Estee Lauder Companies Inc (NYSE:EL) Q2 2023 Earnings Call Transcript

So there are a lot of good potential levers of growth. That will be activated by the comeback of consumers. Then you are asking about the categories that will be a. First of all, skin care will be the biggest beneficial for the simple reason that skin care is the biggest percentage of beauty business in China. To be clear, that’s not the case in Europe or in U.S., where there are other categories which are a bigger percentage of the total business. So this is a unique profile of the Chinese consumer, where skin care will be the biggest benefit benefiting the biggest from the normalization of the consumption patterns and of the purchase partners of the consumer. Second, fragrance is on a roll in China. Fragrance was already growing before COVID, has been growing during the period where Chinese at lower COVID levels than the rest of the world.

And will continue to grow with a reopening because there is a clear passionate development of this category. In China, the fragrance category is developing bigger percentage at the high end where we are focused €“ so the high-end fragrance is actually a much bigger percentage of the total market than in the rest of the world, which is grains for the development of this category. Makeup would also makeup is the cutter which is most affected by carbon situation. So now it’s the most affected. By the way, it’s been the most affected everywhere in the world by the COVID situation, not only in China. And so the resurgence of makeup that we are seeing in this moment in U.S., in Europe and some of our brands, particularly Mac, is benefiting from this very well.

Will happen also in China when COVID will normalize. And last, we have launched a data in China for a reason that we have seen the clear signs of development of luxury haircare. Obviously, hair care is a category super well developed among the Chinese consumers, but it’s mainly developed in mass is the beginning of the journey of the development of a luxury hair care sustainable hair care part. And so that’s really also exciting and is in front of us for the future development.

A €“Tracey Travis : And in terms of fragrance continue to expand our fragrance portfolio. We’re certainly seeing a pickup and expecting a pickup in travel retail as it relates to fragrance, and fragrance is still a growing category in Asia. So certainly, during the recovery, we expect that fragrance trends will continue to grow, particularly in the markets that are reopening now.

Operator: That concludes today’s question-and-answer session. If you were unable to join for the entire call, a playback will be available at 1:00 p.m. Eastern Time today through February 16. To hear a recording of the call, please dial (877) 344-7529 and use passcode 6947935. That concludes today’s Estee Lauder conference call. I would like to like to thank you for your participation and wish you all a good day.