Estee Lauder Cos., Inc. - Ordinary Shares - Class A

Sales Performance and Outlook: The company reported a 9% organic sales decline in Q3 FY2025, with better-than-expected earnings per share (EPS) of $0.65, down 33% from the previous year. For FY2025, the company anticipates total organic net sales to decline between 8% to 9%, driven by challenges particularly in the travel retail segment, which is expected to see a steeper decline in Q4 compared to 28% in Q3.

Market Share Gains: Notably, the company reported market share gains in key markets, including the U.S., China, and Japan, which are vital for future growth. This marks a significant turnaround, with Clinique gaining share for 11 consecutive months in the U.S. and La Mer and Estée Lauder doing well in China. These gains indicate positive momentum despite overall revenue declines.

Gross Margin Expansion: There was a gross margin expansion of 310 basis points year-over-year, driven by operational efficiencies and pricing strategies under the Profit Recovery and Growth Plan (PRGP). The company expects gross margin to reach approximately 73.5% for FY2025, highlighting a focus on improving profitability, which may also help mitigate the impacts of ongoing tariff challenges.