Estee Lauder Cos Inc

Estée Lauder is force to be reckoned with in the beauty and cosmetic industry. The company has grown over time and now owns several brands and companies.

International brands such as Estée Lauder (EL), L’Oréal (LRLCY), Procter & Gamble (PG), Shiseido (SSDOY), and Nivea (BDRFF) dominate the cosmetics market in China.

Estée Lauder aims to partner with key brick-and-mortar retailers to strengthen their prestige beauty shopping e-commerce websites to better meet consumer online shopping preferences.

Despite currency headwinds, Estée Lauder’s (EL) worldwide gross profit margin increased to 80.3% in fiscal 2014 from 80.1% in fiscal 2013.

Coty Inc.’s capital expenditure decreased 15.2% to $0.17 billion in fiscal 2015, compared to $0.20 billion in fiscal 2014.

With increasing competition from L’Oréal, Shiseido, and Coty, Estée Lauder continues to expand its position in Western Europe and emerging markets.

Estée Lauder’s sales growth was ranked third-highest globally among leading cosmetic companies between the years 2012 to 2015, with net revenue of $11 billion in fiscal year 2014.

Estée Lauder aims to expand its geographical market share in China, the Middle East, Eastern Europe, Brazil, and South Africa by focusing on consumers who purchase in travel retail channels.

Recently, CNBC reported that Piper Jaffray had downgraded Estée Lauder stock to “neutral” from “overweight.” EL has corrected about 7% so far in October.

Ulta Beauty (ULTA) stock fell about 22% after its lower-than-expected second-quarter results on Thursday. Ulta Beauty posted net sales of $1.67 billion.

The Consumer Staples Select Sector SPDR ETF (XLP) rose 10.5% in the first quarter of 2019.

While Estée Lauder’s (EL) gross margin narrowed significantly in the second quarter of fiscal 2019 (ended December 31), its expense management initiatives improved its operating margin.

BXP leased properties with a total area of 926,000 square feet in 2Q17.

Greif (GEF) fell 0.69% to close at $53 per share during the third week of December 2016.

Snyder’s-Lance (LNCE) has a market cap of $3.4 billion. It fell 0.12% to close at $34.64 per share on November 4, 2016.

Coach (COH) fell 4.2% to close at $35.04 per share during the second week of September 2016.

Avon Products (AVP) has a market cap of $2.1 billion. It rose by 14.4% to close at $4.76 per share on August 2, 2016.

Estée Lauder’s makeup segment’s net revenue rose 7.3% in reported terms and 11% in constant currency terms to $1.2 billion in fiscal 3Q16.

Since December 2015, FX (foreign exchange) headwinds have increased $0.3 billion after tax. That includes devaluations in Argentina, Russia, and Mexico.

Estée Lauder’s (EL) haircare segment’s revenue increased 8.7% in reported terms and 14% on a constant-currency basis to $0.15 billion in fiscal 2Q16.

P&G alleges that Dollar Shave Club is violating Gillette’s intellectual property by selling its razors.

Coty operates in over 130 countries through key distribution channels in both the prestige and mass markets channels.

Coty plans to expand with a multipronged strategy that includes digital marketing efforts through websites, brand sites, social networking campaigns and blogs, and e-commerce.

Coty sells its products through a multichannel distribution strategy across several price points in prestige and mass market channels of distribution.

Coty’s biggest licensed brand in the global mass skin and beauty care segment, Adidas maintains a significant presence in deodorants. It faces stiff global competition from Unilever’s Axe deodorants.

P&G’s Gillette, Fusion, and Venus are its largest male and female grooming brands. It has continued to grow with ProGlide and FlexBall in the US.

Estée Lauder’s management aims to generate at least 1% of its total sales growth through acquisitions over the next three years.

In addition to social media initiatives, Clinique’s “Forecast” mobile application provides weather information and skincare tips related to weather conditions.

Estée Lauder’s large geographical footprint diversifies its revenue stream, which is one of its chief strengths.

The abundance of counterfeit goods and accessories is adversely affecting the sales of Estée Lauder’s products. This also hurts EL’s brand image.

Estée Lauder’s Aveda brand manufactures innovative plant-based hair care products. This helps to attract customers and adds to Estée Lauder’s brand value.

Highly competitive in the beauty and cosmetics market, Estée Lauder’s revenue reached $11 billion in fiscal year 2014. However, the cosmetics company faces stiff competition from L’Oréal, Coty, and Avon (AVP).

Catering to the premium market, Estee Lauder’s heritage brands include Aramis and Designer Fragrances, Clinique, and Origins.

Colgate’s stock price has always been fairly stable primarily due to its oral care business.

Procter & Gamble continues to look at large developing markets where it thinks it can win enough market share to take a leadership position.

Less capex has been required since P&G reduced the number of brands as well as the research and development, marketing, and innovation costs associated with them.

Procter & Gamble’s Beauty segment includes products such as deodorants, cosmetics, personal cleansing, skin care, and hair care.

In the six months ending December 31, 2014, P&G’s net sales stood at $40.3 billion. Of this, 9.6% came from the Grooming segment.

In 2001, P&G established an innovation strategy program called “Connect and Develop.” The program has allowed the company to better understand consumer behaviour.

In examining Porter’s five forces at work at P&G, we find that three competitive forces are horizontal in nature and two are vertical.