Estee Lauder 2015 Annual Report Download - page 17

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expanding base of “experts” and “style leaders” on subjects they are interested in, particularly when it
comes to beauty. As a result, they are continually experimenting and searching for new experiences,
while also seeking out authentic brand stories and pursuing “individualized” brands. Our ability to
meet their desires for new experiences and rapid innovation provides an important advantage in
establishing strong connections with the Millennial consumer.
In many ways, the Millennial generation—and their shopping habits and preferences—is changing
the expectations and behaviors of other generations. The very same dynamics that drive a Millennial’s
approach to the world—technology, interconnectedness, social engagement—are shaping how we
all think and live, so our Company is focused on delivering High-Touch experiences across all generations.
For example, to meet the needs of our important Ageless consumer, we are emphasizing her best-
loved products and brands, and innovating to meet her evolving needs with the same High-Touch
approach to service in the channels where she shops. By 2017, approximately half of the United
States population will be 50 years or older and will control 70 percent of the nation’s disposable
income. Globally, the spending power of the Ageless group will reach $15 trillion by 2020. Women
in this category, particularly in our heritage markets, are willing to indulge themselves, which opens a
number of opportunities for engagement across our brands. We are innovating to meet their needs
by developing products tailored perfectly for them.
OUTLOOK: BUILDING ON
OUR BEAUTIFUL MOMENTUM
Global prestige beauty is dynamic, highly competitive and undergoing significant changes. We
delivered strong results in fiscal 2015 and demonstrated that our strategy is working precisely because
we anticipated many of the opportunities stemming from this environment. We have proven that we
are able to successfully navigate global challenges and leverage our strengths in the fastest-growing
areas. And, importantly, we believe we still have a great deal of runway for future growth.
There is enormous untapped potential around the globe and across our diverse brand portfolio, and
we are using our Compass to identify the areas of greatest opportunity. We are deepening our presence
in emerging markets, where disposable income among women is increasing. In heritage markets, we
continue to revitalize and accelerate our growth, leveraging new tools to allocate our resources
more effectively. We are continuing to innovate and add to our portfolio of exceptional brands.
Combined, these efforts position The Estée Lauder Companies for long-term, sustainable growth
and increasing profitability. We are focused on continual improvement in the way we do business to
further increase efficiency and agility. In sum, we believe we are well-positioned to continue the
beautiful momentum we have created.
This is truly an exciting time to be a major player in global prestige beauty. The industry is forecast to
grow again by 4 to 5 percent over the next few years. Our goal remains to grow at least one
percentage point faster to deliver topline growth between 6 and 8 percent annually in constant
currency. In order to achieve this, we are actively investing in the fastest-growing areas of our
industry. We expect to leverage our sales growth through greater productivity and cost savings and
THE EST{E LAUDER COMPANIES INC.