European cosmetics giant Estée Lauder is witnessing a significant shift in its leadership structure. For the first time in its 75-year history, no family members will be involved in the company's daily management. This change comes at a challenging time for the company, as it confronts its worst outlook in many years.
The company recently revised its performance expectations for the remainder of the fiscal year, causing its U.S.-listed shares to experience the largest drop ever. This adjustment is attributed to growing uncertainties in its China business and the upcoming appointment of a new CEO, slated for January.
Over the past two years, Estée Lauder has frequently lowered its performance forecasts, leading Wall Street to question the management's understanding of its own operations.
Earlier this week, Jane Lauder and William Lauder, two members of the founding family, announced that they would step down from their current positions to focus on their roles on the board. Jane Lauder is stepping down from her role as Chief Data Officer, emphasizing her commitment as a board member and shareholder. William Lauder is resigning as Executive Chairman to concentrate on board responsibilities. Both have held their roles since 2009.
William Lauder remarked that the family's evolving involvement in daily management reflects a desire to focus more on the company's overall strategic direction. Jane and William are two of the 15 board members at Estée Lauder.
Over the past two years, Estée Lauder's stock (EL, Financial) has fallen by 66%, closing at $68.21, a steep decline from around $200 in 2022.
