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10 May

Estée Lauder Cos. Backs Group CEO, Leadership Team in

NEW YORK — The Estée Lauder Cos. board of directors and Lauder family has strongly backed group president and chief executive officer Fabrizio Freda and the corporate’s leadership team in an internal memo sent to employees Tuesday, which was obtained by WWD.

In a move to quell any concern produced by a recent report that the Estée Lauder Cos. could soon face pressure from a billionaire activist investor, William Lauder, the Estée Lauder Cos. executive chairman, wrote the memo on behalf of the board and his family.

As previously reported, on Sunday The Recent York Post published an article saying that Nelson Peltz is considering making Lauder his next activist play after the Walt Disney Co., including potentially pushing a sale of the group and ousting Freda.

That set off a flurry of media speculation.

“As a family-controlled company, and with our approach to ‘patient capital,’ we’re guided by our long-term vision and strategy, the best way now we have been for over 75 years, and won’t be deterred by outside noise,” wrote William Lauder.

“We’re united in our appreciation for, and support of, our president and CEO, Fabrizio Freda, and the broader leadership team as they lead this company, and our powerful portfolio of brands, into the long run,” he continued. “Under Fabrizio’s leadership, the corporate is executing a successful long-term technique to drive our business. Fabrizio and our management team, just like the Lauder family, proceed to be focused on the most effective interest of our employees, customers and stockholders, to deliver long-term value.

“Guided by our talented leaders, our sound strategy and above all, your incredible commitment and dedication, now we have clarity of focus and the proven ability to executive and deliver into the long run,” wrote Lauder.

“Together, we are going to proceed to concentrate on the facility of possibilities to deliver upon the exciting promise of prestige beauty for our consumers,” he continued.

Lauder wrote that since his grandmother, Estée Lauder, began the corporate in 1946, the group has believed in respect for the person, integrity, generosity of spirit and entrepreneurship, with the group’s employees at the guts of those beliefs.

He also prolonged gratitude to the corporate’s employees.

“It’s inspiring to witness the creativity, spirit of innovation and sense of collaboration that you just bring with you to work every day,” wrote Lauder.

The Lauder family holds around 84 percent of voting control and 4 of the 17 board seats on the Estée Lauder Cos. No filings have been made through the SEC showing Peltz has bought stock, meaning that if he has any, it will be lower than 5 percent.

The speculation regarding Peltz got here after last week the Estée Lauder Cos. once more cut its full-year forecasts for each the highest and bottom lines, as a result of a slower-than-expected recovery in travel retail in Asia, causing the corporate’s share price to tumble around 18 percent to $202.70 that day.

Lauder’s overall net sales for the complete 12 months at the moment are forecasted to diminish between 10 percent and 12 percent, greater than the previously expected 5 percent to 7 percent drop. Adjusted diluted earnings per common share are anticipated to slip between 50 percent and 51 percent, compared with the previous forecast for a 27 percent to 29 percent decline.

While there had been speculation that Freda, who has been in the highest job for near 14 years, might retire, he stressed at a banking conference last 12 months that he’s “completely committed to proceed leading this company for the foreseeable future.”

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