Estee Lauder's Sitting Pretty
Leadership in the prestige beauty category gives it a wide economic moat.
In our view, Estee Lauder’s (EL) enviable portfolio of high-end beauty brands--including Clinique, Mac, Bobbi Brown, and Aveda, in addition to its namesake--has helped the company carve out a wide economic moat and defend its leading position in the prestige beauty category, where we estimate it enjoys 15% global share.
We think premium positioning has allowed Estee Lauder to develop durable brand intangible assets. Investments in advertising, promotion, and research and development (in aggregate, averaging 25% of sales over the past decade) further support the company’s retail relationships. We believe this spending will enable Estee Lauder to keep its brand equity intact as it expands its presence across a variety of channels and geographies in the high-end cosmetics category.
Sonia Vora does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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