Kristen Adams Erika Espinoza Freshtah Hamidi Latisha Jones

Company Overview Bringing the Best to Everyone We Touch and Being the Best in Everything We Do Mission The global leader in prestige beauty: a well-diversified, brand- building powerhouse of unrivaled creativity and innovation. Vision

Company Overview: Products/Brands SkincareMakeupFragranceHaircare

Company Overview: We are committed to… Enhance our reputation of image, style and prestige. Pursue profit, but never at the expense of quality, service or reputation. Provide customers with innovative cosmetic products of the highest quality Create an environment that fosters personal growth and well-being. Deliver outstanding service by treating each individual as we ourselves would like to be treated.

Company Overview: 2012 Net Sales

Liquidity Ratios LiquidityEstee Lauder L'OrealCompetitor Comparison Current ratio Better Acid Test Ratio Better Average collection period Better Accounts Receivable Turnover Better Inventory turnover Worse Overall, in comparison to Loreal, The Estee Lauder Companies Inc. is in better shape of turning its assets into cash in a more timely manner.

Asset Management Ratios Asset ManagementEstee Lauder L'OrealCompetitor Comparison Total asset turnover Better Fixed asset turnover Better Estee Lauder is more effective in utilizing its assets to generate sales in comparison to its top competitor. This is shown with higher turnover ratios.

Capital Structure Ratios Capital StructureEstee Lauder L'OrealCompetitor Comparison Debt Ratio58.5%34.3%Worse Times Interest Earned With a higher debt ratio, Estee Lauder appears less appealing to shareholders due to its dependence on borrowing funds to finance its assets. There is a substantial difference when compared to its top competitor, L'Oreal.

Profitability Ratios ProfitabilityEstee Lauder L'OrealCompetitor Comparison Gross Profit Margin79.5%71.3%Better Operating Profit margin13.0%17.1%Worse Net Profit Margin8.8%12.0%Worse Operating Return on Assets19.1%12.9%Better Return on Equity31.4%13.8%Better Overall, Estee Lauder is in better shape than L'Oreal. With a higher gross profit margin, Estee Lauder's ability to control its expenses is better. Estee Lauder's operating profit margin and net profit margin are not as competitive, meaning its expenses are high in comparison to its sales. Estee Lauder has a better operating return on assets, meaning that it earned more net operating income per dollar of investment in assets. Estee Lauder has a much better return on equity, showing its cost control. This ratio makes Estee Lauder more appealing to stockholders as it shows their investments pay off.

Strategy In 2009, Estee Lauder officially initiated its long term strategy. “We continue to focus on fewer but more impactful products and an increasing number geared to local consumers in specific markets.” - Fabrizio Freda, CEO, President, & Director

Strategy The strategy includes a variety of different activities and sub-strategies that helped increase sales and revenues throughout the past four quarters. – Pull-push marketing – Put efforts in offering best in class, high-class point of sale services both in person and online to increase customer satisfaction. – Expand all branches globally Estee Lauder was able to achieve success in all the strategies listed above while reducing costs of their products.

The Industry Growth of the Anti- Aging segment in the beauty industry The use of celebrities in ad campaigns Magazine and television ad- space for beauty companies have been increasing tremendously

The Competitors L'Oreal Avon Products Revlon Elizabeth Arden Bare Escentuals

External Factors Currency Fluctuation – 57% of sales revenues come from markets that are outside of the U.S. – Sales performances fluctuate as the value of the U.S. dollar fluctuates. The emergence of new competitors The state of the worldwide economy