ESTEE LAUDER COMPANIES INC (EL)

The Estée Lauder Companies Inc., founded in 1946 and controlled since inception by the Lauder family (approximately 84% of voting power as of August 2022), is a leading global manufacturer, marketer and seller of prestige skin care, makeup, fragrance and hair care products sold in approximately 150 countries and territories. The company operates a broad portfolio of well-known brands including Estée Lauder, Clinique, Origins, M·A·C, Bobbi Brown, La Mer, Aveda, Jo Malone London, Too Faced, Dr.Jart+, and The Ordinary, and serves as global licensee for brands such as Tom Ford and AERIN, with brands categorized into heritage, makeup artist, luxury, and designer fragrance groupings. Products are distributed through a selective, complementary network designed to preserve brand prestige, including owned and authorized retailer websites, third-party online malls, airport and duty-free locations, freestanding stores (approximately 1,600 as of June 30, 2022), department stores, specialty-multi retailers, pharmacies, and salons/spas, with wholly-owned operations in over 50 countries; the largest customer, focused on China travel retail, represented 13% of fiscal 2022 net sales.

The company's strategy centers on its "High-Touch" consumer engagement philosophy, hero products, omnichannel expansion, and increasing investment in digital, e-commerce, and Virtual Selling capabilities, particularly accelerated by COVID-19-driven shifts in consumer behavior. Estée Lauder maintains significant research and development operations (approximately 1,250 employees, $307 million spent in fiscal 2022), with growing focus on Asia/Pacific innovation including a new Shanghai innovation center. Manufacturing occurs primarily in company-owned facilities in the U.S., Belgium, Switzerland, the U.K., and Canada, supplemented by third-party networks, including a new manufacturing facility near Tokyo and a new distribution center in Switzerland.

The company faces significant competition from large multinational players such as L'Oréal, Unilever, Procter & Gamble, Shiseido, LVMH, Chanel, and others, as well as independent and retailer-owned brands. Recent portfolio changes include increasing its stake in DECIEM to approximately 76%, exiting the BECCA brand, and discontinuing several designer fragrance licenses (Donna Karan, DKNY, Michael Kors, Tommy Hilfiger, Ermenegildo Zegna) effective June 2022. The company owns extensive trademark portfolios and holds various patents and copyrights, though none are individually material to its business.

As of June 30, 2022, Estée Lauder employed approximately 63,000 people worldwide (about 80% female, 57% female at VP level and above), with human capital priorities centered on inclusion, diversity and equity, talent development, health and safety, competitive rewards, and community engagement, alongside broader corporate sustainability initiatives spanning climate, packaging, responsible sourcing, and ingredient transparency overseen by its Board's Nominating and ESG Committee.