In September, The Estée Lauder Companies made its first-ever investment in a Chinese beauty brand, Code Mint, through its New Incubator Ventures (NIV), acquiring a minority stake.

However, challenges in the Asia travel retail business and the slow recovery of prestige beauty in mainland China continue to impact the multinational. Its portfolio of brands include Estée Lauder, Aramis, Clinique, M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London and more.

 The company has revised its fiscal 2024 outlook due to these challenges, after  reporting a 10 per cent  decline in net sales to US$3.52 billion  ($5.5 billion) for the first quarter ending September 30, 2023, mainly due to an 11 per cent drop in organic net sales.

Skincare sales dropped by 21 per cent, while makeup sales increased by one per cent. Fragrance sales rose by five per cent, and hair care sales decreased by seven per cent.

The company plans to reset retailer inventory in Asia travel retail by the end of the third quarter of fiscal 2024.

Despite these challenges, the company remains optimistic about improving performance in the second half of fiscal 2024.

Fabrizio Freda, ELC President and Chief Executive Officer said: “While we had a better-than-expected first quarter, we are lowering our fiscal 2024 outlook given incremental external headwinds, namely from the slower growth in overall prestige beauty in Asia travel retail and in mainland China, which is currently confirmed in the pre-sale phase of the 11.11 Shopping Festival, and the risks of business disruption in Israel and other parts of the Middle East.”

They intend to strategically invest in consumer-facing activities, including innovation, advertising, and regional supply chain development in the Asia/Pacific region by completing a manufacturing facility in Japan.

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