Estee Lauder Chairman and CEO Fabrizio Freda will retire, marking the end of an impactful era for the cosmetics giant.
Estee Lauder forecast its annual sales and profits will fall short of expectations as the global beauty industry faces declining demand, particularly in China. The announcement comes amid news that CEO Fabrizio Freda, who has led the company since 2009, will step down on June 30, 2025, ending nearly 16 years of leadership.
During her tenure, Freda, 66, has significantly expanded Estee Lauder’s skin care line, incorporating popular brands like Dr. Jart and Deciem, which owns The Ordinary. She has also guided the company through significant challenges, including supply chain disruptions during the pandemic that required price increases and a restructuring initiative that led to layoffs last year.
The company’s stock price has seen a sharp decline, falling 3.6% to $91.56 in pre-market trading and plunging nearly 75% from its peak of $374.20 in January 2022. The decline reflects the ongoing impact of sustained inflation and persistent market weakness in China.
This leadership transition comes on the heels of Chief Financial Officer Tracey Travis stepping down after a 12-year tenure. Estee Lauder’s board of directors is currently reviewing both internal and external candidates to find Freda’s successor.
For fiscal 2025, Estee Lauder expects sales to decline by up to 1% or increase modestly by 2%, in sharp contrast to analysts’ expectations of 6.4% growth based on LSEG data. The company also expects adjusted earnings per share to be between $2.75 and $2.95, significantly lower than analysts’ expectations of $3.96.
The outlook is grim for the luxury goods sector, including traditionally “recession-proof” items like lipstick and perfume. Estee Lauder expects continued declines in China’s premium beauty market.
This mirrors the experiences of European competitors such as L’Oreal, which also reported slower-than-expected growth in the global beauty market, highlighting the continued lack of recovery in the Chinese sector.
