PresentationUnknown Analyst Good morning. It's my pleasure to welcome L'Oreal back to CAGNY. L'Oreal has one of the leading brand portfolios in global beauty, covering all facets of beauty, including color cosmetics, skin, hair and fragrance operating across the luxury, mass, dermatology and professional channels. L'Oreal operates 40 global brands, which are sold in 150 countries, generating EUR 44 billion in sales. In 2025, the company delivered strong financial performance despite the volatile environmen ...

Core Insights - L'Oréal is focusing on innovation in skin care and aims to bridge health and beauty, with a strong emphasis on longevity science as a growth opportunity [1][6][20] - The company's skin care segment, despite being its largest category at 16.4 billion euros, showed minimal growth of 0.4% year-on-year, contrasting with stronger growth in makeup and hair care [2][5] - E-commerce has become a significant growth driver for L'Oréal, with sales reaching 13 billion euros, accounting for over 30% of total group sales, marking a substantial increase from previous years [9][11] Skin Care Performance - Skin care sales were flat in 2025, which is a concern for L'Oréal as it represents a major category [2] - The company is adjusting its strategies to enhance performance in skin care, particularly through innovation and media engagement [1][5] Regional Performance - North Asia's sales declined by 5% on a reported basis, despite a slight gain in like-for-like terms [4] - The travel retail market in Asia has been soft, particularly in Korea and mainland China, impacting overall sales [3][5] Strategic Partnerships and Acquisitions - L'Oréal announced a strategic partnership with Kering, acquiring the House of Creed and gaining exclusive licenses for Gucci, Bottega Veneta, and Balenciaga, valued at 4 billion euros [12][13] - The acquisition of a larger stake in Galderma will enhance L'Oréal's involvement in dermatology and aesthetics, allowing for better integration of strategies [18][19] Future Growth Opportunities - The company sees significant potential in the longevity market, with plans to introduce supplements and advanced beauty protocols [7][20] - L'Oréal aims to reach 2 billion consumers in the next decade, driven by trends in emerging markets and changing consumer behaviors [21]

Core Insights - Estée Lauder Companies experienced a significant drop in share price, falling over 20% intra-day due to quarterly results and tariff concerns [1] - The company reported second-quarter earnings per share of $0.89, exceeding analyst expectations of $0.83, and a 43% increase from the previous year [1] - Revenue for the quarter rose 6% year over year to $4.23 billion, slightly above the consensus estimate of $4.22 billion [1] Sales Performance - Net sales in skin care and fragrance increased by 6%, while hair care returned to growth with a 5% increase [2] - Makeup sales declined by 1%, primarily due to weakness in the Estée Lauder brand, although MAC showed strength [2] - Mainland China exhibited strong performance with 13% organic sales growth, while Europe, the UK, the Middle East, and Africa posted 2% organic growth; the Americas reported flat organic sales [2] Profitability Outlook - Despite raising its full-year outlook, Estée Lauder warned that tariff-related pressures would reduce fiscal 2026 profitability by approximately $100 million, mainly in the second half of the year [3] - The company highlighted tariffs, including a 39% rate on Swiss imports and a 35% rate on Canadian imports into the U.S. [3] - Reported and adjusted gross margin expanded by 40 basis points to 76.5%, benefiting from the Profit Recovery and Growth Plan, although offset by tariffs, inflation, and changes in product mix [4] Future Projections - Estée Lauder raised its fiscal 2026 outlook, now expecting organic net sales growth of 1% to 3% and adjusted earnings per share of $2.05 to $2.25 [4]

Core Viewpoint - Estée Lauder Companies Inc experienced a nearly 22% drop in share price due to mixed signals on growth and profit pressures, despite a solid quarterly performance and an increased earnings forecast for the year [1]. Financial Performance - Q2 revenue reached $4.23 billion, slightly surpassing analysts' expectations of $4.22 billion, with adjusted earnings per share (EPS) of $0.89, exceeding forecasts of $0.83 [2]. - Organic sales grew by 4% year-on-year, an acceleration from a 3% increase in Q1, driven by a 13% surge in Mainland China [2]. Strategic Initiatives - The Profit Recovery and Growth Plan (PRGP) contributed to a 290 basis point increase in adjusted operating margin to 14.4%, helping to mitigate some tariff pressures [3]. - Management reported progress in cost-cutting, workforce reductions, and operational improvements, indicating that the most severe inventory and travel retail volatility is behind them [3]. Future Outlook - For fiscal 2026, the company expects adjusted EPS between $2.05 and $2.25, slightly below the Street consensus of $2.19 [4]. - Projected organic net sales growth is anticipated to be between 1% and 3%, with modest growth expected in Mainland China and flat performance in the Americas [4]. - Tariff-related costs are projected to reduce operating profit by approximately $100 million [4]. Segment Performance - Skincare led sales with $2.05 billion, a 7% year-on-year increase, followed by fragrance at $812 million (+9%), makeup at $1.16 billion (+1%), and hair care at $168 million (+6%) [5]. - Geographically, sales contributions were $1.22 billion from the Americas, $1.18 billion from Europe/Kem, $900 million from Asia/Pacific, and $928 million from Mainland China [5]. Market Reactions - Jefferies noted that while Q2 sales and EPS exceeded expectations, the full-year EPS guidance fell short of Street models, indicating investor caution [6]. - Investors are expected to focus on commentary regarding travel retail consumption in Asia, operating margin levers, cash flow allocation, and ongoing innovation initiatives across Estée Lauder's brands [6].

Core Insights - Ulta Beauty exceeded Wall Street forecasts in Q3, reporting net sales of $2.9 billion, a 12.9% increase, driven by fragrance, K-beauty, and international expansion [1][2] - The company anticipates full-year 2025 net sales of approximately $12.3 billion, up from the previous estimate of $12 billion to $12.1 billion [2] Sales Performance - Net income for the third quarter was $230.9 million, down from $242.2 million year-over-year, while diluted earnings per share remained flat at $5.14, surpassing analysts' expectations of $4.61 [2] - Fragrance was the strongest growing category with double-digit comparable sales growth, supported by new brand launches [4] - Skin care achieved high-single-digit comparable sales growth, bolstered by K-beauty and an expanded wellness assortment [5] - Makeup saw midsingle-digit comparable sales growth, while hair care also rose by midsingle digits, although personal styling tools faced sales declines due to tariff-related pressures [6] Strategic Initiatives - The company is executing its "Ulta Beauty Unleashed Strategy," focusing on new product assortments, improved in-store and digital experiences, and bold marketing efforts [3] - Ulta initiated its first international expansion by opening seven stores in Mexico and a store in Kuwait through franchise partnerships [7]

Core Insights - Ulta Beauty, Inc. is recognized as one of the best-performing retail stocks in 2025, with UBS reaffirming a Buy rating and a price target of $680 due to strong third-quarter results and consistent demand in the beauty category [1] - The company is expected to benefit from a more rational competitive environment, particularly with reduced rivalry from Sephora, which could enhance comparable sales by 100-200 basis points in 2026 [2] - Ulta Beauty is expanding its international presence with the launch of its first Middle Eastern store in Kuwait, in collaboration with Alshaya Group, featuring over 300 beauty and wellness products [3] Company Overview - Ulta Beauty, Inc. operates as a specialty beauty retailer in the U.S., with more than 1,445 retail stores across 50 states, offering a wide range of skincare, hair care, cosmetics, perfumes, and salon services [4]

Financial Data and Key Metrics Changes - Organic sales for fiscal year 2025 grew by 2% and core earnings per share increased by 4% on a currency-neutral basis [20][22] - Adjusted free cash flow productivity was reported at 87% [20] - The company has achieved 39 consecutive quarters of top-line growth and nine consecutive years of core earnings per share growth [20] Business Line Data and Key Metrics Changes - Nine out of ten product categories experienced organic sales growth, with Family Care and Personal Health Care growing mid-single digits, while Baby Care saw a decline in low single digits [20] - E-commerce sales increased by 12%, now representing 19% of total company sales [21] Market Data and Key Metrics Changes - Focus markets grew by 2%, with North America and Europe focus markets up by 2% and 3% respectively [21] - Enterprise markets also grew by 2%, led by a 4% organic sales growth in Latin America [21] Company Strategy and Development Direction - The company is focused on an integrated growth strategy that emphasizes performance across product, package, brand communication, and retail execution [23][24] - The strategy is dynamic, allowing the company to adapt to changing consumer needs and competitive environments while maintaining strong results [24] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenges posed by a volatile economic and geopolitical environment but remains confident in the company's strategy and ability to drive market growth [23][25] - The company is committed to increasing investment in its strategy to achieve growth and value creation objectives [24] Other Important Information - The Board of Directors declared a quarterly dividend of $1.0568 per share, marking the 69th consecutive annual dividend increase [19][22] - A shareholder proposal regarding flexible plastic packaging was presented but ultimately voted against by the Board [18][26] Q&A Session Summary Question: Has the company considered a stock split? - The company does not foresee splitting the stock as it believes growth in stock price reflects underlying business performance [27][28] Question: Do you plan to continue the virtual format for future annual meetings? - The virtual format allows for broader participation and is considered efficient [29] Question: How does the company view efforts to advance environmental sustainability? - Environmental sustainability is a foundational component of the company's strategy, with significant progress made in reducing waste and emissions [30][31] Question: What is P&G's approach to equality and inclusion? - The company believes that equality and inclusion enhance its ability to serve consumers and drive market growth [32] Question: What factors influence P&G's presence in markets with geopolitical conflicts? - The company prioritizes the health and safety of its employees and the availability of essential products in affected regions [34][35] Question: How does P&G's executive bonus program align with standard management bonus programs? - The company emphasizes pay for performance and long-term success across its compensation programs [36] Question: How does the company approach capital allocation? - The company prioritizes funding the business, paying dividends, considering strategic acquisitions, and returning cash to shareholders [37] Question: How is P&G remaining committed to growth in emerging markets? - Emerging markets represent about 20% of the company's business, and growth will be pursued responsibly [38] Question: How is the company navigating macroeconomic pressures? - The company focuses on delivering superior propositions to consumers while managing cost pressures through productivity programs [40] Question: How does the company ensure its products are better than competitors? - The company concentrates on performance across various aspects, including product quality and market execution [41] Question: How does P&G stay in touch with consumer and market trends? - The company relies on direct consumer feedback and external thought leaders to stay relevant [42]

Group 1 - Kenvue Inc. (NYSE:KVUE) is considered one of the most oversold large-cap stocks in 2025, with Barclays lowering its price target from $20 to $17 while maintaining an Equal Weight rating [1] - The company operates in the consumer health sector through three segments: Skin Health and Beauty, Self Care, and Essential Health [2] - The Skin Health and Beauty segment includes various product categories such as hair care, body care, and face care, with a global presence in over 165 countries [3] Group 2 - The firm has adjusted its growth models to reflect "muted and decelerating" growth in certain areas of the personal care domain since the Q2 reports [2] - There is a belief that certain AI stocks may offer greater upside potential and carry less downside risk compared to Kenvue [4]

Cosmetics manufacturer Intercos is working on at least one US acquisition to expand its skin and hair care business https://t.co/wNzGtsNscd ...