Estee Lauder 2015 Annual Report Download - page 13

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10
MAINTAINING CONSISTENCY IN
A DYNAMIC GLOBAL ENVIRONMENT
In fiscal 2015, we sustained our momentum by proactively managing our approach to successfully
anticipate and navigate through global uncertainties, including significant movement in key
currencies and slower consumer spending in China.
We have been able to nimbly and quickly shift our resources to the brands, regions and channels
that are demonstrating the best opportunities and strongest momentum. This agility helped us to
grow net sales at a pace higher than global prestige beauty. With one-third of our brands, markets
and channels growing at double-digit rates, the rest simply needed to grow overall in line with the
industry for us to outperform.
During the year, we benefitted from, and increased our investment in, several high potential areas of
our business. These included our fast-growing online and mobile offerings, which are a critical part
of our broader channel strategy. Our Online metrics are truly impressive: nearly all of our brands
experienced strong double-digit growth in this channel, with the largest contributions from M·A·C,
Estée Lauder and Clinique. We also continued to see strong double-digit growth Online across all
regions, including our most developed countries, the United States and the United Kingdom.
Additionally, we continued to expand strategically in emerging markets. For example, we capitalized
on the global popularity of M·A·C, using freestanding M·A·C stores as an entry point into countries
with less developed prestige retail. This strategy delivered excellent results, contributing to a 71 percent
increase in M·A·C’s business at retail in Brazil in fiscal 2015, despite the economic downturn in that region.
OUR COMPASS
Our areas of focus and deployment of capital for sustainable growth are based on a rigorous strategic
process that is informed by our Compass. The Compass provides a vital source of consumer and
market trends and helps identify the fastest-growing areas in prestige beauty that will provide the
greatest opportunities.
Through the development of our Compass, we saw early on the mega trends that led to our
investments in direct-to-consumer and specialty-multi retail capabilities. It has also helped us spot
key product trends, such as growing consumer interest in subcategories like facial masks. This
resulted in the successful introductions of a range of masks at Origins and the expansion of this
subcategory at La Mer, where we doubled the size of our mask business during fiscal 2015. Our
recent acquisition of GLAMGLOW, the popular Hollywood skin care brand focused on fast-acting
skin care masks, gives us the opportunity to lead in this growing subcategory. In addition, artisanal
and luxury fragrances with a focus on craftsmanship and quality are anticipated to grow faster than
the rest of the fragrance category, and we are well-positioned to lead this trend through our other
recent acquisitions.
The Compass also helps us decide where to allocate capital by category, market and brand. For
example, we made the strategic decisions to move into China, now over 6 percent of our total sales,
and accelerate M·A·C and Jo Malone London in markets such as Latin America and Asia based on
findings included in our Compass. These decisions are generating strong and profitable growth.
THE EST{E LAUDER COMPANIES INC.