Estee Lauder Companies Inc. (NYSE: EL) has been at the forefront of health, beauty and wellness for more than 50 years. Analysts at Ernst & Young released the 2018 edition report on the luxury and cosmetics sector, indicating that Estee Lauder’s sales growth was ranked fourth on a global list of highest sales growth among cosmetic companies from 2014 through 2017.

The compound annual growth rate (CAGR) for the company was 6.9%. The company’s success is due largely to a strong and efficient business model and focuses on long-term growth. 

Estee Lauder has also placed a growing emphasis on cultivating relationships and sales in emerging markets. The company designs strategic marketing campaigns to boost sales in emerging-market economies, targeting affluent populations in such markets. Key emerging countries where the majority of the company's focus lies include Mexico, Russia, and China.

Estee Lauder's portfolio of companies offers a mix of high-end luxury brands like La Mer to more affordable skincare products, like Clinique.

Estee Lauder has a massive portfolio of brands and a variety of companies and subsidiaries under its ownership. All of these companies are responsible for boosting Estee Lauder’s profit, and they add diversity and overall value to the company’s securities.

Clinique

Clinique is one of Estee Lauder’s most successful and profitable subsidiaries. The company was founded in 1968 and offered the first-ever brand of upscale cosmetics created by a dermatologist. Its goal was to offer consumers high-quality beauty with health and wellness in mind.

Clinique has developed an approach to cosmetics that is customized for various types of skin and features, and innovative products that make it a leader among global skincare authorities.

Clinique products are sold in more than 100 countries and generate millions of dollars in revenue each year for its parent company.

Key Takeaways

  • Estee Lauder was founded in 1946 and continues to be a leading beauty and skincare company.
  • Estee Lauder owns a large portfolio of both luxury and affordable brands and a variety of companies and subsidiaries.
  • Some of Estee Lauder's most popular subsidiaries are Clinique, La Mer, and Bobby Brown cosmetics.
  • La Mer is one of Estee Lauder's most profitable brands.

Bobbi Brown Cosmetics

Bobbi Brown Cosmetics, another subsidiary of Estee Lauder, is an exclusively priced line of beauty products developed by Bobbi Brown, a world-renowned makeup artist. Estee Lauder acquired Bobbi Brown Cosmetics in 1995, just four years after it's founding in 1991. Since then, the line of products has boomed in popularity. Bobbi Brown products can be found in 80+ countries and territories at specially selected retailers. The goal of this line, according to Bobbi Brown, was to offer prestigious beauty products to clients around the world. The price of these cosmetics makes them available to a very specific clientele. 

La Mer

La Mer joined Estee Lauder in 1995 and has since then become one of Estee Lauder's most coveted and profitable skincare brands in the world. Miracle broth, the key component of the brand's star product: Crème de La Mer, was first discovered by Dr. Max Huber, an aerospace physicist, after a healing request from a lab accident in the 1950s.

MAC Cosmetics

Known around the world for its professional quality of cosmetic products, Mac Cosmetics branded as M•A•C was developed in Canada in 1984. Estee Lauder's acquisition of the company in 1998 was a strategic move to add a line of makeup products that would be suitable for makeup artists as well as standard clients.

Makeup artists endorsed the company's products through word of mouth, sharing the line with clients, photographers, and models, and M•A•C has become one of the most popular and well-known professional makeup brands available. The company's products are now sold in more than 80 countries around the world. M•A•C added to Estee Lauder's bottom line and has expanded the parent company's social and consumer network.

Tom Ford Beauty

Tom Ford Beauty was developed, in concert with Estee Lauder experts, by Tom Ford, a leading beauty and fashion designer and expert. Tom Ford's line includes a collection of fragrances and cosmetics, all designed to complement the vision of his fashion line. Ford's line emphasizes craftsmanship, modernity, and quality. The product prices in this line make it another exclusive brand sold to a high-brow clientele.