A dividend increase of 40 percent and a 2-for-1 stock split was met by applause by shareholders of the Estée Lauder Cos. Inc. at Friday’s annual meeting.

This story first appeared in the November 14, 2011 issue of WWD. Subscribe Today.

That’s how William P. Lauder, executive chairman, opened the shareholders meeting, held at the Essex House, and it went uphill from there.

Fabrizio Freda, president and chief executive officer, spoke about the firm’s vision to be the global leader in prestige beauty while retaining the Lauder family’s core values centered on integrity and creativity, to name a few. He also noted how the strategic modernization initiatives of the past two years have been fueled in part by a quote from chairman emeritus Leonard A. Lauder: “If you cannot see the future, you cannot get there.”

Strategies put into motion, whether further expansion into emerging markets or a push to grow in the digital space, allowed Freda to boast that fiscal year 2011 represented the “best performance in the company’s history.”

Among the data points highlighted was a 31 percent gain in operating income to $1.1 billion, translating into a 35 percent jump in income to $743 million after restructuring costs, and a 13 percent increase in sales to $8.8 billion.

There are some challenges ahead, such as in the emerging market of China. During the question-and-answer session, Freda noted the regulatory challenges of obtaining approval for both new products and ingredients, although that’s not a problem now given the pipeline in place. Another issue down the road is keeping an eye on when the local competition becomes stronger than their presence today, and Freda said one way to counter that is to build Lauder’s presence to ensure sufficient critical mass for when that time comes.

Still, the future seems bright, given that the company expects to generate more than 60 percent of its sales outside of the U.S. in fiscal year 2012. The firm is also forecasting a cut in costs of between $675 million and $725 million through 2013. And sales driven by travel shoppers as a category are expected to rival the beauty volume in North America by 2020, according to Freda.

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