Estee Lauder Earnings Call INSIGHTS: Share Gains, Untouched Areas
Nik Modi – UBS: The question is really about share gains. Fabrizio, can you provide any perspective on kind of where you think you’re sourcing your share gains from and what I’m trying to get at is often times the share situation has just looked upon the largest players, which happen to be publicly traded. Can you talk about what’s going on with some of the smaller players and if you’re seeing any benefits from any share gains there?
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Fabrizio Freda – President and CEO: Yes. I think we’re gaining shares depending by country, by channels frankly with different source. We’re also in some channels, we’re gaining share from the smaller players, but there are some channels where frankly we’re getting shares from the big player. Let me give you examples. In the fastest growing channels, like travel retail or online, we are definitely getting share from the big players. On the contrary, in some more traditional channels and in some other areas where we’re growing, but we’re not very big into a market share, yet like specialty doors, in this case, we are taking share also from some more players. So is a mix feature. The other important aspect is that we continue to source business in general from Mass, meaning that as you have seen this is the second consecutive year where in general prestige in several countries around the world is growing faster than the Mass. I believe this is also the result of our strategy and the strategy of some of our big competitor, which is going through continuous improved innovation, continuous improved services in the prestige environment, and stronger advertising of this better product and better services, which is leading more and more consumer to be interested in our space.
Connie Maneaty – BMO Capital Markets: I’m wondering what you still see for retail is the big opportunities for the Company for change after the SMI investments have been made. What parts of the organization do you think still haven’t been touched enough or the future looks different now than it did three years ago?
Fabrizio Freda – President and CEO: There are several areas where we have only scratched the surface of improvement because of lack of systems and lack of the unified way to look at the opportunity across the globe. So first of all, we still can improve dramatically the service level to our retailers that in turn will generate greater sales because we will lose less volume from out of stock and less volume from delays or lack of being able or not being able to deliver and obviously most importantly we will get less returns, as you know with still a significant amount of money, that we use every year to manage returns, destroy products that is very inefficient obviously and we have opportunity to improve. Second area is we can add more responsive supply chain and better cost across our global supply chain and in general across our operations, including the interface between supply chain and product innovation and product development. Third, we can definitely improve our inventory management and bring them to lower levels and in turn get lower obsolescence and lower distractions. We can move our turns from three to two possibly over the years. Fourth, we can improve our indirect procurement, we have done some good progress there, but we have a long way to go. So far, we are already three times our original expectation and frankly I believe there is much more once the systems will allow us to work globally in the correct way. Then we are going to further reduce our points and – points of inventory of warehouses and this will in turn reduce further overtime our distribution cost. We will support also many processes that today are very much people-intensive and so this will continue to allow us to grow improve our productivity. Finally, just in general better availability of information that from my experience can create an even better allocation of resources and since we are spending a lot of money in OpEx as you know, at least allocating this money correctly and generating better return where we still further improve our efficiencies. So, that’s in summary and obviously we have many more details that we are working on and as Rick mentioned the PMT, which is the growth inside the Company, which has driven the delivery of the value of our fractioning, while completing our restructuring is also initiating a very deep and in depth analysis of the next opportunity that I just mentioned.