Estee Lauder has seen a 10% slump in their FY23 revenue — down to $15.9 billion USD.
👉 Background: Estee Lauder Companies (ELC) is the gigantic beauty company that owns major brands like Mac Cosmetics, Jo Malone, Clinique, La Mer. And, they also recently acquired Tom Ford.
👉 What happened: But now, ELC has seen a 10% slump in their FY23 revenue — down to $15.9 billion USD. The recovery of travel retail in Asia (ie airport stores) hasn't quite picked up as expected.
👉 What else: China accounts for more than 30 per cent of Estee Lauder's sales. And right now, China is actually facing deflation and very loooow consumer confidence.
💡While the Western World is grappling with inflated prices, China is dealing with the opposite problem. And this spells some pretty big red flags for companies like Estee Lauder — which relies so heavily on the Chinese economy.
💡While it would be nice to see supermarket prices deflate here in Australia, deflation is not necessarily a good thing.
These show that demand for investments and spending money is getting even weaker.
💡So Estee Lauder may be hoping that China's recent cut in a key lending rate will drive its consumer spending again. Otherwise, it may need to look for more avenues for growth.
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