Value Investor Daily #46

And we've done an awful lot in North America, over the last couple of years to really expand our distribution to areas that represented faster growth in terms of distribution expansion. And that culminated in towards the end of the year, launching Clinique and a couple of other brands on the Amazon platform.

What we're seeing in the U.S. is increasingly faster growth in specialty multi-channels like Ulta and Sephora and Ulta inside Target and Sephora inside Kohl's. Online is a very fast-growth channel and that includes Amazon now that they've stood up their prestige beauty platform, which we are participating on.

And the other thing that we're focused on is we look at what benefits consumers are looking for and what categories consumers are most interested in, in the US. Derma is a category that is -- really has been a category that Clinique basically launched first in terms of their positioning. They developed a lot of their initial products with dermatologists. So, they are the OG, if you will, of derma brands and had lost that positioning a bit. And so, recaptured that positioning and Clinique is doing that not only for skin care, but also having some success in terms of their makeup in North America.

So, we talked about a couple of weeks ago our strategy reset. And it's really the reset for global, but certainly has implications in North America as well. And that's really reigniting skin care. And so, in particular, in North America, I would say we have focused more on makeup and fragrance and a bit less on skin care. Estée Lauder has opportunities in North America. The Ordinary is doing incredibly well in North America. Clinique, now that we've expanded the distribution on Amazon and repositioned it, is starting to gain a bit of share in skin care in North America as well. And so, we're very much focused on that opportunity in North America, with the right channels of distribution and the right positioning.

The PRGP enables and accelerates these strategic priorities and is the foundation to restore sustainable long-term organic sales growth and to rebuild our operating profitability. We are also creating a faster and leaner organization that will more quickly adapt to market dynamics and be better able to leverage future growth. While our sales and profit outlook for fiscal year 2025 is disappointing, this year we will make important strides as we implement our strategy reset to continue rebalancing regional growth, deliver improved annual profitability, strengthen go-to-market and innovation capabilities to elevate our execution in response to a more competitive market. These efforts will position us to both outperform the prestige beauty industry in fiscal year 2026 and accelerate profitability expansion.