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Tracey Travis on How Estée Lauder Weathered the COVID-19 Pandemic and Posted Sales Gains

Lauder’s executive vice president and chief financial officer Tracey Travis highlighted the key aspects of Lauder’s strategy.

The Estée Lauder Cos. has done a lot of pivoting over the past 18 months. 

The business has long touted its “multiple engines of growth” strategy — but it really put those engines to the test during the COVID-19 pandemic, which saw stores close and consumer shopping habits shift dramatically. 

Tracey Travis, Lauder’s executive vice president and chief financial officer, walked the audience at WWD’s Beauty CEO Summit through the company’s strategies during a fireside chat with Jenny B. Fine, executive editor of beauty at WWD. While there were moments where the company’s sales suffered, ultimately, Lauder rebounded to post a 23 percent increase in net sales for the most recent quarter, to nearly $4.4 billion, with growth across categories — including makeup.  

Travis, who acts as CFO and leads or co-leads several other areas of the organization, including IT, M&A, strategy and ESG, called leading the organization through the pandemic “challenging but rewarding.” 

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“It really tests everything about a business. It tests your strategy, tests your values, your financial flexibility, your operational agility and your people,” Travis said. “It has required … all of the things you would normally expect of a leader, but required those things on steroids. So, empathy, decisiveness, agility and really a bias to action and identifying the areas that were important for not only recovery, but long-term growth.” 

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At the same time as Travis and the Lauder team worked out how to ensure long-term growth, they also honed their ESG initiatives, focusing more on leadership training programs, particularly for women. Lauder plans to reach pay equity for women by 2023, and is committed to having a “completely diverse board” — a 50-50 split — by 2023, Travis said. The business has also partnered with poet laureate Amanda Gorman with plans to contribute $3 million to an initiative promoting literacy for women.

When the pandemic first hit in 2020, Lauder quickly focused on how it could recover from the brick-and-mortar shutdowns. It landed online, where the goal became “try to recapture as much of the business as possible,” Travis said. 

Beyond the initial shutdown period, Lauder also refocused the business on the fastest areas of growth, Travis said. “For us, [that was] the Asia Pacific market, the skin care category, the fragrance category,” she said. “We were positioned well to accelerate in those areas once the pandemic hit.” 

Lauder was well positioned, she said, because the company has become more agile, and has honed the “multiple engines of growth” strategy: “multiple brands, multiple geographies, multiple categories and obviously, a diverse consumer set.” 

“We have been relentless during this pandemic, to make sure that we are following what’s happening in all of our markets. We have weekly meetings with all of our markets to understand how recovery is going and obviously, it’s been uneven,” Travis said. 

As vaccination rates increased in Western markets and schools prepared to open in the fall, Lauder prepared for makeup’s return, she said. “That was the moment that makeup, in particular foundation and lip, which were the two subcategories that were the most impacted in makeup, would start to recover. So we invested in the inventory. We created the marketing programs to make sure that we could re-engage consumers when that moment came in the fall. And we saw great, great results,” Travis said. 

Makeup sales were up 20 percent in the most recent quarter, to $1.17 billion, with growth from Estée Lauder and MAC. The category still lags behind 2019 makeup sale levels, but the figures improved from 2020. 

The fragrance category has been “the big surprise” during the pandemic, Travis said. “People [are] looking really at fragrances as self care, self pampering, everything from home and body to the actual juice products as well,” Travis said. 

Some of Lauder’s acquisitions, especially Dr. Jart + and Deciem in skin care, have also helped propel the company’s growth. “We’re learning a lot from both of those brands. One of the differences in terms of how we executed those acquisitions relative to prior acquisitions is they were minority to majority acquisition,” Travis said.

“Those two brands contributed over a billion dollars worth of skin care business to the company,” Travis continued. “In a category that is strategically important to us, that is the fastest growing category that we’ve had over the last few years, those two acquisitions were certainly very important. Will we do more acquisitions? Absolutely,” Travis said. 

She noted that when Lauder looks at M&A, they look for white space opportunities within their own brand portfolio to ensure brands are differentiated from one another. Lauder will look at a brand as soon as it has demonstrated some success at retail or online, and Travis said the enterprise is looking at businesses at earlier stages than in years past.

That is why Lauder has set up New Incubation Ventures, a venture arm, to invest in small, entrepreneurial businesses. 

“It’s a small group internally really focused on finding those kernels of ideas that are really new and differentiated, providing some seed money to those entrepreneurs, and learning from them,” Travis said. Some of those brands may become acquisitions, she said, which the company looks at across categories.

“We would be interested in more brands as they would prove themselves out, as it relates to to Asia. And, obviously, the trends in terms of organic, clean, better-for-you products,” Travis said.

These days, the traditional categories and channels are being redefined, and it has caused a shift in Lauder’s business.

“When you think about luxury and the definition years ago, scarcity was a big part of what luxury was about, in addition to quality and experience and service,” Travis said.

But technology has changed that, and made accessibility an important part of the luxury equation, Travis said. Partnering with Sephora @ Kohl’s and Ulta Beauty with Target, has allowed Lauder to make its own brands more accessible.

“It does allow us to reach a broader consumer group, both in store as well as online. And and that’s important as well, as consumers are shifting their shopping patterns,” Travis said.

For more from, see: 

How Estée Lauder Is Seizing Future Growth Opportunities

Updated: All the Beauty M&A Deals of 2021

Lauder Names New Heads of North America, APAC