Estée Lauder Announces President and CEO Fabrizio Freda, Retirement Amid Challenges in 2024

Estée Lauder Companies (ELC) reported a 2% decline in net sales, totaling $15.6 billion for the fiscal year ending June 30, 2024. This decrease reflects the ongoing struggles in the Chinese market for prestige beauty products, as well as other global challenges. Organic net sales, which exclude the impact of currency exchange rates, also dropped by 2%.

ELC also announced that its President and CEO, Fabrizio Freda, will retire in June 2025 after 16 years with the company. While a successor has not yet been named, Freda reflected on his tenure, expressing pride in the company’s achievements and the talented team he helped build. He emphasized that his focus would remain on executing ELC’s strategic reset and its profit recovery and growth plan as the company navigates current challenges.

The company acknowledged that fiscal 2024 was a “difficult and volatile year,” citing not only weakened demand in China but also declining travel retail sales across Asia, the costs associated with acquiring Tom Ford, and disruptions in regions such as Israel and the Middle East. ELC’s net earnings fell significantly to $390 million, down from $1.01 billion the previous year.

Despite the difficulties, Freda pointed to a rebound in the final quarter of fiscal 2024, with net sales rising by 7% year-over-year to $3.87 billion and organic net sales increasing by 8%. He highlighted that the company met its organic sales expectations and exceeded profitability projections for the quarter, marking a return to growth in the second half of the year.

The Asia Pacific region saw a 3% decline in net sales for the full year, primarily due to the underperformance in China. However, stronger sales in Hong Kong and Japan helped mitigate some of the losses. ELC’s main competitor, L’Oréal, faced similar issues, with North Asia sales falling by 3.1%, and the company noting ongoing challenges in the Chinese market.

ELC reported double-digit net sales growth in Latin America, led by emerging markets such as Mexico and Brazil. In North America, net sales were flat, impacted by a decline in the makeup category, although Clinique saw double-digit growth due to its launch on Amazon’s Premium Beauty store. Sales in EMEA grew modestly by low single digits.

By category, fragrance sales outperformed other segments, growing by 2%, driven by brands like Le Labo and Jo Malone London in Asia Pacific and the Americas. Skincare sales dropped by 3%, mainly due to weak demand in Mainland China for brands like Estée Lauder, Clinique, and Dr. Jart+. However, the second half of the year saw a double-digit increase in skincare sales, led by La Mer, Estée Lauder, and The Ordinary.

Makeup sales decreased by 1%, attributed to the decline in global travel retail and changes to Mac Cosmetics’ loyalty program. Haircare sales fell by 4%, following a 6% rise in 2023, with ELC citing challenges facing Aveda in North America, particularly in the salon and direct-to-consumer channels.

Looking ahead to fiscal 2025, ELC expects a “more tempered performance than the industry,” largely due to its exposure to China and the travel retail market in Asia. The company plans to persevere in China, aiming to gain market share despite the weak sentiment. Freda outlined the company’s priorities for the coming year, which include reigniting skincare growth, capitalizing on high-end fragrance opportunities, accelerating progress in key channels, launching innovative products, and enhancing marketing capabilities.

While ELC’s sales and profit outlook for fiscal 2025 is modest, Freda emphasized that the company is making crucial strides to rebalance regional growth, improve profitability, and strengthen its market execution. These efforts, combined with the strengths of ELC’s brands, product portfolio, and global teams, are expected to position the company for stronger performance in fiscal 2026 and beyond.

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