Renowned UK fund manager Terry Smith has made a strategic move, divesting his stake in Estée Lauder Cos. while maintaining his investment in L’Oréal SA. Smith pointed to Estée Lauder’s handling of the reopening of China’s market and its supply chain challenges as key factors behind the decision to sell.
Estée Lauder, recognized for brands such as Clinique and Aveda, has encountered a decline in market share in the United States and has revised its annual outlook downward for three consecutive quarters. The company’s shares have witnessed a nearly 50% decrease in the last year.
In contrast, L’Oréal has demonstrated resilience and growth, with its shares gaining over 20% in the same period. L’Oréal’s success is attributed to revenue growth, particularly through its budget-friendly brands, and the strategic acquisition of Aesop, contributing significantly to its dominant position in the market. Smith’s decision to maintain his holding in L’Oréal underscores the company’s positive performance amidst challenging market conditions.
