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Estée Lauder Cos. is open to acquisitions as the owner of the Jo Malone and Le Labo brands enters the second year of a turnaround plan under Chief Executive Officer Stéphane de La Faverie.
“We are looking at the portfolio, and we will always be part of the M&A discussion,” De La Faverie told Bloomberg TV on Monday. The focus is on accelerating growth and rebuilding profitability, he said, and that includes incubating and scaling new brands.
De La Faverie took over with Estée Lauder under pressure to bolster falling market share in the US and sluggish sales in China. Estée Lauder’s stock has surged more than 50 percent over the past 12 months, though it took a hit this month when the company’s outlook fell short of investors’ expectations.
On Monday, de La Faverie said Estée Lauder is off to a “very strong start” this year in China, especially in fragrance, while brands like The Ordinary are selling well in the US.
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Estée Lauder is also expected to divest underperforming brands, with analysts naming beauty companies like Too Faced and Smashbox, as well as skincare brands like Origins and Darphin, as potential options.
It’s too early to say how the US Supreme Court striking down President Donald Trump’s tariffs on Friday will impact the company, he said. Estée Lauder has previously said it expects a $100 million hit to profitability from tariffs, which will show up mainly in the next six months.
Estée Lauder’s diversified manufacturing helps alleviate the impact, the CEO said. “You cannot control geopolitics,” he said. “What I can control is how do we run our business, how do we react to anything that is happening out there.”
By Jillian Deutsch
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Estée Lauder Is Having Some Trouble at Home
International sales at brands like La Mer and Le Labo are improving, but the cosmetics conglomerate is still struggling to connect with US consumers.
