Estee Lauder 2002 Annual Report Download - page 11

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10
Dear Fellow Stockholders:
This was a year of unprecedented challenges — but challenges that our Company met with commitment and
determination. I am pleased to report that The Estée Lauder Companies maintained its heritage of over 50 years
of uninterrupted sales growth in fiscal 2002. It was a year that demonstrated our commitment to growth even in
difficult economies. It was also a year that proved once again that The Estée Lauder Companies is a company that
is built on a solid foundation. While the Company is not immune to difficult worldwide challenges, we are
well situated to deal with them. Once again, the diversity of our brands, geographies, categories and channels
of distribution, along with our unrelenting drive for innovation, helped us to meet worldwide challenges.
With 16 brands and a presence in more than 130 countries and territories, we benefit from a rich selection of
highly innovative products in a balanced mix of categories that help drive consumer loyalty and sales. Our vision
of ourselves as “long distance runners” as opposed to “sprinters” has proven to be a sound approach.
In fiscal 2002, many factors impeded our growth: the economic weakness in our major markets — the United
States and Japan; the strength of the U.S. dollar and its effect on currency translation; the slowdown in
U.S. department store and shopping mall traffic; the decline in international travel following the events of
September 11th that led to a significant drop in our travel retail business and inventory contraction by U.S.
retailers. This was an extraordinary convergence of events that we are factoring into our plans.
Once again, we grew our business in all regions of the world, with particular strength in Europe and some parts
of Asia. For the second year, Clinique maintained its position as the second largest makeup brand in prestige
distribution in Europe, and the Estée Lauder brand, which also had a strong year internationally, continued to
broaden its consumer base while remaining true to its heritage.
CHIEF EXECUTIVE’S REVIEW
FRED H. LANGHAMMER