Estee Lauder 2005 Annual Report Download - page 9

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08
Dear Fellow Stockholder:
As you read this report, I will have completed my first year as your Chief Executive Officer. It is a privilege to lead The Estée
Lauder Companies, founded by Estée and Joseph Lauder in 1946. We have had an enviable track record of uninterrupted
growth for 59 years.We now have a total of 26 prestigious brands, several of which are sold in more than 130 countries and
territories. In the coming fiscal year,we will celebrate 60 years in business and 10 years as a public company.
I am pleased with our financial performance, but rather than review the past, I want to focus on our future and articulate our
plan for extending our Company’s leadership position over the next 60 years with the goal of
delivering even greater results.
Our commitment to you, our stockholders, is to seek and pursue our very brightest future
with persistence, passion and excellence through our development of outstanding brands,
highly motivated people and financial excellence.
PERSISTENCE IN BUILDING PRESTIGIOUS BEAUTY BRANDS
In fiscal 2005, approximately 70% of our net sales came from brands we created ourselves,
including Estée Lauder, Aramis, Clinique, Prescriptives and Origins. In current conditions, the economics of brand building
are very attractive. Moreover, brand building unleashes the power of our highly imaginative creative teams. We also
succeeded in building acquired brands such as Aveda, Bobbi Brown and M.A.C. In the future,we will continue to rely on our
prowess as brand builders.
Our brands are one of our most important assets, and brand building is our core strength. Our future will be built with
superlative beauty brands. This year, we announced several wonderful new brands, opening new areas of growth.
• Our BeautyBank division launched four distinctive national brands into Kohl’s Department Stores. These brands:
American Beauty, Good Skin™, Flirt! and Grassroots, are quickly gaining favor with consumers. We are pleased with
our progress in this broad and dynamic shopping arena.
•
In April 2005, we signed a multi-year arrangement with world-renowned fashion designer Tom Ford. Initially, Mr. Ford will
collaborate with the Estée Lauder brand in the creation of a Tom Ford for Estée Lauder line to be sold at our Estée Lauder
counters. Then, Mr. Ford will launch a separate, stand-alone Tom Ford beauty line with products in Fall 2006.
CHIEF EXECUTIVE’S
REVIEW
WILLIAM P. LAUDER