Fabrizio Freda, President and CEO, The Estée Lauder Companies.
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Estee Lauder The global cosmetics company forecast its annual profit and sales would fall short of estimates as the global cosmetics market struggles with slowing demand, especially in China, and said Chief Executive Fabrizio Freda would retire after nearly 16 years at the helm.
Frida, 66, who will retire on June 30, 2025, was appointed CEO in 2009 and has been responsible for expanding the company's skincare portfolio with the addition of brands such as Dr. Jart and The Ordinary owner Deciem.
He also led the company through supply chain hurdles caused by the pandemic when Estee had to raise prices to offset rising costs and put in place a turnaround plan last year that included job cuts.
Shares of Este were mixed in early trading, falling 2%. The company has lost about 75% since hitting an all-time high of $374.20 in January 2022, as prolonged inflation and weakness in China have dampened demand.
Frida's retirement plans come just one month after CFO Tracy Travis announced she would be stepping down after a 12-year tenure.
Este said Monday that the board was considering internal and external candidates as part of its CEO succession planning.
“It’s no surprise that Fabrizio is stepping down,” said Dana Telsey of Telsey Consulting Group. “It was a long-awaited change, given the results over the past few years and the need for a refresh.”
Estee expects its sales in fiscal 2025 to fall 1% or rise 2%. That compares with analysts’ estimates of a 6.4% rise, according to data from the London Stock Exchange Group.
La Mer expects adjusted annual earnings per share of $2.75 to $2.95, compared with analysts' expectations of $3.96.
Demand for even “affordable luxuries” like lipstick and perfume, widely considered recession-proof, is taking a hit, with Estee predicting a continued decline in the luxury cosmetics sector in China and its European counterparts. L'Oreal Highlighting the lack of recovery in the region.
