Estee Lauder's 4 divisions are expected to make $15.95 billion for full-year 2020
(1) Skin Care $7.31 billion (46%),
(2) Makeup $6.18 billion (39%),
(3) Fragrance $1.86 billion (11%), and
(4) Hair Care $0.60 billion (4%)
NOTE: Estee Lauder reported Q1 '20 earnings earlier this month.
Estee Lauder Business Model
What Need Does It Serve?
Catering to the beauty and personal care needs of consumers: Estee Lauder manufactures and markets premium makeup, skin care, fragrance, and hair care products in the personal and beauty care segment of the market.
Estee Lauder's major brands include Estee Lauder, Aramis, Clinique, M-A-C, Bobbi Brown, La Mer, and Aveda, along with fragrance and cosmetics sold under brands such as Donna Karan, Tommy Hilfiger, Michael Kors, and Sean John.
Has Four Primary Operating Segments-
1) Skin Care: includes products meant for daily care and anti-aging such as sunscreens, cleansers, and face washes.
2) Makeup: includes products such as lipsticks and lip glosses, eye mascaras and eye shadows, nail polishes and removers, and face foundations and powders.
3) Fragrance: includes fragrances in various forms, such as perfume sprays and colognes, lotions, powders, creams and soaps for both men and women.
4) Hair Care: includes hair color and styling products, shampoos, conditioners, and finishing sprays priced in the premium range of the market.
What are the alternatives?
Personal Care and Cosmetic Industry: Competitors include other beauty and personal care heavyweights like L'Oreal, Kylie Cosmetics, and Johnson & Johnson.
What is the basis of competition?
Customers broadly care about the following 5 things:
PriceProduct SafetyProduct EffectivenessBrand RecognitionNatural Ingredients (low chemical content)
Total Revenue has grown from $11.82 billion in 2017 to $14.86 billion in 2019, and we expect this growth to continue, driving total revenue to $17.14 billion in 2021
% Change in Total Revenue
(D) Hair Care to make up around 4% of total revenue, bringing in around $622 million
The hair care segment includes hair color and styling products, shampoos, conditioners, and finishing sprays priced in the premium range of the market. Hair care at Estee Lauder is essentially meant to complement the portfolio of premium beauty care products.Revenue from this segment has grown from $542 million in 2017 to $586 million in 2019, and we expect it to rise to around $622 million by 2021.
Hair Care Revenue
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