Yet another turnaround at the top of a luxury giant. Estée Lauder he has in fact announced that his CEO Fabrizio Freda will retire at the end of the 2025 fiscal year. The announcement came shortly before the presentation of the accounts for the fourth quarter of the financial year ended June 30.
Freda to retire in 2025, Estée Lauder announces
“The board of directors is well advanced in its consolidated process CEO succession planning, under which the board considered many highly qualified internal and external candidates,” the company said in a statement. Estée Lauder said Freda will continue to lead the company's strategic, financial and investment priorities until a successor is appointed. At that point the manager “will work with this leader to ensure a smooth transition” and will also be available in fiscal 2026 as a consultant.
“Fabrizio has been an incredible partner to me and other members of the Lauder family,” he said William Lauder, executive chairman – He understands the uniqueness of this family business and has used our long-term focus and principle of patient capital as a strength as he transformed the company to meet evolving consumer aspirations.”
Freda joined the company in March 2008 as president and COO and assumed the role of CEO in July 2009.
In this context it should be remembered that only a month ago, Estée Lauder announced the nomination of Akhil Shrivastava, senior vice-president, to executive vice-president and chief financial officer effective November 1, 2024, replacing Tracy Travis, who resigned her position on June 30 after twelve years of service. The company is therefore facing a profound renewal as it continues its Profit Recovery and Growth Plan aimed at rekindling profitability and growth after a period of strong difficulty.
Estée Lauder sales increase in the fourth quarter
In the fourth quarter of 2024, sales of the US beauty giant increased by 7% to 3,87 billion dollars despite, it is explained, "a slowdown in key areas of the company's business, mainly mainland China, Asia travel retail and North America”. Organic sales grew 8%, driven by growth across all product categories, led by Skin Care, which was driven by the company's global travel retail business. This represented an acceleration from 6% growth in fiscal 2024's third quarter.
La net loss in the fourth quarter increased to $284 million, or $0,79 per diluted share, from a loss of $33 million, or $0,09 per diluted share a year earlier. THE'adjusted diluted earnings per share rose to $0,64 from $0,07.
“In fourth quarter fiscal 2024, we achieved our organic sales outlook and exceeded profitability expectations, closing out a challenging year. Organic sales and adjusted EPS returned to growth in the second half,” commented CEO Fabrizio Freda.
Outlook 2025 lower than expected
Estée Lauder also provided financial guidance for the first quarter of fiscal year 2025 and for the entire financial year. In the first quarter, it is expected that sales will drop by 3-5%. For the full year, sales are expected to range between a 1% decline and a 2% increase.
“For fiscal 2025, we expect continuous declines in the prestige beauty segment in China, primarily reflecting persistent weak sentiment among Chinese consumers,” Freda added, further explaining that “for fiscal 2025, the Profit Recovery and Growth Plan allows us to offset pressure on profitability driven by continued weakness in the segment of prestige beauty in China, producing a more moderate pace of operating margin expansion than previously expected,” he stressed. “While our sales and profit outlook for fiscal 2025 is disappointing, this year we will take steps forward. giant, as we implement our strategic reset to continue to rebalance regional growth, deliver improved annual profitability, and strengthen go-to-market and innovation capabilities to elevate our execution in response to a more competitive market.”
Stocks down on Wall Street
After the announcement of Freda's retirement and the disclosure of the fourth quarter accounts on Wall Street the Estée Lauder title it is down 1,8%. Since the beginning of the year, the company's shares have lost over 35% of their value, while in the last 12 months the decline has been close to 40%, with the group achieving the third worst performance in the fashion segment.
