The Estée Lauder Cos. Inc. celebrated 20 years as a public company at its annual shareholders meeting on Thursday.
At the meeting, William Lauder, the company’s executive chairman, told shareholders that if they purchased one share of stock for $6.50 on the first day that Lauder traded, it would currently be worth $86.66.
When Lauder went public in 1995 the company had sales of $2.9 billion dollars and a portfolio of eight brands. In fiscal 2015, the firm’s sales reached adjusted net sales of $11 billion, up 6 percent in constant currency, and an assortment of more than 25 brands. Brands newer to the fold include GlamGlow, Rodin, Le Labo and Editions de Parfums Frederic Malle. Frederic Malle and Le Labo’s Fabrice Penot attended the meeting for the first time.
“We know how to build young brands into global forces,” said Lauder.
Shareholders in attendance mirrored management’s jovial mood, giving an enthusiastic round of applause for president and chief executive officer Fabrizio Freda, and an even more robust one for Leonard Lauder, chairman emeritus.
Freda pointed out that the retail landscape has changed considerably for Lauder in 20 years. It is no longer solely dependent on department stores. In fact, it now operates approximately 1,500 freestanding stores, and aims to add 250 more doors this year.
Asked by one shareholder how Lauder will continue to keep its momentum going, William Lauder said, “In our business, you are running up an escalator. If you stop for a moment you go backward.”
Freda added that the company’s “solid diversification” helps it to sustain growth momentum in the face of a volatile microenvironment. “We are focused on the long term,” he added.
Another shareholder asked if Lauder has considered spinning off any of its brands, to which William Lauder replied it has examined it, but the company’s specialization in prestige beauty “allows us to integrate companies and grow them.”
“As my father Leonard Lauder would say, ‘We’re not a family business. We are a family in business.”