EL - Earnings call transcript Q2 2019 | The Estée Lauder Companies Inc.

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Operator

Good day, everyone, and welcome to The Estee Lauder Companies Fiscal 2019 Second Quarter Conference Call. Today's call is being recorded and webcast.

For opening remarks and introduction, I would now like to turn the call over to the Senior Vice President of Investor Relations, Ms. Rainey Mancini.

Rainey Mancini

Good morning. Fabrizio Executive and Financial Vice are and Executive Officer. call Travis, Tracey President today's Freda, Chief President Officer; On and Chief me cause with statements. the Since forward-looking where these you press remarks forward-looking our factors SEC, to and refer that differ find let from could release filed many our results you reports today our will to actual of statements, contain materially business, and the expectations To charges, commentary to our provisional our facilitate the intangible and restructuring discussion charges financial in the other is and underlying before changes contingent other of goodwill results related impairments, finalization U.S. on asset the consideration, of end accounting law revenue recognition. at the and XXXX, standard of tax for new the enacted calendar All net growth are sales numbers in constant currency.

GAAP release our between of figures can section Investors find and the Web and press site. our reconciliations in non-GAAP on You

this you During limit time respond all the of please you we turn to yourself Fabrizio. to for And ask session, the can we question so the call to call. Q&A within over now I'll that one scheduled

Fabrizio Freda

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will turn I Now Tracey. over call the to

Tracey Travis

Thank everyone. you, morning Fabrizio, and good

full our review third First cover XXXX financial our expectations year. fiscal quarter and quarter for and second the then I the will results for

net otherwise the stated. reminder I for standard fiscal today by as XXX, are numbers accounting adjustments in accounting the my unless revenue compatible were discuss will reminder, currency new a Rainey. commentary the sales of a modified year we call recognition retrospective this mentioned and at All As includes that the beginning methods on growth Also adopted ASC constant a basis.

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of Excluding the a EPS currency. and operating Earnings $X.XX operating Diluted the per share constant XXX or excluding to quarter increase the the prior XX% accounting rose translation. increased the basis $X.XX, XX% of a compared points. standard an constant increased income year currency. impact accounting for new change XX% unfavorable the of margin compared impact prior of included to XX% XX% year in EPS grew and in of a $X.XX Diluted currency was

$X.XX million cash last shares prior and to due $XXX to essentially distributions our million of returned our timing repurchase $X.XX to million value the from in doubling six invested compared growth six paid we shareholders. support first activities billion operating stockholder We in months and some months, we year, significant and below we We X.X year used the of in the For primarily this to cash dividend, slightly year. XXX the was capital of and expenditures to receivables. international in invest net and generated differences flows payables billion which inventory stock,

brand. and slowdown of driven and During in intangible XX% to $XX action than sales million goodwill Smashbox other took key channels December, the activity for increased the charges represent impairment charges the intangible Smashbox's of reflects related This competitive the other by goodwill slower-than-expected in makeup the carrying retail less The value and we brand. of brand's assets. assets growth for

in for Now and let's outlook We would year. full third guidance. our full-year confidence outstanding our quarter the turn an reinforce to first-half, had for the which fiscal

some risks Europe the January of the for economies tariffs also These retail, instability the in strong travel including are growth uncertainties deadline by second-half. easing opportunities the and caused in China the U.S. U.K. there decline expected and Ton impending in the impact still shutdown, our as outlook somewhat the U.S. and shortly, in of second-half. with additional our China impact However, retail government the of comps Brexit year in saw by encompassed prior a the macro areas and but trends soft in certain influenced of in number Bon moderating in include political in markets, sales

standard. for for Fabrizio X.XXX percentage constant the reflecting year. sales growth accounting is points, expectation of negative new growth given Euro, Yuan impact translation As sales for we the reported X.XXX to to rates in are sales by fiscal the net the the impact our first-half for mentioned, and to X% three of the for Currency full-year the the excluding standard growth for performance, effect of We to X.XXX strong net the X% immaterial expected expect new to raising full-year. currency, now be Pound, the full accounting

approximately a constant before EPS estimate $X.XX currency We rate new XX%, XX%. $X, our expect expectations and lower restructuring of EPS effective of to comparable to translation, $X.XX charges. are a the dilution accounting with from from and range In we dilution standard. reflects rise This other raising accounting, to XX% and of currency, tax slightly to $X.XX by

expect net behind to change reported markets. and to digital grow X% support Currency forecasted X% in impact growth five approximately America, and us, and expected X% This is a translation the the outreach, brand of currency, to For and negatively comparable expansion we $X.XX are in to quarter, North sales $X.XX and points growth on accounting. percentage X%. the accounting points increase is accounting from dilution are to EPS net investing key constant and from third charges. sales to future approximately focused between $X.XX add With expected between continued standard. growth. includes Therefore, in forecasted two benefit restructuring using $X.XX, to by we launches, and other currency year are-half fiscal behind strength further new strong before of is

have and for to concludes line at delivering solid And guidance growth, double-digit our increased year. top of our time. that margin be prepared these questions in EPS the successful the second-half, We remarks. another take as happy growth, this in investments your our flexibility make while full-year expansion, We'll to reflected

Operator

The Olivia the now Instructions] questions. comes first Tong question of America. floor is open [Operator line for Bank Our of with today from

Olivia Tong

Thanks. Good morning. I wanted to start on to China, because the fairly be growth there obviously impressive. continues

you environment yourself either if slowdown they Thanks. share, how new First, launches you faster-growing because a your the peers environment, overall come better saying initiatives, versus in versus more of can online has also you seen your from terms more some your much what's actions could but all appeared market think talk is up it growing than give about luxury growth taking, are the are market things. online. wanting the haven't that comp in brand has do where these of positioning also held into yet, a channels, the And sense you brands, us or of outperformance,

Fabrizio Freda

market. is want the prestige performance environment clear, to beauty our market market very, that strong. build an in further very Actually, of our strong in continue prepared Okay, accelerated because And we be we growth. so the the beauty, prestige I accelerating within quarter has said as market even is in share remarks, to

very different, why this remains very lot comes the activity the economy, resilient is But our And middle is directly category, China the specific a we for consumers luxury growing the where base. class, in growth generation there versus where we very young in a from is the so the overall answer the prestige in particularly solid. market and consuming doing the the market importantly working our categories in beauty very well bigger more general parents prestige of and satisfied, particularly well, are is role prestige is China. shows consumer prestige many beauty China This their of to the beauty, is this young is young market. total is resilient necessarily which more which is than that's share the in also your generation the adult market why than market; beauty is prestige it's but luxury in areas, also that more not Chinese the the of and and from share. of market which in the special moment is question, program prestige in in of and people total share passion than working, So, market other are consumer, for in that's

Operator

question next Bernstein Research. Ali with from comes Dibadj Your

Ali Dibadj

guys. Hey

quantify I think talk little moderating mentioned channel. actually better slowed just expectation North to and is what on understand one again, Tracey, moderating particularly China. wanted like So, specialty in It you multi get channel? maybe Two, by is along a help that bit the to America. unquote but you quote little looked bit. growth in or by dimensions, there -- somewhat China, Want three in guidance a solid sense as your of about Can a

you're guidance you. Thank the on you're you try making Just guidance. understand there. us the in can want to And understand what you've put investments expectations on help your those second-half, give return to us the about then into setting anymore

Tracey Travis

Okay.

U.S. start second-half. first-half I'll year. the in the the the a from So, for we we of In last the as Americas expecting obviously, in reasons. terms second-half of in of particular and from anniversarying performance couple mentioned, not the shipments America the are One, Bon-Ton region in general, in slightly we are improved

I soft. U.S. consumer of At government the mentioned from time, been the think same that in improvement. third shutdown some we January, has the as cognizant Ali, in obviously everything weather And fact sentiment represent will related in we're that the issues So remarks, the quite quarter. our has to impacted prepared

America We and very are I incremental them are also behind quite we in well, brands, some that, be that as supporting those Clinique North will really which investing mentioned, largest do the of strong of we iD to innovations expect focused later. announced programs. second-half being we our and advertising one those on also, in have And globally, will,

in a with And and Market performance we online in own all from retailer.com as seen stores, as of the a others. continued in and well expect brand.com in Canada some improvement standpoint good of few in the particular some specialty traction our multi Shoppers Drug grow channels we've So, distribution, to across nicely site. online, channel department Ulta continues

in to In we that we've analytics, in only and information the to invest have products, how Fabrizio to improvements so those amount and the of but his on the of we and highest terms that inform return terms internally we're prepared in what second investments second-half, launching of remarks generates communicate return. terms suggested behind in we're not seeing lots experience, half of year, data tremendous marketing the a made new what that in the of of have obviously the the products our the

increasing is we of the showed have area. seen first half that on that in return had actually that good improvement for a So made continual that in the we've area And we us. obviously, investments as we've

Operator

comes with Your from next Nicholson Wendy question Citi.

Wendy Nicholson

morning… good Hi,

Fabrizio Freda

Good morning.

Wendy Nicholson

be less to for it is China in to care, spend is and it going skin if Leading of skin that in it's a forward? the the to going plus just bit, a you operating that, have is talk about on margin sustainable margin -- growth Thank phenomenal, is and a promotion the brands I function you trying just unpack driven to can by XX% mean, sense that more you. channel, less that guess, there little Beauty is Forward, care? how the can you support in I a there, get

Tracey Travis

I'll add So Fabrizio thanks Wendy, and question. but for to the it, start may

at innovation, well momentum, in that's in we investment greatest particular skin Asia, care grew all combination the XX% in we that quarter, great behind in we where and retail, travel the So which a of in put markets, was results. and from but skin benefit saw care the the as as those saw

care cost us benefiting Skin in that predominant made a Both of in in is Beauty products skin driver we've well the in some also Leading in as investments better market skin the of and So really the margin that's lower investments way. is terms capability to better social from the internally Forward. allowed digital as care care. these of

factors So I care. mean those are to all skin contributing

Fabrizio Freda

also data like leveraging and cost add in growth because an is way, to the strong an the the generated by amazing target ways of identify and and skin care target strong base be just is a that is growth in groups of profitability ability more Yes, and improving the reach it I'd use our via channel advertising or the much accurate our group digitalization. to in to investment

which stronger making So the new our is then model the based more stronger leveraging we growth developing, is data growth better. construction are and is the

is a of more is a other a that really or -- With our momentum flexible. advertising. is are increase from be working our the advertising growth. The business has money the is costs Beauty very Promotions Forward have you out point market fixed and Advertising from thing transforming flat dynamic, fast now and the much that resource initiative, structure initiative, Leading in a momentum. which that entire is to a good working to promotion front second taking advertising. market good can within which move down doesn't is taking in P&L from strong is clear, advertising And despite

is this we skin have And allocate basically very in So our made agility around particularly this speed is easier improved to this opportunity with much our care. resources of biggest and the globe. resources moment increasing the return evident on to

Operator

with Bank. question comes from Powers Steve Deutsche next Your

Steve Powers

hear you can Hi, okay? Yes. me

Tracey Travis

Yes.

Steve Powers

great, Okay, thanks.

as perspective the actually well for for wanted update more to achieving the benefits surrounding on up Leading an So on Fabrizio's comments them. Beauty Forward, cost I as you're there of both on follow achieving

I correct, anticipated year, you've restructuring math my midpoint. the cost the raised are my the think by and at your now of start if about XX% since correct records is

the initiatives benefits in portion that benefits are you costs those driving we both or hopefully what of effect an thanks? on whether and costs also, overall program in what but increase, terms elaborate again, to hoping just achieve, your are So program the this is point cost cash, this view of and in forward whether could should as increase also the

Tracey Travis

Yes.

So of then of at as We and this. Fabrizio the well I'll start the add raise expected year. benefits costs the the did beginning might as program to

the program to So once program to be complete, $XXX benefits the the expecting million, is annualized the from we're now million $XXX full costs and $XXX to $XXX million be program. benefits to the million full

Leading this charges Beauty execution. seeing that last higher the programs We related Forward. The more driven launched the charges to Leading are realized and benefits XXXX, it year yes, adding Beauty Forward for So year programs we the increase. by you to is this in increase is ongoing of then from

seeing cost from why so So, reason the that's higher the you're program.

in initiatives Beauty the and increase in to effectively bottom-line. growth, our program Forward in initiative the we and an to saw we a in to have organization of supported transformation of digital that agility the to operations us restructuring supply charges you more established chain terms We've of social the capability certainly accelerated and dollars Leading sales our reduce and a market. speed and elements has have leverage to the quarter inventory levels In through and number more that. this which have program, shared the related service incurred much flow allowed

us savings our We more procurement expect have investments we and programs that savings forward. allowed to to procurement in going which our and achieve continue from spending, has indirect

there Leading kinds managing that seeing under last almost invested many Beauty two the in years results areas program different to and been that to future. we've we're the we've three program So half, in over the now drive in now of Forward and that behind see expect order the the a are

Operator

Piper from question with Jaffray. comes next Your Erinn Murphy

Erinn Murphy

share that's travel Can like bit little you is for question just comments thanks. made become my overall of It you retail the how consumer you're for And guess expansion guess with on about of Good bringing if pre-tail then a more what morning. it's on do retail lot sizable on that? I for a a comments a portion you I business. seeing sales. Great the the Thanks. think plan of from a you pre-tail Clinique reactivating about any customer? customer base more iD new and in sounds

Fabrizio Freda

when mainly instead the would remarks significant you making Korea. explained a I in coming journey, products a you ticket, Yes, is and you're your airport the online only my could in the and could Korea the share airport I have you then the prepared you so pre-tail in possibility is basically will is and in some on is buy say today as of to buy airplane before the at airport that's cases get in

about the this good area it's where idea. pretty started in becoming but We has the of believe So is the business. is beginning of Korea this learning it a significant part a

online your to anything. store, the conversion the First but that to XX% you time of conveniently while amount because to of it's good we for in to increase even a a traveling improving you without possibility more decide to can XX% the the know the process consumer an travelers all, the as taking to service that can consumers convenience so investing know, go estimate yearly interestingly choose this it's good had shop the Obviously, or by if of between and we time conversion. buy impact

be travel overtime a the So market boosters this other is overall be opinion reality. can very in but booster clear the Korean of retail to for it conversion can Korean a over be our potential mainly in moment because in time,

the lot and question way more interested, and the advertising promising Second of high by programs with consumer my the iD. have months the the the believe that services Clinique Clinique initial go, we they very Clinique our trying touch can and in iD, next bring the starting potential by be the ability of strong most The consumer is in will are that that provides that people initial opportunity are eight is the as the on actually factors that I personalization four, the months is the quarter personalization the the the are concerns data, just the with in so Clinique results there are will majority to consumers we they we iD spending and to the great very product behind to is tax next the these personalization and from combination Clinique much in in every what focus see and will have, brand very comments information concerns address see hopefully point large the levels a believe of potential. idea together explained promising we appreciated we has the the then together is a that with six,

Operator

you. Thank

Modi, next Your from comes Nik RBC Markets. Capital question

Nik Modi

Yes, thanks.

first-half been just operating just for and real flow quick profit the the housekeeping cash the lagging So has on of the then year I a quotes. see cash question flow

question and is, I'm in diversifying. curious think nugget that sampling that, has really the on so been So just mix to channel wanted you if Thanks. that's line. finding context size is how some decent much when to get that the about around broader and you're curious if P&L the then your money area? understanding opportunities opportunities a just My finding I'm save in you're just

Tracey Travis

All right, Nick.

support was I two that running really as inventory are we in capital, we've that primarily bit growth the years remarks working growth now, strong flow, a a had prepared cash last the of staging bit on So to that than year, our flow quite less certainly going to mentioned given cash the related forward.

payables what's purchased still last to with improvement record as was really cash than obviously as that's recall happening in So, year we we receivables first seeing the you less that year as improvement relates excess year we strong us and of still relates last so a amount combined very had. payables. terms cash strong we programs with in the so it for aggressive quite cash to and fair half growth, some We're had saw but own a that enough generation for flow cash the flow that it in that stock which

Nik Modi

Sampling?

Tracey Travis

certainly bit comedown and than shift the we a and general in require samples in in markets, of have the the so more growth I certainly in would multi -- in channel retail so in department it and Tmall venue, as online less, Yes in but down. and Asia require we coming of travel of that say certain the venues does but in mix the a samples lot so in terms in cost but see samples is that with mix certain particular samples has cost channels others some more overall sample out the do do sampling in specialty sampling of stores,

Fabrizio Freda

and great in quality with done have because want the the I in to a cost more is to idea when have of thing the reducing only rapacious rate able trial in upcoming continue per the cost samples we innovations sample. kind more future that add been the the in work but And high products trial the we have sampling you is is the invest are sample, particularly number per great a some is invest a of very the promising opportunity proper we that to to will our on early we new so create with samples

Tracey Travis

And are we're products the sample in that being then. offering of terms more targeted

Operator

Berenberg. question next Your from Edwards with Rosie comes

Rosie Edwards

QX? and all, the quick And think number of good And mention vest China China Yes, times I market those here. largely at Thanks. rights in that and follow-up you market France gains in have that conditions in from then, increased, yellow for they're just on very no we thinking the that saw no am of prestige of describing do just right when versus share emphasize you a the a mass prestige other channels morning. quickly, disruption the

Tracey Travis

I'll question. So the second take

you terms some mentioned, growth did France, obviously, a the we see given growth France. bit in slower but in of did In protests, of see France, as we

I had mixed So did was France the grow. actually but one markets of Europe that Western performance about talked

Fabrizio Freda

Yes, now good. France was

the market accelerating, to is our the to trade Your out yes, the than and continuing high is is of that is first more mean situation young there so question paying products past. trade in concerns high class and on are we in the of actually phenomenon China, general even is in that middle view that economical the they quality to well, what in China quality is quality continuing where again, people and that a

Operator

Mohsenian question from Stanley. Morgan next with comes Your Dara

Dara Mohsenian

guys, comments America… on the North so Hey,

Tracey Travis

Dara. Hi,

Dara Mohsenian

you? are how Hey,

Tracey Travis

Good.

Dara Mohsenian

longer the America and going the do growth January a the January year the comments next consistent beyond, as then particularly week bit speech last that, past tonight's out aside Thanks. for some of in specialty seen on margin with setting to issues of some few maybe you so to expect ? perspective North moving union continued season forward of preempt you point but we've also back I holiday North compression or and can do get own was look in think sort on side there fiscal going the terms years, and the on forward more North and can just obviously that growth state there and the reverse at So and and large you a of investment term thoughts obviously America helpful see online and retail, for give were America hoping your

Fabrizio Freda

beginning government trend, a performance that to lot then least to soft that the to are November we was a spend again go in of and we that December. also attribute and consumer America pretty with trend the Absolutely, and not to the back the last believe will North sentiment American more on very included of positive. very, North overall continue explained start as believe quarter Tracey perspective But a we month in I'll of our put our was very on December in January we easy part process at shutdown moment turning America. was money been and to business of growth the in we around the quarter in North the has and the solid November

in when the at we So quarter results -- we particularly flat. U.S., look was the market the

X%, Now, the market was before growing X%.

we what the in we the is are all see the for performance in So frankly, in market the that our U.S. the not in the difference quarter is long-term. market is doing

six it of the in four tailored been great months, the next quarter data particularly the past aspects. innovation American some even has that in helpful behind to place unchanged priorities we first all, and will So in long-term investing is money, we and see of the have will is are the advertising more it our U.S. power the more in taking some many the than more right is on we consumers agenda for what with

what Our analytical to have group. the our a efforts granular have or much U.S. more by analysis team opportunities also are helping

tailoring which share place American then, we end in we that will do by expansion fiscal us a as point, to part didn't are where be this of is that way able in are And majority in the going more people this department underline market channels store increase fast-growing target help fully possibilities focusing accurate past. been example, business are store are results we groups field on existing be the will further working our allow a our an I with store we we partners to in to restart we of the this year example. thanks accelerating to want very store, to and in to products much the of restructuring collaborative the group your will obviously and And growing we channels still and the the ever absolutely partner. that in more encouraging growth with will our the be sufficient happening to our hero department department Hispanic our the have percentage in also our situation execute in fast e-commerce is faster region where very in For believe a by the department in and

the but overall evolve factors so, will then growth the for U.S. how how and situation evolve combination and in and market on the from of overall U.S. that. overall the we will absolutely in in future consumer in are believe the a the we again market focused Margin? U.S. sentiment fact we depend And long-term, the it's the that also to when will start bring will this

Tracey Travis

then and Yes, they are on margin.

in that certainly returns growth the a in from was just include quarterly revenue itself as And what the of does has sales also Americas of our sector from The our we a strong charged some will we the impacted that standpoint. in when recognition currently. of made some results expenses, it we million areas start We and a profit see does that was then of that items the in other the segment that portion Americas expect of the in a as And Americas the in Smashbox the IT because the states we we other softened but margin to had is the standpoint so result $XX our segment. to it segment. have impact region we growth Just Americas as impairment we're quarter, these mentioned few press the America impact always suppress against the standpoint impact from that seeing reminder a here, terms release. that corporate has certainly investments Americas in it happened and margin some margin

Operator

question next Levy Your comes Macquarie. from was Caroline

Caroline Levy

going amongst to Thanks resell just I I'm to perspective in you the pivot much resellers happen required China. good your and who now to in so might and that morning. Daigou, tax who the changes ask to for ID back have a think China retail on buy travel are

So to an import been mentioned an be whether talk believe there tariffs also has segment. taxes and impact, and beauty you that will the know then is there's impact I think about lower impact we you an just in some

together, do think things different each play these how all putting them So you out? of

Fabrizio Freda

comment just Daigou phenomena. the me on Let

not First impact of enforcement generally. the all, our retail the travel stricter has business seen from

Estee remember products we that add buy to important consumer a country retail So globally have the companies single our can is standing don't Lauder however so we the see Is travel ever. impact limit, also the long that any are since policy, numbers at far. in

lot obviously avoid ID's to these the from any our of because world. strict never So of limit we business the were markets around any policies guys benefiting that and do phenomenal of to

not new of is to is that we whatever So things And moment today difference the the that see general, the any beauty these will less because be Typically impacts. that we being on as see the be advantage of end at an us items believe is restricting in probably far implication prestige this the legislation. of do the we would we luxurious. other difference, less affordable past see in turning important the policy the believe

and even new which still buy is lower within regulation policy. can price makes our the something people still So purchase again

on continue than this expensive actionable so items very good low will items. on we And being more cost

term believe issues. independently also be long efforts And Daigou differentiating business to the of also our the travel the these for we focus And from so there on drivers retail then factors will continue our overtime. I

passengers middle the brands, increase the class continue corridor, get continue helped So the international prepaid distribution to potential shopper rising term of the to by working in before our conversional explained when system. the into also continue to we target and we of new I at as long really the travelers the our

also channels exclusivity We products. through in terminal the to exclusive continue deliver more services in

long their these the more great term phenomenon. travel do they of we would actions the created all whatever offset by be retail for in by So believe I the than that had as to potential limitation

-- of sorry, So that's the was aspect it…

Tracey Travis

we've And mentioned included any China it tear guidance. have offs then expected Caroline, relates discussed as as we to our that within been

also tax done in have some who that income So addition the in the to some China consumers stated import been and in our there benefit we will the our second on prestige that's to stimulus a prepared players growth half to beauty support now, both certainly import this as expectations is year and relates increase relates that as years in that passed believe remarks of steady over has of We mentioned margin consumers. same. cuts And think the for continued do as have expected to that savings and the has Chinese for cuts. last another beauty. it few the we growth previously that their yes, with stimulated in in have And in it tax are to we duties, of sure, certainly expenses. all That who duties the prestige Fabrizio

Fabrizio Freda

And retail big retail and the advertising duty business whatever populations without origin for price great biggest ability travel impact increased these travel discounts. by The products The the to we brands brands the promotion travel without these because add in for demand country is system key last thing investments, origin is flourish will our create of whatever investment business our the or not obviously aspiration just of on that, I retail is countries of travels. want in and particularly or of driver our the frankly retail. great driven where travel or that product is and the to travel our whatever and great the

business is advertising, innovation we at in and before, invest what liberating ability in discussed the end Beauty idea results system we key Leading seeing programs improved are in that what meaning the the markets resources of Forward the to retail is it. more resources with key also travel So goes the our that these our

driver All and forget should travel retail we for of main this not is the that.

Tracey Travis

purchasing. that's traveling And the have driver and seen markets we Russia, Brazil main other consumers in the that same in large China,

Operator

with Barclays. comes Lauren Lieberman Your next from question

Lauren Lieberman

about morning. something Thanks, just Middle to the I good East. ask want

And route-to-markets. it's I business strong so a distributor super that the given least it's that call you very been is to know choppy say

case So or just and us to an manage two in differently been that demand you've give shipment then ago. years you've if changes kind you to not any the of route-to-market, kind versus in maybe out anything maybe could on in business made able do a smooth than of update the

Fabrizio Freda

seen stock. adjustment the Yes, East today is say of plan in have today more Middle of we just in is I do we really what because beginning have of the to many seen what the the we aspects have reinforce

gone the long even down products. that the when very just buy stocks slow you products slowdown biz were that of there new when we sudden which the that so negative to stocks an of orders and seen people power is breaking If new you market ability it doing what because consumers what because chain involve was and stocks high, have that And have there more our off and of high these of and the of really ability improvement the means reasonable that interest, don't consumer more we we of in innovation described level is the these power back our the which counts remember the on cycle the to more the all end went brands. add down in happens more create had old been have first of they the the stocks low trends. In sudden two to at

we the they and East can regions the the that has current that of very make So high we be potential potential future, obviously with years we in far far we Middle have have high far to the but results East. get new have is more not to this That they be had is on situation. improvements In be enough brands it beat in published sizing and potential the leverage we so that's leverage further innovation. there yet the can the couple clear be the has which to in next the have Middle will that

Lauren Lieberman

Thanks so much.

Fabrizio Freda

You're welcome.

Operator

concludes That today's question-and-answer session.

like Eastern through is today's day. your recording to Conference to Call. dial for unable X:XX please a be wish XX. you call, a Lauder a at today I all hear To thank Estee playback all join were available the for the call, and would good will you passcode you Time PM XXX-XXX-XXXX, of XXXXXXX. If That concludes entire February participation,

The Estée Lauder Companies Inc. (EL) 5 Feb 192019 Q2 Earnings call transcript