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Estee Lauder (EL) Concludes Buyout of DECIEM, Boosts Portfolio
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The Estee Lauder Companies Inc. (EL - Free Report) announced the completion of its acquisition of DECIEM Beauty Group Inc. (“DECIEM”), a vertically integrated, multi-brand company based in Canada. The final phase of the acquisition was completed on May 31, 2024, using cash on hand for an estimated $860 million. The total investment across three stages amounted to approximately $1.7 billion, net of cash, subject to post-closing adjustments.
DECIEM, known as "The Abnormal Beauty Company," is renowned for its dedication to ingredient transparency, agility and a vertically integrated structure. This approach enables DECIEM to quickly adapt to market trends and consumer needs, enhancing EL’s skincare portfolio. DECIEM’s flagship brand, The Ordinary, has gained a significant following, and it ranks highly in prestige skincare markets in Canada, the United States, France, Germany and the United Kingdom.
Founded in 2013 by late Brandon Truaxe, DECIEM maintains a strong legacy of authenticity and transparency in the beauty industry. In addition to The Ordinary, DECIEM's portfolio includes NIOD, known for tech-led skin science and AVESTAN, a fragrance brand honoring Truaxe’s vision. Headquartered in Toronto, DECIEM operates five in-house labs and is led by co-founder and CEO Nicola Kilner and global senior vice president and general manager Jesper Rasmussen.
Estee Lauder’s progressive investment strategy and DECIEM’s innovative approach position both companies for continued success and growth in the global beauty market.
Image Source: Zacks Investment Research
Partnership and Growth
Since EL’s initial investment in DECIEM in 2017 and subsequent majority ownership in 2021, the latter has leveraged the company’s resources to achieve impressive growth and expand its global reach. EL highlighted the strategic benefits of the partnership, particularly in engaging millennial and Gen Z consumers.
DECIEM has expanded its global presence, entering key markets such as India, the Middle East and South Africa. The Ordinary has become one of Estee Lauder’s scaling brands, with net sales between $500 million and $1 billion. Recent innovative product launches include Multi-Peptide Lash and Brow Serum, Multi-Peptide Eye Serum and Soothing & Barrier Support Serum.
Other Endeavors
The company has been reaping the rewards of a Profit Recovery Plan and a strong presence in emerging markets with increasing demand. Its strategic initiatives, such as optimizing its innovation pipeline and integrating AI, are designed to enhance profitability. Management is progressing well in extending its consumer reach through productive distribution in high-growth channels and strategically expanding its brands into new countries. These upsides bode well for this cosmetics behemoth amid a challenging macroeconomic environment and geopolitical tensions.
In the past six months, shares of this Zacks Rank #3 (Hold) company have lost 6% compared with the industry’s decline of 2.5%.
Stocks to Consider
We have highlighted some better-ranked stocks from the broader Consumer Staples space, namely Freshpet Inc. (FRPT - Free Report) , PepsiCo, Inc. (PEP - Free Report) and Colgate-Palmolive (CL - Free Report) .
The Zacks Consensus Estimate for Freshpet’s current fiscal-year earnings and sales indicates a decline of 161.4% and 24.8%, respectively, from the year-ago reported figures. FRPT has a trailing four-quarter average earnings surprise of 118.2%.
PepsiCo is one of the leading global food and beverage companies. It currently carries a Zacks Rank #2 (Buy). PEP has a trailing four-quarter earnings surprise of 5.1%, on average.
The Zacks Consensus Estimate for PepsiCo’s current financial year’s sales and earnings suggests growth of 3.4% and 7.2%, respectively, from the year-earlier levels.
Colgate, a leading consumer goods company, currently carries a Zacks Rank of 2. CL has a trailing four-quarter earnings surprise of 4.4%, on average.
The Zacks Consensus Estimate for CL’s current financial-year sales and earnings suggests growth of 3.9% and 9.3%, respectively, from the prior-year actuals.
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Estee Lauder (EL) Concludes Buyout of DECIEM, Boosts Portfolio
The Estee Lauder Companies Inc. (EL - Free Report) announced the completion of its acquisition of DECIEM Beauty Group Inc. (“DECIEM”), a vertically integrated, multi-brand company based in Canada. The final phase of the acquisition was completed on May 31, 2024, using cash on hand for an estimated $860 million. The total investment across three stages amounted to approximately $1.7 billion, net of cash, subject to post-closing adjustments.
DECIEM, known as "The Abnormal Beauty Company," is renowned for its dedication to ingredient transparency, agility and a vertically integrated structure. This approach enables DECIEM to quickly adapt to market trends and consumer needs, enhancing EL’s skincare portfolio. DECIEM’s flagship brand, The Ordinary, has gained a significant following, and it ranks highly in prestige skincare markets in Canada, the United States, France, Germany and the United Kingdom.
Founded in 2013 by late Brandon Truaxe, DECIEM maintains a strong legacy of authenticity and transparency in the beauty industry. In addition to The Ordinary, DECIEM's portfolio includes NIOD, known for tech-led skin science and AVESTAN, a fragrance brand honoring Truaxe’s vision. Headquartered in Toronto, DECIEM operates five in-house labs and is led by co-founder and CEO Nicola Kilner and global senior vice president and general manager Jesper Rasmussen.
Estee Lauder’s progressive investment strategy and DECIEM’s innovative approach position both companies for continued success and growth in the global beauty market.
Image Source: Zacks Investment Research
Partnership and Growth
Since EL’s initial investment in DECIEM in 2017 and subsequent majority ownership in 2021, the latter has leveraged the company’s resources to achieve impressive growth and expand its global reach. EL highlighted the strategic benefits of the partnership, particularly in engaging millennial and Gen Z consumers.
DECIEM has expanded its global presence, entering key markets such as India, the Middle East and South Africa. The Ordinary has become one of Estee Lauder’s scaling brands, with net sales between $500 million and $1 billion. Recent innovative product launches include Multi-Peptide Lash and Brow Serum, Multi-Peptide Eye Serum and Soothing & Barrier Support Serum.
Other Endeavors
The company has been reaping the rewards of a Profit Recovery Plan and a strong presence in emerging markets with increasing demand. Its strategic initiatives, such as optimizing its innovation pipeline and integrating AI, are designed to enhance profitability. Management is progressing well in extending its consumer reach through productive distribution in high-growth channels and strategically expanding its brands into new countries. These upsides bode well for this cosmetics behemoth amid a challenging macroeconomic environment and geopolitical tensions.
In the past six months, shares of this Zacks Rank #3 (Hold) company have lost 6% compared with the industry’s decline of 2.5%.
Stocks to Consider
We have highlighted some better-ranked stocks from the broader Consumer Staples space, namely Freshpet Inc. (FRPT - Free Report) , PepsiCo, Inc. (PEP - Free Report) and Colgate-Palmolive (CL - Free Report) .
Freshpet is a pet food company. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Freshpet’s current fiscal-year earnings and sales indicates a decline of 161.4% and 24.8%, respectively, from the year-ago reported figures. FRPT has a trailing four-quarter average earnings surprise of 118.2%.
PepsiCo is one of the leading global food and beverage companies. It currently carries a Zacks Rank #2 (Buy). PEP has a trailing four-quarter earnings surprise of 5.1%, on average.
The Zacks Consensus Estimate for PepsiCo’s current financial year’s sales and earnings suggests growth of 3.4% and 7.2%, respectively, from the year-earlier levels.
Colgate, a leading consumer goods company, currently carries a Zacks Rank of 2. CL has a trailing four-quarter earnings surprise of 4.4%, on average.
The Zacks Consensus Estimate for CL’s current financial-year sales and earnings suggests growth of 3.9% and 9.3%, respectively, from the prior-year actuals.