The Estée Lauder Companies Inc. (EL) 5 Feb 242024 Q2 Earnings call transcript

Good day, everyone, and welcome to the Estée Lauder Companies Fiscal 2024 Second Quarter Conference Call. Today's call is being recorded and webcast.

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

Hello. Fabrizio Executive and Financial Vice are and Executive Officer. call Travis, Tracey President today's Freda, Chief President Officer; On and Chief me actual with the Since forward-looking where forward-looking you'll press remarks statements. our that SEC, differ and refer could materially factors let those cause release filed many our to you reports today our find to results of statements, contain from

other on charges discussion net of the adjustments stated, before our our commentary financial impact divestitures, acquisitions, the the is otherwise results impacts closures facilitate noncomparable our To restructuring sales in and of business, and and disclosed Unless excludes press the expectations and currency online foreign of brand growth release. also organic all translation.

and and press GAAP our in You section of reconciliations non-GAAP on Investors can release website. between our the measures find

reminder, directly make turn retailers' and includes over As Fabrizio. through our sales online brand.com to to the third-party products our to estimated platforms. a include sites now through I'll It [Operator also Instructions] And our of through sales we call references sales websites. consumers our

to and joining Thank us everyone. hello We appreciate you, today. Rainey, you

decline although retail our decreased the business expect unstructured sales expectations performance. For adjusted primarily sales decline exceeded organic normalized rest than year. overall for the diluted inventory alignment quarter contain to delivered levels of organic decreased of China, trends trends this quarter, the X% travel entire in and to Asia prestige EPS. retail retailers second outlook of retail fiscal global our at both X% levels sales by progress the This retail, beauty trade performance, we priority end our travel sales continue by inventory activity. We the with our were in in local global better Organic Mainland reflecting in business to with our much trade third for XX%, and better authorities driven trade organically. slowdown of inventory by was with The organic to and than execution made of reduce our various the be meaningful efforts market

Our global mid-single and retail digits. sales growth, travel China Mainland rose retail excluding

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discipline. Beyond of reducing higher we in travel the inventories in realized retail, with and trade -- working strategic of levels travel capital, the pricing expenses Asia managed improved

for year, the as the we we in outlook, our we around and to full our volatility areas for macroeconomic higher for tightened revised are outlook rate. year anticipated operating growth an For In primarily EPS full account this have tax updated and maintained risks prior adjusted some diluted world revising range outlook organic have for the sales, of profitability.

are point. inflection we an ahead, at Looking

positioned First, fourth we accelerate total are growth to the organic return sequentially expect for quarter. we sales to in organic quarter and company the the growth third in sales

compared year profitability Second, second half half. we in for fiscal this the to are the stronger positioned first of

Third, we XXXX in of the meaningfully XXXX. are and profitability rebuild preparing accelerate our to fiscal year

be we also Indeed, generating been to drive areas have operationalize Plan. to resources teams invested to early long-term the since you we consumer-focused opportunities engaged doing In profitability while Profit November, with growth. in enhance spoke actively in so, Recovery identified our more have to further

we program. include are Recovery expanding result, restructuring Plan a As Profit to the a

to the agility will While and sales restore better and a now more growth this profitability, company position larger increasing acceleration is plan difficult market. believe sustainable decision, supporting this while speed to stronger we also and

our trends. core. innovation, and to to faster distribution digital and speed to consumer is building go-to-market as advancement, at and create product anticipate supported the increase agility consumer, organization, decisions-making the respond leadership localized enabling by quicker more where and we prime For and better we commercial strategic an intend Moreover,

now The previously. from is to to incremental $XXX Profit $X.X $X billion Recovery $X.X into to Plan deliver million of expected billion operating billion, up profit

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program excellence, the the restructuring execute us have of profitability. Marcel. with this our and Plan global a to of engaged part on to realization firm, will services, reinforce And larger Recovery They provide of with Profit Alvarez partnering consulting we our sustainable drive as advisory commitment plan strategic to rebuild

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to Estée Turning brand. Lauder the

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at as to delivered year and than are the stronger expansion an we growth half a sequentially as organic in point, from poised return to well inflection half the closing, first second In profitability ago. sales

our given in prestige stronger deliver to in progress XXXX the global well consumer-facing its 'XX have profitability we invest positioned for to growth capture as well restructuring positioned to exciting Profit are Recovery year And we Plan are program. We fiscal as well in beauty. areas new opportunities made initial at

teams leaders us point I which and work and amazing to trajectory. our and growth wish for extend the my inflection to this to renewed product sales gratitude the has of their taken dedication, hard

Tracey. turn the call I over will now to

on and quarter Profit I'll results, quarter second full Fabrizio, our followed you, outlook. Plan. and by I'll start also expanded Thank provide by our financial third details everyone. reviewing Recovery hello, year our

of met As organic net expectations. quarter our our second Fabrizio sales decline X% mentioned,

higher $X.XX tighter quarter. earnings management exceeded our experiencing expense rate despite a through our per the due of initial business, share in of to our outlook Additionally, shift tax mix the geographical and for

Middle to our net markets XX%, the of From a region reduction attributable overall Asia in mainly sales had flat X% mixed geographic retail Europe, travel all results, parts the The accounted our net the markets. from disruptions East standpoint, the leading Africa for Middle to organic a other declined business challenges and overall and in impact across East The persistent region in Israel sales business. growth in growth. and region's

challenges net Organic X%, region Asia in fell in continued Pacific China. Mainland our reflecting sales

more in freestanding the growth double-digit by While brick-and-mortar The more our results sales, on offset total than performance overall in sales during Dolan the online on our than performance softer-than-expected declined led increase Tmall is online due to our XX.XX which doubled, event. stores.

in growth as Hong saw of growth SAR we the high In sales and as growth, strong led Korea Kong double-digit Japan. single-digit the in rest net region, organic by well

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in in North from program Organic to by Americas driven a net America last sales declined X%, changes M·A·C's prior made year loyalty benefit take-back the year.

flat stores and online. in Excluding net sales reflecting by this and and stores freestanding experience benefit, offset relatively in specialty-multi growth North department softer performance our America, were in

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a net strategic in The largely driven costs as by year. foreign items decreased and from brand mix of Our offset last actions sales, the were to XX higher to points than pricing currency compared gross by positive margin basis and sales. percent impact promotional due more reduction

points year in Selling, advertising $XXX growth, to Operating activities XX.X% supported the also collectively destock year. to for of and margin accounts as our compared from the innovation XX% accounted and retail travel we retail. continuing increase income Asia XXX basis prior XX.X% certain and promotional while operating million, to to contracted last in declined

previously estimated change the result compensation. year. also share-based reflects This tax The to as XX.X% Our our of to fairly a rate in foreign last to impact an mix issued on rate fiscal quarter effective was rate due our for tax reflect for increase compared in unfavorable the to earnings. XX.X% a the now geographical was true-up operations related quarter in XXXX

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reflects favorability due we lower compared million net partially largely in a to goods the from in in in and inventory, capital expenditures, the invested offset our in in The increase quarter, million actions returned dividends. earnings. year decline year. primarily working we net from reduce was operating that generated capital, $XXX last from During The sell. the million working improvement and through stockholders we cash to have taken activities to to flow $XXX We to significant by last $XXX finished resulted days capital semi-finished goods, cash million $XXX

outlook XXXX, to outstanding our occur anticipated for the the now May the Turning and Clinique's excludes of from impact to derma. active includes heightened in which equity for focus fiscal the remaining payment in remainder DECIEM XXXX

organic reflect While our in expectation. our operating 'XX lowering Despite this from of the our outlook, QX high change fiscal we expectations, net are end volatility maintaining our world. to geopolitical outlook risks tensions certain the on evolving to we sales delivered continued sales profitability around and we year macroeconomic range areas are full

sales to for the EPS and for spot reported the both year. $X,XXX quarter the $X.XXX primarily third we This $X.XXX the are the won, earnings. translation. benefit for Using reflect foreign to rates Korean negatively impact of pound. third full translation our outlook geographical $X.XXX Furthermore, our tax our mix rate, increase to updating the estimated the currency for from XX is effective in EPS and December diluted offset yuan euro, and more year anticipated largely the due expected is anticipated than the of to for EPS full currency quarter the Chinese for

be quarter increase China disruptions and expected businesses dilutive as sales as retail, return well In and continued anniversary our business to to net the as last X% growth some retail travel disruptions net potential are in in Asia inventory by each to Asia for further of both East growth. We of to we third Mainland reduction retailer the X Middle risks this X% are expected expect assumes year. the organic translation Currency in point. reported business our travel to the in experienced sales to

translation expected is between further X% in risk to Middle X% in dilute EPS decline XX%. for a disruptions business East Adjusted $X.XX a of We are the adjusted range of between EPS by XX%. expect to [ ] to to to decrease each constant [indiscernible]. expected Currency EPS of third currency potential the and an quarter $X.XX of increase

full the and organic increase decline between net sales of and range For we X% expect year, an to a X%. of reported

down trade. with our the manufacturing of locations when of capacity, line of reduced in the in-house and the support inefficiencies in in-period trigger to products manufacturing running resulted our reflecting This related instead both cost recognize as in sold. to the has and inventory a lower levels, and Our some are been plants requirement at pull shipments have production may costs in

the year, margin We to for and pressure this fiscal expense our of primarily have in the gross potential outlook third corresponding reflected the quarter. in balance the

increase operating Our the to offset full is plan year approximately mix XX.X% higher The previously a X% to as and to last larger full jurisdictions year, a to unfavorable disciplined through XX.X% pressure as year. earnings be incremental well year and our compensation. fiscal the contraction margin gross margin share-based now outlook rate expected unchanged from effective remains tax of be expected XX% partially reflects expect management. and in of We issued compared between tax last expense to our XXXX impact X.X%,

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have the Given profitability for we the in in growth net operating half second sales of year, initiatives the we to return and progress first stronger strategic organic to the expect half. made

restructuring Plan this in XXXX. fiscal Recovery In profit November, program, plan. of year have support expanded we rebuilding of announcement our we the with X-year announced and the XXXX to Today, further a Profit progressive margins a

our to consumer to increasing on growth, our Fabrizio operating profitable and activation more we are strengths focused strategically while our sustainable, elevating As mentioned, leveraging return our accelerate agility.

areas us begin to restructuring X%. net unfortunately reduction program for globally duration within select to the decision of our program positions necessitates is X% is expected third Profit rightsize in the difficult continue in restructuring Recovery expected The the streamline of quarter and to making of the organization, and an The designed which Plan.

of expect generate these reinvested to and million, to be growth. expected is million drive take between million annual $XXX before savings A activities taxes. gross and We to consumer-facing sustainable $XXX savings of charges $XXX portion in to $XXX million profitable of long-term

incremental We more restructuring today. the with fiscal to to $X.X expected than benefits debt these of the to fiscal from all now year announced operating Profit of $X.X in all of plan expect inclusive billion, under contributing yield end Recovery profit billion to the almost The profitability benefits benefits the operating program of through slightly half initiatives Plan XXXX. is by of anticipated realized and XXXX, drive

our in we to our the return closing, and drive of express work We tirelessly and as the to to better In year be beyond, return our growth growth business to the Profit priorities with position believe our to done sincere work world that teams will execution our long-term positioned fiscal of around forward. expanded Plan, gratitude to that company the second the with our we profitability. being to us and sustainable and is execute Recovery successful they against half

remarks. your That happy prepared at be We'll take concludes time. questions our this to

with today Mohsenian Our from Stanley. question Instructions] first Morgan comes [Operator Dara

morning, Good guys.

be that beyond pushing time? job then a potentially are the in So Program. little first, just savings emerge more if upside a beyond the a question structural And entertain a in think on could the done on couple Recovery so about of the enough clarification you've program savings just generous past, to and potentially Profit of to job pretty areas over give what's do goals, cuts? questions changes good other And delivering restructuring you the you Can you'll China. you how detail announced? And under

changes brand promotional brand the been China there's emerged perception category et performance, that I in digital in selling, to willingness of impacts itself, mass structural Estée austantaceous, be impacts, have to have think, share. clearly, there the some cetera, changes beauty, consumer

China China maybe, That in your to changes? Fabrizio, this step take on reality? broad and in new back would So thoughts from are focus here from But specifically, just here. What a also adjust the do helpful. you points opportunity how be these

margin, on was lost, question quite Profit focus rebuild So shared with we the margin. is of as your know, where to you was plan -- primary all the which Dara, Plan. is November I'll a we've in of our Recovery start gross bit our What

as get So has were as which discounting some of that at improve the should the place that we mix, our to profitable in that really about putting strategies well that is some to on channel last the more focus gone spoke our on of control, inventories time over few under we years. obsolescence,

initiatives at that are being expense incremental some reduce implementing talked in we indirect of some an from areas. procurement we standpoint, an to our program more pricing We have. And time of terms of granular about, the that also expense strategic

in So an then the Plan the initiatives And that -- restructuring that $XXX those spoke the about we've Profit were [indiscernible]. the time. up to to $X some billion made that additional we with Recovery program of obviously, million element the we of at that terms that announced China?

question, lower so -- consumer sentiment sales this on period the all, first recent On Yes. soft that the drive of in some growth. the China we had prestige

opportunity in However, all, optimistic the growth. long-term we of are continuing to very for invest first and about China remain

The second health brand point asked you the changing. what's about and is

had market are Care. gained top the we was share Fragrances and really on gained X, share XX And The luxury, in than really, quarter brands fiscal in KILIAN, Care also X. Ford, term brands, continues there net in La many small category, particularly in and Bobbi gained over Aveda, of and Our of really, Frédéric being XX.XX. there Skin many importantly, market share we much Malone, in several to double-digit Tom of brands, our a year reduction growth, like Brown, market of in growth Mer, brands Skin the market our share, we Le better quarter really important retail -- extraordinary growth has we gained been of Jo Despite sales are we strong. Labo, but strive. In our points, Malle

Hong part also share, in the And to total reflecting mention [indiscernible] Mainland grew Kong, the where from in market of equity is freestanding in element strength here. strength Another our the store as and in should double-digit substantial I we China. the support both growth,

continue we building great determination long invest and to said, we going the a I are As in there and in China, share we have team market to term. believe to continue

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doing We Tom mentioned also well. we our which Brown luxury Bobbi Ford, believe particular in the remarks, I'm opportunity the Re-Nutriv that Le Labo, Mer, there luxury among I are a that Lauder strong referring Estée to brands, And launch, prepared is as said, aggressive extraordinary in area La plans. very and

us. new Strong Shanghai, new important in is it's an and leveraging -- labs, in accelerate, asked aspects. is the laboratory opportunity our innovation what for HX, continue the changing various other by the in will will which way, And important plan you

promotionality, with managing and in have pricing the retail model about future. pricing, decisions Chinese process working the team channel the team privatization, the is in improved in and and TR better the promotional this or the between we dramatically and consumer So making the China for relationship the and overall across better framework, travel the of

brands. local of development the about also And

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this of so lab develop continue to as compete a this environment And to trends. in our differentiation in is how that the will local and well. in local innovation evolving Investment we'll invest part these in answer

we more Asia in Last, the China team in to in agility ability with more to demand. -- a And to factory accordingly the responding the agile to are of our following supply chain be demand. plan shortening all Pacific and

we have a net, China. in strong So business

continue are to strong the in for continued determined we term And -- invest have have long We to we share. China. market

comes with of The Bryan America. next from question Spillane Bank

of so frame. related you're at I long next same and in optimistic it term. time going was. measure an years, organization question the X slower how context And 'XX there's inflection. right? the Fabrizio to just right, lot time, my China, today Tracey, positive an inflection, that so mixed the as But is yourself to 'XX things, again, to ask a over clearly the of reflecting I guess stock for maybe But a the than

You've got hood, a to the on underneath the and of lot work program to restructuring do margins. execute improve right,

and last of I'm to just are So would years? the how do you've term, you're improvement just got just how again, the over you And linear thinking given you're it couple just much about I versus guess be. this near in to change going yourselves curious measure the maybe to way how how going different work maybe was businesses normal

opportunity the an done the key need fresh inflection we realize address we that to align to post-COVID do. the And what overview months developed the to culminate work that this an your gives several changes find opportunity our I in of environment. and the today point hope give some absolutely. of in what me important last are to question in you have Yes, trying to future is points [indiscernible] we

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change that, addressing to key look The we we the at addressing first points. need are are way pressure of all, we and it the is

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rightsize that need part margin, addressing organization. addressing our our was of margin driving second was gross obviously gross cost and our The structure -- margin the

which Plan accelerate Recovery same are it, ability execution in to the things. at the additional Profit the And time, the our is of profitability strongly of advanced, to and this the this and and to that. going So and recover is our large restructuring Plan addressing ourselves to organization. the more on market the Recovery to are we resource aggressively develop measure speed future to And measure Profit designed and plans right in decisively agility, growth

this And agility to mean and to for compete chain better previous allocate in to for more example, brands. question with one, local the agility, mentioned speed world more supply in the and just volatile faster market of I resources innovation I as promptly the

part in profitability, the margin that Care. APAC Skin EMEA, during Americas, Skin want in strong important discussed address need China. ex we was quarter the Care very as several was just Skin to recover in the our growth in And X in other clarify The we of obviously, Care times. to profitability to growth I

China, during I Skin said didn't market Skin share way. we we grew quarter a X, strong before, In as very grow in but Care Care,

Skin retail position, of that the grow TR as all we leveraging Estée opportunity The are our long stocks innovation the continue Ordinary that the the Care that The now are in to heritage innovation, activation term one the are Care and -- addressing on Mer La its Skin in and Fresh, we evidently future Care should built. announcing La future Ordinary the Lauder, engines the So of Skin actually these Clinique also globally, repositioning the Mer we

first the addressed. that's we big that So pressure point

addressed growth and China I the was believe previous my long this in China term. the the I focus in second The answer.

derma of our in position the very distribution clearly this, in consumer opportunity growth the with segment. is extraordinary mix Ordinary third to Heritage we first And towards the one U.S. we and continue success, share and The market and stabilize are attacking accelerating active segment our with will improvement needs the our addressing The Clinique all, address plan channel to

very accelerating are sales region. which is in our the Fragrance We growth, important

have remind just market to And Care, the like prestige brands And top and in top in also in The we Skin with the have points gained arrival Ordinary care in we X. Skin of X region. Care And the would of that the Makeup skin brands XXX in Ordinary, in share market. I X and The now X the of quarter growth

we very our So the North decisively in addressing obviously, future opportunities, America. are

have in have In this want strength moment, to Kong, like Spain, on APAC strengths. COVID in Hong building the with improvement a said point markets we which important Skin for in And example comeback EMEA, Italy, China the Care we second So to of in growth period. that is continue clearly big is ex Turkey. our very we strong Germany, continue we versus

mid share and future have have grew one we digit, in acceleration. strong ones strong markets we markets opportunity where emerging very the market every for we emerging Our believe in the top double of position

business, our digit, in strengths direct-to-consumer brand Our our also equity. grew store supporting freestanding double

market, and player on remains on confident continue So We We very Recovery plans remain these a in very prestige enabler long on as of trends beauty high that we this the the all said, focused key all will of building and future industry. these Profit I as growth, remain pure so at good attractive. a this. our future. the our finally, the strategies And least in Plan in market the will consumer term, the focus in restructuring be

elements measure combined. model allocation on investing yes, our ourselves pace in we are are -- to back to on and measure of and all needed the feel going for are that -- to agility growth speed these to going we to resource our brands So of Meaning profitability. ourselves for sustainable recovery future. the we inflection an and with And in the improve we a changes at organization market. going We're readdressing our growth point

with comes James. question Olivia Tong from next Raymond The

of of entry-level points sort a towards to With department come distribution especially the down? talk diversification how as exposure bit Clinique to continues first -- about just in U.S. about little think share. U.S. store follow-up price you wanted U.S. do your further a in stabilizing distribution, Ordinary and comments in prestige, on I terms The

are some we you for that we increase is it are And the address to on focus are know, no, working to as time. this way we we on -- going channels. the high-growth So continue

improvement the be have We some specialty will in continue the period, that in our and focus. last to done channel extraordinary

are we department focusing are managing partners market we world. this continuing more and And we omnichannel. carefully. business our more have have online and also We -- high where And obviously to consumer opportunities we accelerate are support the our in is store to with various the that share shopping and that

growth continue the in on And we opportunity we the had United omnichannel's are of put that to going to focus States. so

in by you doing. step accordingly we're And this be months step strategy see what implemented XX that's opportunities. the So these to will next to

Cowen. comes with from Oliver The TD next Chen question

times direct-to-consumer the there, travel half the sure healthy what much making and You as will in gives and in back your related many you'll But know, new shape. more user-generated in as some the terms digital there? on agility you level of we community thoughts terms model that a confident what lot inventory are do retail And formats? follow-up, what and your being is are terms inventories in of well aspects priorities of Asia the and mentioned be key of back you to as as to engagement, better important content embrace the inventory half, conviction very just in a

Thanks, Oliver.

made the on start progress, were levels bringing Asia high inventory that I'll prepared the pockets of said our So trade travel inventory as in We inventory and with down significant remarks, in we the retail. levels. of in

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comes question Telsey with Group. Dana next from Advisory Telsey The

products that to it's enhance the and that do have you relevance Fabrizio new launches how you And about stores and how changes. the and distribution, relevance you what changing. department specialty-multi continue Tracey, -- new existing how hero about you -- engaging that how pricing then how as think and think you see the pricing with and for both do coming, as

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terms pricing order -- So sure the product planned of looking make at competitive actually differential product market making are we're We fiscal added new cetera. that replacing relative appropriately. new product that to particular benefits, goes to what innovation pricing relooked in added in et franchise, launch, positioned launching content, we packaging, at from that if an the a of cut it's pipeline our and measure into is and sure what have again product the our for launches that, 'XX is accretive. existing benchmarks sophistication new look also related the in -- standpoint, to added to But were our model, do some fact, that at in that

things into So are factor that it. a there number of

product as exciting, of the playing Fix new that and got some is X lipstick. with exciting mentioned, that second accelerating the we relaunching longevity MAC this very think is got that I Studio half their the quite Estée year. of largest M·A·C We've Re-Nutriv we've in on Lauder the [indiscernible] focus in is launches market. really franchises,

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The from comes Steve question next with Deutsche Bank. Powers

recovery profit plan. So back to the

in base, to considering business outlook profit of implies fiscal $X.X the years. or profit operating here, fiscal today the your and or before which, you think from And I implies billion the 'XX. of I underlying all billion billion recovery are 'XX, operating incremental presumed roughly in think fiscal that's the midpoint in benefits profit $X so program of assuming at that so 'XX off $X.X over the next as couple a growth framed

can you confirm So that?

correct. That's

Great. Okay.

incremental do expectation being do guard you by it's essentially So But you're profit emerge that years? protect guess a that guess, just I time? objective. question saying I pretty those the do objective investors couple against is protect today, how incremental how -- for costs next over -- firm profits investments So you countered you're into other model over creeping you comes, the against I'm saying of today how that the if the that an

able things be what disinvest the of you of is through we to in business. the There of we look, are we with need within terms happens And question, regulatory base a how a of things business, one what no, do great are the to that Steve, are terms invest in -- changes, base the before in those inflation. realistic So certainly with make with choices and Profit Plan, organization to it's that working that lot manage. Recovery our

of, we we've usual period outside of base progression, those are look post-pandemic normal which as this that just you're that with at what focused areas on what progression the So is, obviously, keenly familiar disruption very are experienced. we our

So are past, to expectations in and and growth we savings office margin it the do also that a track very able our We've to as well. to all base in order we with management making we and normal the base up of can relates strong as project been able have, future the that. in business, expansion. certainly that do obviously, committing the believe we're be to. regular stood sure disciplined to meeting that also, And it

to our like has comes one as $X.X that, defined would said, billion means define what billion just growth you brands as extra than point part I more add extra in been that accelerating building $X.X profit. is and profitability, we which reinvestment And the to the from savings

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Our Lieberman with today Lauren from last question Barclays. comes

I So wanted on. touch X to things

those you excluding prepared think, things The first commented retail organic remarks, that are was but also down X%. mid-singles, just, and up retail the was sales I travel China ex during

markets dynamics you've about explicitly I So the inventory know and why spoken travel was outside that about those large. Asia very I of in just that curious inventory but dynamics was retail, disconnect

was question So that one.

unstructured market the on go-forward just across And Asia. then two was question plan around

So the travelers, and many all in that place. it's been and you've Fabrizio, in how of spoken times currency tends taking market can where all past, with shift about of Hainan. sorts course, and and China know impact to things the But move that regulatory change we there's

your about going what has So you dollar be years. of going a specifically should to or thinking out the over of as lot in size next the do terms on in participation, curious degree forward, we with was are absolute modeling I aren't the retail look several the how travel we to unstructured about business terms thoughts of that regulating market do and

Thanks, Lauren.

expected, the obviously, XX.XX to and pull retailers don't big retailers things quarter, pulled to on in have you with events as the like well we line. So as we and those some second inorganic. especially back of go When and case when the that start events -- I'll the in back bring and shipments on in have back us have those order obviously, retail when have we holiday, for we in

see, related standpoint, course a will the may quarter-to-quarter But year. of to a out that. disconnects you averages there it So from over be some

what other to in any we like Asia have markets all experiencing have for about. we concerned you issues don't travel So been retail in be any

conversion. the is is the around better our on focus market, world. getting better on travelers structured And that travelers and and And

some China have progress apart In cases, the we clear, Double Just world, the that double to of world. in in of digit, an rest market digit be in there situation the area. extraordinary discussed times. every the this is from many

been will Korea this also more and in in also in more direction. has to So the happen which recover China, the and also lowest part in that

-- is focus and So first growing the part of and continuously in the answer the the conversion. travelers improving term continue travelers

conversion the want to data And from tensions of the travel the such say the the seen below been is reducing I have of The reducing. moment regulations, is market, as is but you expectations. also been market of the retailers. improving nicely, has very has governments As the growing the for -- or for structure travelers the very, for

are what And a doing. So we to trend obviously, the is is amount. there this also reduce

a the way travelers the that be will will and improve in reducing will the And so time. gradual as we'll way be market that be us. structural my reducing is In market And you over for reduce a opinion, also expect should as reduced. increase

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

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