI Restructuring\u0094). As part of the GTI Restructuring, the Company transitioned its GTI from Company-owned assets to a primarily vendor-owned, cloud-based model where the Company pays for services as they are used. The Company incurred restructuring charges of $46 million for the year ended June 30, 2016, reflecting contract terminations of $24 million, asset write-offs of $18 million and employee-related costs of $4 million. Other charges in connection with the implementation of this initiative were $7 million for the year ended June 30, 2016, primarily related to consulting services. ↩

4. (Earning Call Transcript 2018 q3) We have reengineered our financial structure to make this happen, and our results this quarter are proof of our ability to capitalize on positive industry trends. Our winning strategy is centered on activating and accelerating multiple engines of growth. As our business flourished around the globe, we continue to support the momentum of our fastest growing brands, countries and channels. They are gaining greater traction, as we develop more growth engines in each area. We opened new doors in consumer preferred channels and retailers, and closed less successful ones. ↩

5. URL:https://www.elcompanies.com/en/news-and-media/newsroom/press-releases/2018/10-1-18-leadership Since joining the company in September 2016 as Senior Vice President, Strategy and New Business Development, Mr. Ross has played an integral role, in close partnership with the CEO and CFO, in developing both the company’s 10-Year Strategic Compass and its corporate strategy, which is pivoting the business to win and helping to drive long-term sustainable growth. Mr. Ross was critical in developing and leading many of the strategic choices that helped the company achieve its strong track record of performance, in the context of a dynamic industry and volatile geopolitical backdrop. Mr. Ross also further refined our approach to new business due diligence and has developed key relationships with founders early in the discovery process. Under his leadership of New Business Development, the company acquired two of its fast growing brands: BECCA, and the company’s biggest acquisition to date, Too Faced. “Central to our record performance has been our ability to unleash the power of our brand portfolio and our multiple engines of growth. ↩

6. URL:https://blucactus.blue/what-is-estee-lauders-marketing-strategy/ Distribution strategy Estée Lauder’s digital distribution marketing strategy is also very interesting. It has a limited distribution system to stay positioned as a luxury brand. Its products are sold in shopping malls and luxury department stores. Therefore, when analyzing this distribution system, there is no doubt that it has limited targeted customers. The company’s product portfolio is not very extensive since the brand wants to remain premium . ↩

7. (Earning Call Transcript 2019 q2) In the next two quarters, we plan to invest more behind our innovation to further build our share to continue fueling our innovation success. We expect to invest behind important new product launches such as Clinique, upcoming innovations in popular products. And that leveraging our brands during Chinese New Year, we robust advert in dollars in beautiful dedicated products. Were also locating additional resources to strengthen our capabilities throughout our business. Our strategy is to further build our global share and drive long term profitable growth. ↩ ↩²

8. URL:https://www.elcompanies.com/en/news-and-media/newsroom/press-releases/2020/06-22-2020 Press Release , Jun 22, 2020 The Estée Lauder Companies’ (ELC) talent philosophy is focused on strategically aligning the expertise, capabilities and experiences of high-potential leaders with the biggest opportunities that drive long-term, sustainable growth. Today, the company is pleased to announce two important leadership updates that will further strengthen ELC’s business strategy and ability to “run and transform” with an eye to the future. These changes are effective July 1, 2020: Andrew Ross will lead Strategy, New Business Development and Integration. Andrew will report jointly to Fabrizio Freda, President and Chief Executive Officer, and Tracey T. Travis, Executive Vice President and Chief Financial Officer. He will remain a member of the company’s Executive Leadership Team. ↩

9. URL:https://www.elcompanies.com/en/news-and-media/newsroom/press-releases/2020/06-22-2020 Andrew Ross to Lead Strategy, New Business Development and Integration Since joining the company in 2016, Andrew has played an integral role in developing its 10-Year Strategic Compass and a strong global growth strategy that pivots the business to win by helping to drive long-term sustainable performance. Andrew has been critical in developing and collaborating closely with company leaders to drive many of the strategic choices that have helped achieve a strong track record of performance, particularly against a backdrop of increasing volatility and accelerated forces of change. Unleashing the power of ELC’s brand portfolio and multiple engines of growth has been central to the company’s record performance. Andrew’s excellent pulse on industry and consumer trends, and his acute ability to identify areas to strengthen and diversify ELC’s brand portfolio, has enabled the New Business Development (NBD) team to implement a progressive Mergers and Acquisition (M&A) strategy combining acquisitions and minority investments to optimize access, acquisition cost and return on investment. The Estée Lauder Companies’ recent acquisition of Dr. Jart+ and men’s grooming brand Do The Right Thing are an example of this investment-to-acquisition strategy in action. ↩

10. URL:https://www.elcompanies.com/en/news-and-media/newsroom/company-features/2021/steps-into-the-future An on-site solar array at ELC’s Melville, NY campus, part of the company’s growing renewable energy portfolio. While this is only a small portion of ELC’s work, the company is also committed to taking its commitments to the next level and is building upon this legacy. The company is committed to: Elevating its climate actions and setting ambitious science-based targets (SBTs) for greenhouse gas emissions. Increasing its focus on racial equity and committing to donating $10 million over the next three years to support racial and social justice. Aiming to level the playing field for all genders inside and outside of the company through its women’s equity strategy: Opening Doors: Women’s Advancement and Gender Equality . ↩

11. URL:https://blucactus.blue/what-is-estee-lauders-marketing-strategy/ In this way, it has been expanding the distribution of its products according to the scope of its profits and its profitability. Promotion and advertising strategy Estée Lauder continues performing a practice that other luxury brands have perhaps already forgotten. They are still giving out free samples. Similarly, the company has carried out varied promotional campaigns, such as purchase-for-purchase to keep its loyal customers’ attention. Gift-for-purchase has been another of the brand’s promotional campaigns. ↩

12. URL:https://ivypanda.com/essays/estee-lauder-case-study/ The slogan employed by the company is to ‘imagine, integrate and innovate’ which used by the company to achieve its vision, mission and set strategic objectives. The Estee Lauder Companies use technology and innovation as part of the operations of the company to development superior reputation for themselves that pertains to elegance, luxury and extremely good quality. The company and seek to uphold the finest possible standards of excellence when it comes to providing the customers with its good s and services. The company seeks to understand its customers and the target market to comprehend their diverse needs. The company is extensively involved in the research and development of products which fulfill the skin care, hair care, perfume and make up needs of its target markets. ↩

13. URL:https://marketrealist.com/2015/08/estee-lauder-expands-business-brand-acquisitions/ Recent acquisition spree The beauty and personal care sector has seen a high level of merger and acquisition activity in the last two years. In November 2014, EL completed its acquisition of Le Labo, a high-end fragrance and sensory lifestyle brand. In January 2015, EL completed its acquisition of GLAMGLOW, a Hollywood skincare brand focused on face-acting treatment masks designed to deliver stunning, camera-ready results. Other players in this sector are also on an merger and acquisition spree. Coty (COTY) recently entered into a definitive merger agreement with 43 of Procter & Gamble’s (PG) beauty brands. ↩ ↩²

14. (10k Annual Report 2022) The excess of the total consideration transferred over the fair value of the net tangible and intangible assets acquired was recorded as goodwill. To determine the acquisition date estimated fair value of intangible assets acquired, the Company applied the income approach, specifically the multi-period excess earnings method for customer relationships and the relief-from-royalty method for trademarks. The significant assumptions used in these approaches include revenue growth rates and profit margins, terminal values, weighted-average cost of capital used to discount future cash flows, and a customer attrition rate for customer relationships and royalty rates for trademarks.\nThe allocation of the total consideration transferred, including immaterial measurement period adjustments was finalized during the fiscal 2022 third quarter and recorded as follows:\n(In millions)\nMarch 31, 2022\nCash\n$\n35\nAccounts receivable\n64\nInventory\n190\nOther current assets\n33\nProperty, plant and equipment\n40\nOperating lease right-of-use assets\n40\nIntangible assets\n1,917\nGoodwill\n1,296\nDeferred income taxes\n8\nTotal assets acquired\n3,623\nAccounts payable\n21\nOperating lease liabilities\n8\nOther accrued liabilities\n78\nDeferred income taxes\n479\nLong-term operating lease liabilities\n45\nTotal liabilities assumed\n631\nTotal consideration transferred\n$\n2,992\nThe results of operations for DECIEM and acquisition-related costs were not material to the Companys consolidated statements of earnings for the year ended June 30, 2021. Pro forma results of operations reflecting the acquisition of DECIEM are not presented, as the impact on the Company\u2019s consolidated financial results would not have been material.\nF-24\nTable of Contents\nTHE EST\u00c9E LAUDER COMPANIES INC.\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nFiscal 2020\nOn December 18, 2019, the Company acquired the remaining\n66.66\n% equity interest in Have&Be Co. Ltd. (\u201cHave & Be\u201d), the global skin care company behind Dr.Jart+ and men\u2019s grooming brand Do The Right Thing, for $\n1,268\nmillion in cash. Based on the final purchase price and working capital adjustments, the Company estimated a refund receivable of $\n32\nmillion that was outstanding as of June 30, 2020 and was received in fiscal 2021. ↩ ↩²

15. URL:https://www.linkedin.com/jobs/view/vp-international-finance-strategic-initiatives-at-the-est%C3%A9e-lauder-companies-inc-3587633685 Back Submit Summary This role will be responsible for providing financial guidance to the international organization on key strategic initiatives. Develops a horizontal analysis of global business issues, highlights the most value-added opportunities, and recommends appropriate actions. Partners with the Regional Finance leaders and international leadership enabling them to make informed decisions. Examples of key strategic initiatives (illustrative, not exhaustive) are the economics of the Square (bringing together China, APAC and Travel Retail), and gaining market share with the traveling Chinese consumer Key Responsibilities Work across the global finance community and cross-functionally to identify tradeoffs and drive decision making for key strategic initiatives, as identified by the corporate strategy & International leadership team. Develops a horizontal analysis of global business issues, highlights value-added opportunities and recommends actions. ↩

16. URL:https://www.linkedin.com/jobs/view/vp-international-finance-strategic-initiatives-at-the-est%C3%A9e-lauder-companies-inc-3587633685 Provides advice and partnership to the SVP, International Finance, and the international leadership team to proactively drive strategic initiatives through a complex global matrix. Links initiatives/programs to the company’s financial performance and expectations. Collaborate with Transformation office, corporate strategy and local China and TR teams to develop scenario to manage the Square. Collaborate with Consumer Insights and Subcategory Strategy to deploy and drive share gains in Key and Emerging Markets. Focused priorities to include Consumer Insights, Share Analysis, Growth Engines, Must Wins and Category/Subcategory Strategy. ↩ ↩²

17. (10k Annual Report 2019) Collectively, these actions are resulting in a net reduction of the workforce, which includes position eliminations, the re-leveling of certain positions and an investment in new capabilities, as well as consulting fees, implementation costs and temporary labor backfill.\n\u00b7\nOptimize Corporate and Region Market Support Structures\n\u0096 The Company approved initiatives to enhance its go-to-market support structures and achieve synergies across certain geographic regions, brands and channels. These initiatives are primarily intended to shift certain areas of focus from traditional to social and digital marketing strategies to provide enhanced consumer experience, as well as to support expanded omnichannel opportunities. These actions are resulting in a net reduction of the workforce, which includes position eliminations, the re-leveling of certain positions and an investment in new capabilities. The Company also approved consulting and other professional services related to the design of future structures, processes and technologies and, to a lesser extent, other costs for recruitment and training related to new capabilities. In addition, the Company approved initiatives to enhance consumer engagement strategies across certain channels in Europe, which resulted in product returns.\n\u00b7\nExit Underperforming Businesses\n\u0096 To further improve profitability in certain areas of the Company\u0092s brands and regions, the Company approved initiatives to exit certain businesses in select markets and channels of distribution. ↩ ↩²

18. (Earning Call Transcript 2020 q4) We are also implementing sustainable office practices in mainland China and exploring green energy solutions there. For fiscal year 2021, we are investing in several strategic priorities intended to drive our long-term sustainable growth. Among the priorities are enhancing manufacturing capabilities, expanding online fulfillment capabilities and further funding growth opportunity in Asia Pacific, including our new state-of-art innovation center in Shanghai. While the world continues to confront many unknowns related to the pandemic, certain realities have emerged that have accelerated our strategy. As online has quickly grown, we need to more aggressively adjust our brick-and-mortar footprint and more closely align with how and where the consumer wants to shop. ↩ ↩²

19. (Earning Call Transcript 2018 q4) Fiscal year 2018 gave us a lot to celebrate, but we are now focused on the future. To that end, we updated our 10-year compass which identifies industry and demographic trends. These insights confirmed the strategic focus areas where we have invested to build growth and where we plan to continue over the next few years including skin care, online, traveling consumers, digital marketing and omni-channel retail. We will continue to seek growth globally among a more diverse and growing middle class, especially in growth markets like China and in our U.S. home market. We are the number one prestige beauty company in the U.S. which still remains the largest market and where we are focused on regaining share. ↩

20. (Earning Call Transcript 2018 q1) For example, we are optimizing our go-to-market selling and education areas and providing employees with digital tools to better and more efficiently serve our retailers and our consumers. We established a new global shared services organization called 1Source (23:30), which is designed to efficiently deliver fundamental services to the company. Initially, 1Source (23:35) will provide select finance, legal, and HR services and, over time, will expand its offering to generate even more services. And our brands are building locally-relevant consumer engagement capabilities with increased investment in digital assets and experiences. We are very pleased with the progress weve made and the hard work of all of the employees involved who have embraced Leading Beauty Forward with The Est\u00e9e Lauder Companies competitive spirit. ↩

21. URL:https://www.cosmeticsbusiness.com/news/article_page/Estee_Lauder_to_cut_25_of_staff_in_costsaving_scheme/117847 Estée Lauder said this was partially offset by lower sales in other designer fragrances. The Leading Beauty Forward initiative is expected to launch in Q4 2016. The scheme will see Estée Lauder reduce costs, redesign the company’s brand and restructure corporate functions. The company will also invest in its growth through new products, social media, communications and other advertising. The initiative is expected to boost revenue by $200-$300m before tax. ↩

22. (10k Annual Report 2018) The Company also believes that decision-making in key areas of innovation, marketing and digital communications should be moved closer to the consumer to increase speed and local relevance.\nThe Company plans to approve specific initiatives under LBF through fiscal 2019 related to the optimization of select corporate functions, supply chain activities, and corporate and regional market support structures, as well as the exit of underperforming businesses, and expects to complete those initiatives through fiscal 2021.\nThe Company previously estimated\nthat LBF would result in related restructuring and other charges totaling between $600 million and $700 million, before taxes. After reviewing additional potential initiatives and the progress of previously approved initiatives under LBF that are being implemented, the Company has revised its estimates for cost approvals under the Program. Inclusive of approvals from inception through June 30, 2018, the Company now estimates that LBF may result in related restructuring and other charges totaling between $900 million and $950 million, before taxes.\nThe Company previously estimated\na net reduction over the duration of LBF in the range of approximately 900 to 1,200 positions globally. The Company revised these estimates based on the review of the Program noted above. At this time, the Company estimates a net reduction over the duration of LBF in the range of 1,800 to 2,000 positions globally, which is about 4% of its current workforce. ↩

23. (10k Annual Report 2020) The Company also approved other charges to support the LBF Project Management Office (\u201cPMO\u201d), primarily consisting of internal and external resources that are intended to further drive project integration, organizational design capabilities and change management throughout the organization.\nThe design of certain corporate functions included the creation of a shared-services structure, either using Company resources or through external service providers. As part of the service delivery model, the Company approved the organizational design of the management and governance platform of a shared-services structure using Company resources, as well as the transition of select transactional activities to an external service provider, which is resulting in other charges for implementation, project and consulting costs.\n\u2022\nOptimize Supply Chain\n\u2013The Company approved certain activities related to initiatives to centralize the Company\u2019s supply chain management, redesign certain supply chain planning and transportation management activities, improve the organizational design of manufacturing and engineering processes related to certain product lines, and enable distribution capabilities and generate efficiencies through an external service provider. Collectively, these actions are resulting in a net reduction of the workforce, which includes position eliminations, the re-leveling of certain positions and an investment in new capabilities, as well as consulting fees, implementation costs and temporary labor backfill.\n\u2022\nOptimize Corporate and Region Market Support Structures\n\u2013 The Company approved initiatives to enhance its go-to-market support structures and achieve synergies across certain geographic regions, brands and channels. These initiatives are primarily intended to shift certain areas of focus from traditional to social and digital marketing strategies to provide enhanced consumer experience, as well as to support expanded omnichannel opportunities. These actions are resulting in a net reduction of the workforce, which includes position eliminations, the re-leveling of certain positions and an investment in new capabilities. ↩ ↩²

24. (10k Annual Report 2021) The Company also approved consulting and other professional services related to the design of future structures, processes and technologies and, to a lesser extent, other costs for recruitment and training related to new capabilities. In addition, the Company approved initiatives to enhance consumer engagement strategies across certain channels in Europe, which resulted in product returns.\n\u2022\nExit Underperforming Businesses\n\u2013 To further improve profitability in certain areas of the Company\u2019s brands and regions, the Company approved initiatives to exit certain businesses in select markets and channels of distribution. The Company also decided to close a number of underperforming freestanding retail stores and exit mid-tier department stores for certain brands in the United States to redirect resources to other retail locations and channels with potential for greater profitability. These activities resulted in product returns, inventory write-offs, reduction of workforce, accelerated depreciation and termination of contracts.\nAs initiatives under the LBF Program progressed through implementation, the Company identified certain costs that were initially approved but will not be incurred, as well as other changes to the prior estimates. These adjustments are included in their respective period presented above, and were primarily related to estimated employee-related costs for certain employees who either resigned or transferred to other existing positions within the Company.\nLBF Program Restructuring and Other Charges\nRestructuring charges are comprised of the following:\nEmployee-Related Costs\n\u2013 Employee-related costs are primarily comprised of severance and other post-employment benefit costs, calculated based on salary levels, prior service and other statutory minimum benefits, if applicable. ↩

25. URL:https://sloanreview.mit.edu/audio/the-beauty-of-ai-estee-lauders-sowmya-gottipati/ The Beauty of AI: Estée Lauder’s Sowmya Gottipati June 14, 2022 / Technology Innovation Strategy Artificial Intelligence and Business Strategy The Artificial Intelligence and Business Strategy initiative explores the growing use of artificial intelligence in the business landscape. The exploration looks specifically at how AI is affecting the development and execution of strategy in organizations. In collaboration with Please enter a valid email address Thank you for signing up It might seem like cosmetics and perfume are products shoppers need to try out in person before buying, but artificial intelligence is opening up new avenues for reaching and understanding consumers — as well as new ways to manage supply chains. In this episode of the Me, Myself, and AI podcast, we learn how Estée Lauder’s Sowmya Gottipati leveraged her earlier technology leadership experience in telecommunications and broadcast media to deploy brand technology projects for a portfolio of cosmetics, fragrances, and skin and hair care product brands. She talks about AI’s role in product development, a virtual try-on tool for lipsticks and foundations, and a fragrance recommendation engine, as well as an application for supply and demand planning. ↩

26. URL:https://ww.fashionnetwork.com/news/Beauty-tech-estee-lauder-l-oreal-embrace-inclusivity-and-personalisation,1474681.html By Sandra Halliday Published Jan 11, 2023 Beauty tech may be most closely linked in many consumers’ minds to virtual try-on, but 2023 is a year in which companies are launching more ambitious initiatives. They’ll be designed to boost inclusivity, ramp up personalisation and take salon-tech-at-home devices into new beauty categories. Estée Lauder Companies And companies have hit the ground running this month so far. The Estée Lauder Companies (ELC) UK & Ireland on Wednesday launched a Voice-Enabled Makeup Assistant (VMA) application. It said this is a first-of-its-kind, artificial intelligence-powered mobile app to help visually impaired users more easily and confidently apply make-up. ↩

27. (Earning Call Transcript 2018 q4) Fast moving technology innovations continue to enhance the luxury beauty experience and we are advancing features like Augmented Reality and voice assisted shopping which are gaining favor among consumers. Behind the scenes, we are focusing on improving our capabilities in data and analytics. Using cutting edge tools and techniques we are connecting data and insights to measurable actions across our brands. Now I want to update you on the review of certain testing related to product advertising claim support that we discussed in our last call. The review is ongoing and based on the review to date the company does not believe that this matter will be material. ↩

28. URL:https://www.elcompanies.com/en/news-and-media/newsroom/company-features/2022/elc-zero100 A few examples of this include: Late-stage differentiation, which allows ELC to capture rapidly changing consumer demands with minimal excess and destruction Geography, which focuses on regionalization to source, make, and sell products in the same region (limiting transportation where possible) Collaboration across our value chain ecosystem, including suppliers and partners, and our Green Building Standards, including our solar installations at select facilities globally Additionally, from a climate perspective, the company is focused on reducing Scope 3 emissions from purchased goods and services, upstream transportation and distribution, and business travel. “Technology impacts every aspect of our business, and how we use technology is and will continue to be part of our ongoing transformation and broader corporate strategy,” said Lauder. “We are leveraging existing capabilities and innovating new foresight analytic capabilities to identify upcoming trends. By trend forecasting, we ensure that we are delivering the right products to the right consumers at the right time. We have better accuracy in our demand planning—we are producing what consumers need and want—which inherently helps to reduce waste.” For example, Aveda , an ELC brand, was one of the first beauty players to establish a successful, commercial blockchain pilot. ↩ ↩² ↩³

29. (Earning Call Transcript 2018 q2) For the quarter, we were again the top Company among prestige beauty brands in earned media value in the U.S., accordingly to drive dynamics. Staying ahead of the curve, our brands are exploring new technologies to enhance the consumer experience. Estee Lauder collaborated with Google to offer voice-activated night time skin care advice over Google Assistant, extending High-Touch into their home. We are also bringing breakthrough technology into skin care and foundation products. Our innovations are accelerating and we are excited about scientific advances in new products that we believe will help fuel our momentum and continue our share gains. ↩

30. URL:https://www.elcompanies.com/en/news-and-media/newsroom/company-features/2021/elc-expand-its-technology That’s why we are excited to grow our presence around the world, hire competitive talent, expand our capabilities and partner together to build the beauty experience of tomorrow.” Building upon the success of the company’s Global Digital Technology Center in Long Island City that first opened in 2018, ELC will invest in additional digital tech centers in different regions around the world to complement its existing 500+ talented IT professionals located in 32 countries across the globe, enhancing the diversity of their innovation capabilities. Employees work on the roof of the Long Island City Global Digital Technology Center ELC is pleased to share that the next tech center will be established in Bucharest, Romania. Bucharest was strategically selected as it has become an epicenter for top technology talent. The center will be home to supporting critical areas such as data analytics, omni-retail solutions, cloud technology, intelligent automation and more. ELC is constantly transforming to ensure the company delivers innovative technology solutions to the business while accelerating its digital capabilities and driving greater value.  ↩ ↩² ↩³ ↩⁴

31. URL:https://pandata.co/blog/estee-lauders-journey-to-building-its-own-ethical-ai-practice/ 30 Mar Estée Lauder’s Journey to Building Its Own Ethical AI Practice This article is part of a series featuring big brands that are building responsible AI solutions to solve real problems—and what we can learn from them. To receive more trustworthy AI news and expert takeaways, subscribe to our Voices of Trusted AI email digest . When designed correctly, AI can have a powerful impact on your business. Take Estée Lauder, for instance. The billion dollar makeup, skin care, fragrance, and hair care brand has incorporated its own ethical machine learning practice into its business strategy to successfully drive product development and supply chain efficiency. ↩

32. URL:https://pandata.co/blog/estee-lauders-journey-to-building-its-own-ethical-ai-practice/ A consumer data platform that makes product recommendations based on previous purchases. A supply and demand planning application, which helped the company see a 30% increase in forecasting accuracy. The company then used the garnered data from these tools to make informed decisions about new product developments and supply chain adjustments. Developing an Ethical AI Strategy Estée Lauder would have seen little success with these developments if it weren’t for their responsible machine learning strategy. When designing AI/ML models, especially ones that involve humans, it is critical that fairness, transparency, and privacy are the pillars of your AI strategy . ↩

33. URL:https://www.chargedretail.co.uk/2023/01/13/estee-lauder-companies-launch-ai-app-for-visually-impaired-users/ Isabel Cameron The Estée Lauder Companies (ELC) has launched a new AI-powered app to help visually impaired make-up users. The voice-enabled make up assistant (VMA) is a “first-of-its-kind” creation which is driven by ELC’s AR and AI technology. It uses voice instruction to guide users, offering feedback on whether their make-up is evenly and accurately applied. Using AI and machine learning, the app identifies the make-up on the user’s face and assesses its uniformity and boundaries. It then identifies and communicates any areas which may require more attention. ↩

34. URL:https://www.elcompanies.com/en/news-and-media/newsroom/press-releases/2023/11-01-2023 VMA’s pioneering smart mirror technology is driven by ELC’s Augmented Reality and Artificial Intelligence capabilities and was developed using machine learning. VMA uses voice instruction technologies to assist the user in makeup application; users receive audio feedback and tips on whether their lipstick, eyeshadow, or foundation is evenly applied. Using AI, ELC’s VMA identifies makeup applied on a user’s face and assesses the uniformity and boundaries of application and coverage. VMA identifies any areas on the face that may require more accurate application and audibly describes where touch ups may be needed. “We are committed to building innovative technology solutions that make beauty truly inclusive to everyone. ↩

35. URL:https://www.elcompanies.com/en/news-and-media/newsroom/company-features/2022/elc-zero100 ELC is embarking on a digital transformation with state-of-the-art enhancements to its global supply chain. The goal is to accelerate the use of data and analytics to identify operational excellence opportunities that will enable sufficiency, artisanal quality, and responsiveness. “For us, embedding sustainability isn’t just about being environmentally responsible as an organization—and looking at our impact on the planet and our products. It’s also about addressing urgent issues affecting our global communities, like gender and racial equality, which are deeply interconnected with the climate crisis,” said Mahon. “As we continue to invest in the technology and infrastructure needed to effectively tackle environmental issues, such as solutions like VPPAs, forestry and on-site solar, we must also continue to help to build a better society, one that serves the many, not the few. ↩

36. (10k Annual Report 2021) These activities will result in a net reduction in workforce, inventory and other asset write-offs, product returns, and termination of contracts.\n\u2022\nOptimize Digital Organization and Other Go-To-Market Organizations\n\u2013 The Company approved initiatives to enhance its go-to-market capabilities and shift more resources to support online growth. These actions will result in a net reduction of the workforce, which includes position eliminations, the re-leveling of certain positions and an investment in new capabilities.\n\u2022\nOptimize Select Marketing, Brand and Global Functions\n\u2013 The Company has started to reduce its corporate office footprint and is moving toward the future of work in a post-COVID environment, by restructuring where and how its employees work and collaborate. These actions will result primarily in lease termination fees.\n\u2022\nExit of the Global Distribution of BECCA Products\n\u2013 In reviewing the Companys brand portfolio to improve efficiency and to ensure the sustainability of long-term investments, the decision was made to exit the global distribution of BECCA products due to its limited distribution, the ongoing decline in product demand and the challenging environment caused by the COVID-19 pandemic. These activities resulted in charges for the impairment of goodwill and other intangible assets, product returns, termination of contracts, and employee severance. The Company expects to substantially complete these initiatives during fiscal 2022.\nPCBA Program Restructuring and Other Charges\nRestructuring charges are comprised of the following:\nEmployee-Related Costs \u2013\nEmployee-related costs are primarily comprised of severance and other post-employment benefit costs, calculated based on salary levels, prior service and other statutory minimum benefits, if applicable.\nAsset-Related Costs\n\u2013 Asset-related costs primarily consist of asset write-offs or accelerated depreciation related to long-lived assets in certain freestanding stores (including rights associated with commercial operating leases and operating lease right-of-use assets) that will be taken out of service prior to their existing useful life as a direct result of a restructuring initiative. ↩

37. (Earning Call Transcript 2018 q1) The majority were retailers and most of them in the European region, demonstrating the scalability of our digital model. Spurred by the growth of social media and technology advancement, mobile is the focus of our digital strategies. In the recent quarter, mobile accounted for 70% of our global online traffic. We are seeing the results of our investment in mobile, as it is an important factor driving first time digital consumers in emerging markets and increasing the frequency of purchases in more developed countries. We also continue to strengthen our position in specialty-multi retailers globally. ↩

38. (Earning Call Transcript 2021 q2) For example, our loyalty programs are working better and better and we have more loyalty program as we discussed and theyre getting expanded and the level of loyalty is going up and the re-pastures rate meaning theyre coming, that is going up. Then we see conversions very strong and traffic increasing and there are ways where the conversion will be driven will be maintained after. The most important of the investment were doing in order to maintain conversion also after COVID is the high touch services transfer online. So the chart with the consultants, digital try on, the live streaming opportunities, the use of our particularly the brand.com in this case also has media platform because we see that the time that the consumers are spending on online is increasing dramatically because when the digital try-on service, the possibility to consult, they spend more time and this time is time of disposure to our equity messages. So this is media value, this is really media value meaning we have more than half billion consumers coming on our site and more in this moment and then imagine that they stay nine minutes and they say if were to buy media to speak to half a billion consumers for nine minutes this will be a huge cost while building place is another benefit of our selling operations. ↩

39. (Earning Call Transcript 2022 q1) As we seek to engage with consumers in innovative ways, we advanced our work with Instagram, Snapchat, TikTok, WeChat and others to capitalize on exciting trends in social commerce. We also deploy the technology solution, which enables brands to better customized consumer outreach by leveraging data to merchandise and personalized communication. This is leading to higher conversion rates for new consumers and a deeper level of relationship building after the initial purchase to force retention. Initiatives such as this, position us well to realize even greater success with trial and repeat. We continued to invest in online to strategically extend our consumer reach and realized promising results. ↩

40. (10k Annual Report 2022) In addition, the Company has approved initiatives to reduce organizational complexity and leverage scale across various Global functions. These actions will result in asset write-offs, employee severance, lease termination fees, and consulting and other professional services for the design and implementation of the future structures and processes.\n\u2022\nOptimize Distribution Network\n\u2013 To help restore profitability to pre-COVID-19 pandemic levels in certain areas of its distribution network and, as part of a broader initiative to be completed in phases, the Company has approved initiatives to close a number of underperforming freestanding stores, counters and other retail locations, mainly in certain affiliates across all geographic regions, including the Companys travel retail network. These anticipated closures reflect changing consumer behaviors including higher demand for online and omnichannel capabilities. These activities will result in a net reduction in workforce, inventory and other asset write-offs, termination of contracts, and product returns.\n\u2022\nExit of the Global Distribution of BECCA Products\n\u2013 In reviewing the Companys brand portfolio to improve efficiency and the sustainability of long-term investments, the decision was made to exit the global distribution of BECCA products due to its limited distribution, the ongoing decline in product demand and the challenging environment caused by the COVID-19 pandemic. These activities resulted in charges for the impairment of goodwill and other intangible assets, product returns, termination of contracts, and employee severance. ↩

41. (10k Annual Report 2021) We may not be able to attract, assimilate or retain necessary personnel in the future, and our failure to do so could have a material adverse effect on our business. This risk may be exacerbated by the stresses associated with the implementation of our strategic plan and other initiatives, as well as by market conditions.\nWe are subject to risks related to the global scope of our operations.\nWe operate on a global basis, with a majority of our fiscal 2021 net sales and operating income generated outside the United States. We maintain offices in over 50 countries and have key operational facilities located inside and outside the United States that manufacture, warehouse or distribute goods for sale throughout the world. Our global operations are subject to many risks and uncertainties, including: (i) fluctuations in foreign currency exchange rates and the relative costs of operating in different places, which can affect our results of operations, the value of our foreign assets, the relative prices at which we and competitors sell products in the same markets, the cost of certain inventory and non-inventory items required in our operations, and the relative prices at which we sell our products in different markets; (ii) foreign or U.S. laws, regulations and policies, including restrictions on trade, immigration and travel, operations, and investments; currency exchange controls; restrictions on imports and exports, including license requirements; tariffs; and taxes; (iii) lack of well-established or reliable legal and administrative systems in certain countries in which we operate; (iv) adverse weather conditions and natural disasters; and (v) social, economic and geopolitical conditions, such as a pandemic, terrorist attack, war or other military action. These risks could have a material adverse effect on our business.\nA disruption in our operations or supply chain could adversely affect our business.\nAs a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes, capacity constraints, disruptions in ingredient, material or packaging supply, as well as global shortages, disruptions in supply chain or information technology, loss or impairment of key manufacturing sites or suppliers, product quality control, safety, increase in commodity prices and energy costs, licensing requirements and other regulatory issues, as well as natural disasters and other external factors over which we have no control. ↩ ↩² ↩³

42. (10k Annual Report 2018) Our success also depends, in part, on our continuing ability to identify, hire, train and retain other highly qualified personnel. Competition for these employees can be intense. We may not be able to attract, assimilate or retain qualified personnel in the future, and our failure to do so could adversely affect our business. This risk may be exacerbated by the stresses associated with the implementation of our strategic plan and other initiatives.\nWe are subject to risks related to the global scope of our operations.\nWe operate on a global basis, with a majority of our fiscal 2018 net sales and operating income generated outside the United States.\nWe maintain offices in over 50 countries and have key operational facilities located inside and outside the United States that manufacture, warehouse or distribute goods for sale throughout the world. Our global operations are subject to many risks and uncertainties, including:\n\u00b7\nfluctuations in foreign currency exchange rates and the relative costs of operating in different places, which can affect our results of operations, the value of our foreign assets, the relative prices at which we and competitors sell products in the same markets, the cost of certain inventory and non-inventory items required in our operations, and the relative prices at which we sell our products in different markets;\n\u00b7\nforeign or U.S. laws, regulations and policies, including restrictions on trade, immigration and travel, operations, and investments; currency exchange controls; restrictions on imports and exports, including license requirements; tariffs; and taxes;\n\u00b7\nlack of well-established or reliable legal and administrative systems in certain countries in which we operate;\n\u00b7\nadverse weather conditions and natural disasters; and\n\u00b7\nsocial, economic and geopolitical conditions, such as terrorist attacks, war or other military action.\nThese risks could have a material adverse effect on our business, prospects, reputation, results of operations and financial condition.\n15\nTable of Contents\nA disruption in our operations or supply chain could adversely affect our business and financial results.\nAs a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes, disruptions in supply chain or information technology, loss or impairment of key manufacturing sites or suppliers, product quality control, safety, increase in commodity prices and energy costs, licensing requirements and other regulatory issues, as well as natural disasters and other external factors over which we have no control. ↩ ↩² ↩³

43. (10k Annual Report 2021) The unexpected loss of, or misconduct by, one or more of our key employees could adversely affect our business. Our success also depends, in part, on our continuing ability to identify, hire, train and retain personnel across all levels of our business. Competition for employees can be intense. We may not be able to attract, assimilate or retain necessary personnel in the future, and our failure to do so could have a material adverse effect on our business. This risk may be exacerbated by the stresses associated with the implementation of our strategic plan and other initiatives, as well as by market conditions.\nWe are subject to risks related to the global scope of our operations.\nWe operate on a global basis, with a majority of our fiscal 2021 net sales and operating income generated outside the United States. ↩ ↩²

44. (10k Annual Report 2022) The unexpected loss of, or misconduct by, one or more of our key employees could adversely affect our business. Our success also depends, in part, on our continuing ability to identify, hire, train and retain personnel across all levels of our business. Competition for employees can be intense. We may not be able to attract, assimilate or retain necessary personnel in the future, and our failure to do so could have a material adverse effect on our business. This risk may be exacerbated by the stresses associated with the implementation of our strategic plan and other initiatives, as well as by market conditions.\nWe are subject to risks related to the global scope of our operations.\nWe operate on a global basis, with a substantial majority of our fiscal 2022 net sales and operating income generated outside the United States. ↩ ↩²

45. (10k Annual Report 2021) If our products are found to be defective or unsafe, our product claims are found to be deceptive, or our products otherwise fail to meet our consumers\u2019 expectations, our relationships with customers or consumers could suffer, the appeal of our brands could be diminished, and we could lose sales and become subject to liability or claims, any of which could result in a material adverse effect on our business. In addition, counterfeit versions of some of our products may be sold by third parties, which may pose safety risks, may fail to meet consumers\u2019 expectations, and may have a negative impact on our business.\nOur success depends, in part, on our key personnel.\nOur success depends, in part, on our ability to retain our key personnel, including our executive officers and senior management team. The unexpected loss of, or misconduct by, one or more of our key employees could adversely affect our business. Our success also depends, in part, on our continuing ability to identify, hire, train and retain personnel across all levels of our business. Competition for employees can be intense. ↩ ↩²

46. (10k Annual Report 2020) Our global operations are subject to many risks and uncertainties, including:\n\u2022\nfluctuations in foreign currency exchange rates and the relative costs of operating in different places, which can affect our results of operations, the value of our foreign assets, the relative prices at which we and competitors sell products in the same markets, the cost of certain inventory and non-inventory items required in our operations, and the relative prices at which we sell our products in different markets;\n\u2022\nforeign or U.S. laws, regulations and policies, including restrictions on trade, immigration and travel, operations, and investments; currency exchange controls; restrictions on imports and exports, including license requirements; tariffs; and taxes;\n\u2022\nlack of well-established or reliable legal and administrative systems in certain countries in which we operate;\n\u2022\nadverse weather conditions and natural disasters; and\n\u2022\nsocial, economic and geopolitical conditions, such as a pandemic, terrorist attack, war or other military action.\nThese risks could have a material adverse effect on our business.\nA disruption in our operations or supply chain could adversely affect our business.\nAs a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes, capacity constraints, disruptions in ingredient, material or packaging supply, as well as global shortages, disruptions in supply chain or information technology, loss or impairment of key manufacturing sites or suppliers, product quality control, safety, increase in commodity prices and energy costs, licensing requirements and other regulatory issues, as well as natural disasters and other external factors over which we have no control. If such an event were to occur, it could have a material adverse effect on our business.\nWe use a wide variety of direct and indirect suppliers of goods and services from around the world. Some of our products rely on a single or a limited number of suppliers. Changes in the financial or business condition of our suppliers could subject us to losses or adversely affect our ability to bring products to market. Further, the failure of our suppliers to deliver goods and services in sufficient quantities, in compliance with applicable standards, and in a timely manner could adversely affect our customer service levels and overall business. ↩ ↩² ↩³

47. (10k Annual Report 2018) This risk may be exacerbated by the stresses associated with the implementation of our strategic plan and other initiatives.\nWe are subject to risks related to the global scope of our operations.\nWe operate on a global basis, with a majority of our fiscal 2018 net sales and operating income generated outside the United States.\nWe maintain offices in over 50 countries and have key operational facilities located inside and outside the United States that manufacture, warehouse or distribute goods for sale throughout the world. Our global operations are subject to many risks and uncertainties, including:\n\u00b7\nfluctuations in foreign currency exchange rates and the relative costs of operating in different places, which can affect our results of operations, the value of our foreign assets, the relative prices at which we and competitors sell products in the same markets, the cost of certain inventory and non-inventory items required in our operations, and the relative prices at which we sell our products in different markets;\n\u00b7\nforeign or U.S. laws, regulations and policies, including restrictions on trade, immigration and travel, operations, and investments; currency exchange controls; restrictions on imports and exports, including license requirements; tariffs; and taxes;\n\u00b7\nlack of well-established or reliable legal and administrative systems in certain countries in which we operate;\n\u00b7\nadverse weather conditions and natural disasters; and\n\u00b7\nsocial, economic and geopolitical conditions, such as terrorist attacks, war or other military action.\nThese risks could have a material adverse effect on our business, prospects, reputation, results of operations and financial condition.\n15\nTable of Contents\nA disruption in our operations or supply chain could adversely affect our business and financial results.\nAs a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes, disruptions in supply chain or information technology, loss or impairment of key manufacturing sites or suppliers, product quality control, safety, increase in commodity prices and energy costs, licensing requirements and other regulatory issues, as well as natural disasters and other external factors over which we have no control. If such an event were to occur, it could have an adverse effect on our business and financial results.\nWe use a wide variety of direct and indirect suppliers of goods and services from around the world. Some of our products rely on a single or a limited number of suppliers. Changes in the financial or business condition of our suppliers could subject us to losses or adversely affect our ability to bring products to market. ↩ ↩² ↩³

48. (10k Annual Report 2019) We maintain offices in over 50 countries and have key operational facilities located inside and outside the United States that manufacture, warehouse or distribute goods for sale throughout the world. Our global operations are subject to many risks and uncertainties, including:\n\u00b7\nfluctuations in foreign currency exchange rates and the relative costs of operating in different places, which can affect our results of operations, the value of our foreign assets, the relative prices at which we and competitors sell products in the same markets, the cost of certain inventory and non-inventory items required in our operations, and the relative prices at which we sell our products in different markets;\n\u00b7\nforeign or U.S. laws, regulations and policies, including restrictions on trade, immigration and travel, operations, and investments; currency exchange controls; restrictions on imports and exports, including license requirements; tariffs; and taxes;\n\u00b7\nlack of well-established or reliable legal and administrative systems in certain countries in which we operate;\n\u00b7\nadverse weather conditions and natural disasters; and\n\u00b7\nsocial, economic and geopolitical conditions, such as terrorist attacks, war or other military action.\nThese risks could have a material adverse effect on our business.\nA disruption in our operations or supply chain could adversely affect our business.\nAs a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes, capacity constraints, disruptions in supply chain or information technology, loss or impairment of key manufacturing sites or suppliers, product quality control, safety, increase in commodity prices and energy costs, licensing requirements and other regulatory issues, as well as natural disasters and other external factors over which we have no control. If such an event were to occur, it could have a material adverse effect on our business.\nWe use a wide variety of direct and indirect suppliers of goods and services from around the world. Some of our products rely on a single or a limited number of suppliers. Changes in the financial or business condition of our suppliers could subject us to losses or adversely affect our ability to bring products to market. ↩ ↩² ↩³

49. URL:https://www.greaterzuricharea.com/en/news/estee-lauder-organon-and-apex-logic-receive-tell-awards Estée Lauder, Organon and Apex Logic receive Tell Awards November 22, 2022 Business environment News Lucerne/Galgenen/Freiburg - Estée Lauder Companies, Organon & Co. and Apex Logic have been honored with Tell Awards in New York for their investments in Switzerland. These were presented by Switzerland Global Enterprise and the Swiss Business Hub USA. Switzerland Global Enterprise , the official Swiss consultancy, promotion and platform organization for export and investment promotion, and the Swiss Business Hub USA have conferred Tell Awards on a trio of enterprises, namely Estée Lauder Companies , Organon & Co. and Apex Logic . According to comments from Daniel Bangser, Trade Commissioner of Switzerland, that appear in a press release , the companies received these awards, named after Swiss folk hero William Tell, in recognition of their significant direct investments in Switzerland. These companies “contribute so significantly to the Swiss economy” and embody “our shared values of quality, stability and innovation”, according to Ambassador Niculin Jäger, Consul General of Switzerland in New York. ↩

50. URL:https://www.elcompanies.com/en/news-and-media/newsroom/company-features/2021/newsweek-loyalty-programs Home News & Media Newsroom ELC Brands Receive Prestigious Recognition from Newsweek for Loyalty Programs ELC Brands Receive Prestigious Recognition from Newsweek for Loyalty Programs Company Feature , Apr 15, 2021 M·A·C Cosmetics, Estée Lauder and Aveda have been recognized on Newsweek’s list of “America’s Best Loyalty Programs 2021.” M·A·C Cosmetics’ “M·A·C Lover,” Estée Lauder’s “The Estée E-List,” and Aveda’s "Aveda Plus Rewards” (formerly known as “Pure Privilege”), loyalty programs were all named to the Newsweek list. This prestigious award is presented by Newsweek and Statista Inc., the world-leading statistics portal and industry ranking provider. The Newsweek list was announced in February 2021. As an early pioneer in beauty loyalty programs, The Estée Lauder Companies (ELC) now has 33 loyalty programs that are “live” (both online and omnichannel) across eight brands in twelve markets globally. At the time of the Newsweek recognition, ELC brands had over 19 million combined lifetime active members enrolled in loyalty programs, representing over $2 billion in lifetime loyalty sales. ↩

51. URL:https://www.industryintel.com/beauty-and-personal-care/news/estee-lauder-receives-the-2022-sandra-taub-humanitarian-award-from-the-breast-cancer-research-foundation-award-recognizes-elc-s-commitment-to-funding-lifesaving-research-and-raising-public-awareness-through-its-annual-breast-cancer-campaign-158064409056 Sample article from our Beauty & Personal Care November 14, 2022 (press release) – The Estée Lauder Companies (ELC) and its employees were honored by the Breast Cancer Research Foundation® (BCRF) during the annual Symposium and Awards Luncheon This October, ELC and its employees were the recipients of the Breast Cancer Research Foundation’s (BCRF) Sandra Taub Humanitarian Award, which was presented in New York City during BCRF’s annual Symposium and Awards Luncheon. The award recognizes ELC’s commitment to funding lifesaving research and raising public awareness through The Estée Lauder Companies’ Breast Cancer Campaign (The Campaign), which is honoring its milestone 30th anniversary this year. Each year, the Sandra Taub Humanitarian Award is given to a person or organization that exemplifies a true generosity of spirit, a passion for philanthropy, and a commitment to BCRFs mission. Named in 2010, the award honors the legacy of Sandra Taub, whose memory lives on through the stellar humanitarian example of her mother, Arlene Taub, and her entire family. Former recipients of the award include Tommy Hilfiger, Tory Burch, Vera Wang, Stella McCartney, and Katie Couric. ↩

52. URL:https://www.elcompanies.com/en/news-and-media/newsroom/company-features/2019/elc-brands-win-at-the-fragrance-foundation-awards Home News & Media Newsroom ELC Brands Win at The Fragrance Foundation Awards ELC Brands Win at The Fragrance Foundation Awards Company Feature , Jun 6, 2019 Tom Ford accepts his induction into the Fragrance Foundation’s Hall of Fame On June 5, 2019, The Estée Lauder Companies’ (ELC) brands were recognized at the prestigious Fragrance Foundation Awards at Lincoln Center in New York City hosted by Jane Krakowski, award-winning actress. The Fragrance Foundation Awards, held annually since 1973, celebrate the global fragrance industry and its outstanding creative achievements in the world of perfumery. John Demsey, Executive Group President, and Jane Hertzmark Hudis, Group President Notably, Mr. Tom Ford was inducted to The Fragrance Foundation’s Hall of Fame, a prestigious recognition for the designer. TOM FORD BEAUTY, an ELC brand, began with Ford’s first fragrance, Black Orchid, which launched in 2006. Since then, the line has grown to include many more fragrances, as well as a color collection. ↩

53. (Earning Call Transcript 2018 q4) We expanded our benefits around adoption, child and elder care, an awarded a special bonus to employees who dont receive equity-based compensation to recognize their terrific contribution. As we realign the company focus to strengthen our position in the areas that will lead future growth, we hired and developed talented employees with the skills needed in these new areas. We also began offering learning and training opportunity online through our LinkedIn Learning helping our employees build competencies in a variety of areas. We are proud that our commitment to our employees is being recognized. Our company was named the top rated workplace by the job site Indeed and recognized by Forbes as one of America\u2019s best employees for women. ↩

54. (Earning Call Transcript 2022 q2) Since we spoke with you in November, we are pleased to have received several external recognitions of our ESG efforts. We were named to Forbes inaugural list identifying the worlds top female-friendly companies, leading the way to support women inside and outside the workforces. And for the fifth year in a row, we were named to Bloomberg Gender Equality Index. We were included in the CDPs Climate A List for the second consecutive year, which is a tribute to our deep commitment to climate action and to the highest level of transparency around our environmental interest. Last, MSCI recognized our progress toward our 2025 ESG goal in its recent upgrade of the Company to an A rating. ↩

55. URL: https://www.gcimagazine.com/brands-products/news/news/22392857/este-lauder-announces-q4-2022-results Estée Lauder Announces Q4, Full-Year 2022 Results\nAug 18th, 2022\nJacquelyn Mueller, associate editor, Global Cosmetic Industry\nEstée Lauder also announced its fourth quarter 2022 results that reported net sales of $3.56 billion, a 10% decrease from $3.94 billion in the previous year.\nEstée Lauder has announced its full year 2022 results that reported\xa0net sales of\xa0$17.74 billion,\xa0an increase of 9% from\xa0$16.22 billion\xa0in the previous year.\nThe company reported net earnings of\xa0$2.39 billion, compared to\xa0$2.87 billion in the previous year.\nTotal reported operating income was\xa0$3.17 billion, an increase from\xa0$2.62 billion\xa0in the previous year.\nFourth Quarter 2022\nEstée Lauder also announced its fourth quarter 2022 net sales of $3.56 billion, a 10% decrease from $3.94 billion in the previous year. ↩ ↩² ↩³ ↩⁴

56. URL: https://www.gcimagazine.com/brands-products/news/news/22392857/este-lauder-announces-q4-2022-results The company also sounded a cautionary note: "The company enters the fiscal year during a volatile period of record inflation, supply chain disruptions, strengthening U.S. dollar, risk of a slowdown in many markets globally, and with a strong headwind from the August 2022 COVID-19 restrictions in Hainan."Fabrizio Freda, president and CEO said, “We delivered excellent results in fiscal 2022, exceeding our expectations in the fourth quarter and achieving record revenue and profitability on an adjusted basis for the year. Our multiple engines of growth strategy proved invaluable amid pandemic and macro complexity, affording us the diversification to seize growth of the moment. The Americas and EMEA prospered, fragrance soared, and makeup realized the promise of its emerging renaissance. "La Mer, M·A·C and Jo Malone London led the contribution of double-digit organic sales growth by nine brands, impressive on its own and especially so given the significant pressure from COVID-19 in Asia/Pacific at the end of the year. ↩

57. URL: https://www.businesswire.com/news/home/20230202005036/en/The-Est%C3%A9e-Lauder-Companies-Reports-Fiscal-2023-Second-Quarter-Results This reflects lower earnings before taxes, excluding non-cash items, and the negative impact from changes in working capital, primarily accounts payable, due to the timing of payments.\nCapital Expenditures decreased to $419 million compared to $459 million last year, primarily reflecting timing of investments.\nThe Company ended the quarter with $3.73 billion in cash and cash equivalents after returning $0.71 billion cash to stockholders through dividends and share repurchases.\nIn November 2022, the Company announced it signed an agreement to acquire the TOM FORD brand. The transaction is expected to be completed in the fiscal 2023 fourth quarter and to be funded through a combination of cash, debt and deferred payments to the sellers.\n ↩

58. (Earning Call Transcript 2023 q2) The decline from last year reflects lower net income and the negative impact from changes in working capital, primarily due to the timing of payments. We invested $419 million in capital expenditures, and we returned $708 million in cash to stockholders through both dividends and share repurchases. As we expected, our first half performance was pressured by ongoing external headwinds. Let me now turn to our outlook for the remainder of fiscal 2023. For the second half of fiscal 2023, we are encouraged by the easing of COVID restrictions in China and the expected return of travelers throughout Asia and around the world once more stabilization occurs with outbound flights and visas as well as cover entry and testing requirements. ↩

59. URL: https://www.businesswire.com/news/home/20230202005036/en/The-Est%C3%A9e-Lauder-Companies-Reports-Fiscal-2023-Second-Quarter-Results 'Outlook for Fiscal 2023 Third Quarter and Full Year The Company expects the remainder of the fiscal year to be volatile, including risks associated with the uncertain pace of recovery of consumers in travel retail, and pressured by the ongoing disruptions due to the evolving COVID-19 environment, inflation, supply chain disruptions, and the risk of a slowdown in certain markets globally.\nThe Company remains optimistic about the prospects and future growth in global prestige beauty and plans to invest in its business during this difficult environment to support share gains and long-term growth, including investments in advertising, innovation, its innovation center in Shanghai and its manufacturing facility in Japan. In the near-term, these investments will have a greater impact to diluted net earnings per common share due to the expected decline in net sales. With multiple engines of growth across regions, brands, product categories and channels, the Company is well-positioned to drive diversified long-term growth across its portfolio.\nThe second half outlook reflects the following assumptions and expectations:\nA shift in the return to growth in Asia Travel Retail and mainland China from the fiscal 2023 third quarter to the fourth quarter, reflecting:\nThe normalization of inventory levels in Hainan, given the disruptions from the COVID-related impacts in November and December. ↩

60. URL:https://industrywired.com/estee-lauder-is-digitally-transforming-planning-and-decision-making-with-o9/ Like 0 Facebook 0 Twitter 0 Email 0 The Estée Lauder Companies, one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance, and hair care products, is working with O9 solutions on a multi-year journey The aim to transform its Global Supply Chain Demand and Supply Planning capabilities using o9 Solutions’ next-generation, AI-enabled platform. o9 Solutions Inc., , a premier AI-powered IBP platform provider, announced a multi-year engagement with The Estée Lauder Companies to transform the company’s Global Demand Planning and Supply Planning processes. The Estée Lauder Companies is leveraging o9’s platform’s capability to review how certain drivers, such as new product launches, promotions, influencer marketing, gift sets, and others are impacting baseline statistical forecasts. The platform enables the company to quickly analyze multiple scenarios of events and drivers and then evaluate forecast changes and related valuation impacts to the business. From a supply perspective, the o9 platform generates production plans based on constraints across all product categories. ↩

61. URL:https://o9solutions.com/news/estee-lauder-transformed-planning-and-decision-making-with-o9/ Estée Lauder is digitally transforming planning and decision making with o9 By o9 SolutionsMarch 9, 2021April 14th, 2023 No Comments Estée Lauder is digitally transforming planning and decision making with o9 o9 is working with The Estée Lauder Companies, one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products, on a multi-year journey to transform its Global Supply Chain Demand and Supply Planning capabilities using o9 Solutions’ next-generation, AI-enabled platform. DALLAS, 9th of March 2021 – o9 Solutions announced a multi-year engagement with The Estée Lauder Companies to transform the company’s Global Demand Planning and Supply Planning processes. The Estée Lauder Companies is leveraging o9’s platform’s capability to review how certain drivers, such as new product launches, promotions, influencer marketing, gift sets, and others are impacting baseline statistical forecasts. The platform enables the company to quickly analyze multiple scenarios of events and drivers and then evaluate forecast changes and related valuation impacts to the business. From a supply perspective, the o9 platform generates production plans based on constraints across all product categories. ↩

62. URL:https://www.businesswire.com/news/home/20210309005676/en/o9-Solutions-Working-with-The-Est%C3%A9e-Lauder-Companies-to-Transform-Planning-Capabilities o9 Solutions Working with The Estée Lauder Companies to Transform Planning Capabilities March 09, 2021 10:00 AM Eastern Standard Time DALLAS--( BUSINESS WIRE )--o9 Solutions announced a multi-year engagement with The Estée Lauder Companies to transform the company’s Global Demand Planning and Supply Planning processes. The Estée Lauder Companies is leveraging o9’s platform’s capability to review how certain drivers, such as new product launches, promotions, influencer marketing, gift sets, and others are impacting baseline statistical forecasts. The platform enables the company to quickly analyze multiple scenarios of events and drivers and then evaluate forecast changes and related valuation impacts to the business. From a supply perspective, the o9 platform generates production plans based on constraints across all product categories. With its large portfolio of brands and a dynamic demand picture, the platform allows The Estée Lauder Companies to make the best allocation of the constrained resources to the prioritized demands. ↩

63. URL:https://o9solutions.com/news/estee-lauder-transformed-planning-and-decision-making-with-o9/ With its large portfolio of brands and a dynamic demand picture, the platform allows The Estée Lauder Companies to make the best allocation of the constrained resources to the prioritized demands. “The o9 platform has modernized our planning process by taking our master data of today, applying our new business-defined prioritization logic, and concurrently solving known constraints to generate our most feasible supply plan,” said Naresh Rajanna, Vice President, Global Supply Chain, The Estée Lauder Companies. “This clarity and real-time analysis empowers the planning team to make quick and informed decisions allowing us to be agile and strategic in our ever-changing landscape.” The o9 platform has modernized our planning process by taking our master data of today, applying our new business-defined prioritization logic, and concurrently solving known constraints to generate our most feasible supply plan. “We are thrilled to work closely with The Estée Lauder Companies to provide an integrated platform and global solution for demand and supply planning,” said Igor Rikalo, President and Chief Operating Officer, o9 Solutions, Inc. “Together with the very strong Planning teams at The Estée Lauder Companies, we were able to implement planning cycle processes with a high degree of maturity enabling orchestration, synchronization, and what-if scenario planning at the company’s scale.” Together with the very strong Planning teams at The Estée Lauder Companies, we were able to implement planning cycle processes with a high degree of maturity enabling orchestration, synchronization, and what-if scenario planning at the company’s scale. About o9 Solutions o9 offers a leading AI-powered Planning, Analytics & Data platform called the Digital Brain that helps companies across industry verticals transform traditionally slow and siloed planning into smart, integrated and intelligent planning and decision making across the core supply chain, commercial and P&L functions. ↩

64. URL:https://www.appsruntheworld.com/customers-database/purchases/view/the-estee-lauder-companies-new-zealand-selects-microsoft-azure-cloud-services-for-application-hosting-and-computing-services Close The Estee Lauder Companies selects Microsoft Azure Cloud Services for Application Hosting and Computing Services In 2021, The Estee Lauder Companies , a United States based Consumer Packaged Goods organization with 44640 employees and revenues of $16.20B selected Microsoft Azure Cloud Services for Application Hosting and Computing Services while displacing Legacy Applications , and integrating with the existing systems being used. Customer 2021 2021 Discover the latest software purchases and digital transformation initiatives being undertaken by The Estee Lauder Companies and its business and technology executives by accessing the entire The Estee Lauder Companies and its business and technology executives by becoming a Premium Subscriber . On a continuous basis, our research team identifies and updates the on-prem and cloud applications that are being used by The Estee Lauder Companies employees from publicly available data (Press Releases, Customer References, Case Studies, Success Stories, Testimonials, RFP, RFI, etc.) as well as proprietary sources, and incorporate them into the customer profile. ↩