Estee Lauder Companies Inc gets upgraded by Zacks investment Research

Researches at Zacks Investment Research have upgraded share of Estee Lauder Companies Inc in a research note to investors. Now they have a “neutral” rating and a $100.00 price target on the stock. Estee Lauder Companies Inc. is the known manufacturer and marketer of skin care, make up, and hair care products. Their products are sold in approximately 150 countries. It has the global licensee for fragrances and cosmetics sold under known brand names such as Tommy Hilfiger. Its products are sold in freestanding Company-owned stores, saloons and spas as well. In July 2010, the Company acquired Smashbox Beauty Cosmetics. Shares in Estee Lauder Companies Inc opened at 91.46. Estee Lauder Companies Inc has a 52- week low of $54.17 and a 52-week high of $95.55. The average of the stock’s 50-day moving is about $86.77 and its 200-day moving average is $72.56. Analysts predict that Estee Lauder will post $0.37 EPS next quarter. The company has a market cap of $18.057 billion and a price to earnings ratio of about 29.86.

Safeya

http://www.americanbankingnews.com/2011/02/25/estee-lauder-companies-inc-el-upgraded-by-zacks-investment-research-to-outperform-2/

Human Resources and Leadership

To begin, there is not much data on human resources in this industry, but there are some clear trends that relate to it. Personal and Household products is an international industry, and therefore recent technological and transportation improvements are really helping the industry grow. New advances in technology and transportation will create many jobs within the industry through outlets like telecommunication and the expansion of companies into the global market. As far as organizational structure goes, Proctor and Gamble announced a huge internal reorganization last month. According to the Wall Street Journal, P&G will be combining its three global divisions into two; Beauty and Grooming, and Household Care. This major reorganization will surely have a great effect on the workforce within Proctor and Gamble and throughout the H&P community.

P&G Reorganization

http://online.wsj.com/article/SB10001424052748703445904576117954242388250.html?mod=WSJ_Consumerproducts_leftHeadlines

Investors Want Firms to Come Clean

Due to the recent condition of our economy, investors are putting pressure on the Household Industry to make more price cuts in order to make their products more affordable. On Thursday, chief executives from the industry's top companies will meet in Boca Raton Fl in order for the executives to showcase their new ideas for growth strategies and talk about new products. One important thing to watch out for on Thursday is what plans these industries have in order to cut costs and tighten their belts or even being firings/layoffs. Although many companies are willing to make the necessary sacrifices for the investors, Proctor & Gamble is still resisting large-scale cost cuts or layoffs. It is important to see what will come of this conference on Thursday.

P&G Takes the Lead with LEED

Proctor & Gamble announced that they will be using LEED certification for all of their new sites. The first site which broke ground on February 25, 2011 was the Taicang plant in China. This is the first P&G site pursuing LEED Certification. Keith Harris, P&G global product officer said, "Pursuing LEED certification for all new sites...is the next evolution in our facility eco-design process that will ensure excellence in sustainable design." This is the first step P&G is making towards their long-term sustainability vision. The vision includes powering plants with 100% renewable energy and zero manufacturing waste to landfill. LEED is the United States program for high performance green buildings. In the long run LEED can help save money, water, and energy. This act shows P&G's commitment to CSR and improving the environment for guture generations.

Source:http://www.happi.com/news/2011/02/25/p%2526amp%3bg_looks_to_leed

How do I know which one to buy????

There are some products most people feel they just can’t live without. One of these is toothpaste. But honestly, when there are so many different brands and different kinds of the same product, how on earth are we supposed to know which kind to buy? Shopping for something that should be easy has instead been becoming pretty overwhelming. However, many manufacturers are realizing this and so last year a reported 69 new toothpastes hit stores instead of 102 like in 2007. One well-known company, Proctor & Gamble, which makes the well known brand, Crest reported significantly reducing the number of toothpaste and oral hygiene products that it makes worldwide in the past couple of years. Matt Doyle, the director of global oral-care research and development at this company said “we’ve come to realize that fewer is better.” In addition to companies cutting down the number of products they are creating, stores are also limiting the number of different toothpastes they are selling. Almost everyone in the US uses toothpaste and they use it regularly which has allowed companies to continue upping the price of this product despite the current state of the economy. Companies are also putting more effort into packaging, such as reducing size or making their product more attractive so that customers are more likely to pick their product from the sea of options. In order to remain competitive companies are stepping up their innovation and investing more in trying to make their current products more attractive, rather than overwhelming customers with more new ones. 

Article used:

http://online.wsj.com/article/SB10001424052748703373404576148363319407354.html?mod=WSJ_Consumerproducts_leftHeadlines

L'Oreal acquires Essie nail polish

Essie is the latest nail polish hit in the nail polish world! Essie, a small nail polish company from Astoria, Queens, has hit the big leagues. The company is 29 years old, and sells its products at national drugstores and many retailer shops. Essie has been acquired by cosmetic giant L’Oreal USA. This acquisition is enabling L’Oreal to increase its share in the nail polish market; it has grown significantly year after year. The purchase should be complete within 90 days and is subject to US and international regulatory approvals. Essie has generated $28 million in sales over the last year. L’Oreal USA raked in about $24.7 billion last year. L’Oreal, which owns Maybelline, controls about 9.2% of the nail polish market, competing with Sally Hansen brand, which controls 45%, according to market research firm mintel US. Essie produces more than 300 different colors, has been growing and selling in more than 250,000 salons in 101 counties. US sales of nail polish were about $238 million in 2008, up 5.8% over the previous year. The firm believes that their sales in the category will increase only 0.4% to $239 million at the end of this year.

http://www.crainsnewyork.com/article/20100421/SMALLBIZ/100429960#

Safeya

Barry M. cosmetics

I have always found it interesting to see what companies and brand names have a lot of success in certain countries, but are completely unknown in others. I am familiar with alot of products and services that I would consider world class that are completely heard of in the US, because I am originally from the UK. One such company is Barry M. cosmetics. Barry M. is a cosmetics range that is distributed through pharmacies (like CVS) in the UK. It has been present in the UK since 1982 and has since become one of the UK's best known makeup brands. The range and quality of their products is incredible, and I would actually consider them to be on the same level, if not higher than MAC. But no one in this country has heard of them because they do not have a presence outside of the UK. I firmly believe that within the next couple of years, Barry M. will be a presence in the US as well as several other countries throughout the world.

Barry M. site
http://www.barrym.com/

Despite a profit decrease, Reckitt remains a top competitor

If you were to begin talking about the company Reckitt Benckiser PLC, not many people would know what you were talking about. However, if you mention brands such as Air Wick, Veet, Lysol and Clearisil, people have usually heard of these. Reckitt Benckiser PLC is a household goods and personal products company based in Slough, United Kingdom. The company was founded in 1814, currently operates out of more than 60 countries and sells products in over 180. Despite having many different products out on the market that appeal to many different people, last week the company reported having an 8% decline in profit. According to company representatives this is likely due to the status of the economy. It is also likely that because of a slow global economy and growing cost pressures, the company will see little growth in its earnings this year. Chief Executive Bart Becht said “It is a two-world picture. Europe and North America are not doing well, while developing markets are doing well.” However, despite these current profit declines and the stagnant economy, the company still expects to see sales rising in the future. For many years now Reckitt has been at the top of the industry in terms of market capitalization, so they face a lot of competition from other companies. Recently, there have been increases in commodity prices such as oil, palm oil and plastics, which are all big components of many of Reckitt’s products. These rising costs are a challenge for all the companies in this industry because without raw materials, you have no product.  Still, it doesn’t seem like the company will suffer too much as it remains listed as one of the top companies in the industry in many reports. Furthermore, to help with these decreasing profits, Reckitt remains on the look out for possible acquisitions in emerging markets but hasn’t made anything public about any possible ones at the moment. Having so many different products, created by so many trusted names will definitely keep this company afloat and in competition for that so desired spot as the number one country in the industry. 

Sources:

http://online.wsj.com/article/SB10001424052748704858404576134230786079352.html?mod=WSJ_Consumerproducts_leftHeadlines

http://biz.yahoo.com/ic/323.html

L'Oréal: Is it Still Worth it?

L'Oréal, the makeup company that makes Maybelline Mascaras and Lancome face creams rose in the markets by 5.6% but that doesn't seem to be enough for the companies investors. They fear it is impossible for the company to improve on last years this year. In order to combat this fear they are going deeper into the mass-market cosmetic industry by taking share in hair care products in attempts to combat P&G's Pantene. The company also secured a position in the Chinese cosmetic market. One of the main problems is that the company seems to have a difficult time competing against other cosmetic companies. Other Luxury companies trade on average 15 times that of L'Oreal. If L'Oreal wants to stay a major competitor in the market they are going to have to offer more promotions. But with advertising costs raising, investors are beginning to think that it may not be worth it anymore.

http://online.wsj.com/article/SB10001424052748703786804576138263444535044.html?mod=WSJ_Consumerproducts_leftHeadlines

Tide's Advantages

Most household companies never have to deal with the problem of demand. Their products will always be in demand by their consumers because they are part of our everyday life. One example of how household companies tailor their advertisement in order to obtain a higher demand would be Tide. Tide does great commercials where they show the consumer's (most of the time a mother) kids running around doing sports like soccer or baseball where their uniforms get dirty. They then show us how Tide cleans stains better than the leading brand. By doing this Tide shows their superiority over the competition and ultimately gaining the consumers trust in their product. with an end result in a higher demand for Tide. And with a higher demand for their product more supply will come.

Colgate-Palmolive Co.'s profit sales slip

The world’s largest toothpaste maker Colgate-Palmolive Co.’s has reported declining in its sales due to the harsh competition. It’s fourth-quarter earnings slipped 1.1%. The company uses a costly amount of money for higher materials, and got a lower than expected revenue. Colgate reported a profit of $624 million from usually getting $631 million. The gross profit margin shrunk from 59.5% to 59.1% due to higher material costs, negative foreign exchange effects and increased promotional investments. Colgate’s biggest market by sales is in Latin America, but its profits have dropped 7.5%, and in North America sales have dropped 2%. Looks like this is not a good year for Colgate-Palmolive Co. Colgate is well recognized all around the world and is often what people usually buy. But because other toothpaste brands are cheaper and just as good people have stopped buying Colgate toothpaste.

http://online.wsj.com/article/SB10001424052748704268104576107810159628214.html

Economics of the HPP industry

One of the best things about this industry is that it can range from small shops to multinational corporations. It includes the small soap shop on the back streets of Prague and the Christian Dior store down the street from the Arc de Triomphe. And no matter how successful or prestigious these businesses get they all function under the same economic factors.
Household and Personal products work the same way as any basic business. They produce a product and then sell that product at a local store or online. Most sales for this Industry Occur outside the US, and so these businesses make the most of their money by (if centered in the US) expanding to the Global Market and even by franchising. Also, the industry consists of many different types of products. Lets use a skin care store as an example. This store may sell something like bath bubbles and body lotion. If there is suddenly a decrease in demand for bath bubbles, it does not kill the business because the decrease in demand for bath bubbles does not mean there is a decrease in demand for body lotion.
The costs of the Industry are generally the same no matter what kind of business there is. Money needs to go into the raw and packaging materials (that are not significantly detrimental to the safety of its customers), shipping, labour, ect. Revenue growth, it seems, comes more from expanding geographic reach than more units sold. There is always going to be demand for laundry detergent and household cleansers, and even make up. But depending on where the business is operating from there will be more demand in some areas of the country, and even the world than there will be in others. For example, Elizabeth Arden, the beauty products company, saw a 3.1% net sales increase this quarter, despite the economic recession. This was due, according to the attached article, to a sales increase outside of the US. So it appears functioning outside of the US is one of the best ways to increase sales for Household and Beauty products companies.
Experts foresee a decline in demand for the household and personal products industry. The economic recession as well as rising energy prices and the bad housing market mean that consumers have less disposable income, and therefore the demand for personal products will decrease. There is also a rising cost in raw materials and packaging materials for this industry, which will cause the supply to decrease as well.

Elizabeth Arden
http://www.happi.com/news/2011/02/04/sales_up_at_elizabeth_arden

General Reference
byuibc.org/files/30-30%20Household%20and%20Personal%20Products.doc

Proctor and Gamble Reorganizing for the Better!

P&G a company we all know and love has announced a reorganization on Tuesday. Proctor and Gamble is splitting into two divisions after their well being unit vice Chairman of the company plans to retire. What remains of the global company is the beauty and grooming division and the household care division. All of the divisons are now being evenly split and run by newly appointed vice chairmans. Im sure these new divisions can only make a great company we love and trust even better. Only time will tell how the Global company will proceed or if it will affect the market in anyway shape or form.

http://online.wsj.com/article/SB10001424052748703445904576117954242388250.html?mod=WSJ_Consumerproducts_leftHeadlines

Big Profit Increases for Estee Lauder

The cosmetics company Estee Lauder recently reported that its second quarter profit was boosted by 34% thanks to holiday shoppers and a weaker dollar. The company now has a better outlook for the coming year and a higher share-price as a result. Estee Lauder has been around since 1946 when Joseph and his wife Estee began producing different cosmetic products in New York City. The company has since expanded to include businesses in Europe, the Middle East, Africa and China. Because of the current high level of unemployment in the US, chief executive Fabrizio Freda doesn’t see the high profit being sustainable. However, for the time being the company is greatly enjoying the increased revenue. They recently developed new products such as Clinique’s dark spot corrector and thanks to luxury consumers saw an 11% rise in local currencies. To make other profit, Estee Lauder gained shares in department and speciality stores which helped raise their shares to $91.80, up 14% in the NY Stock Exchange. In addition to doing well in the U.S., the company’s international businesses have also experienced large sales increases in the past quarter. Due to China’s booming economy and emerging middle class women who are seeking more makeup products, Estee Lauder sales rose 29%. Revenue growth also results from the company having many products to sell. Estee Lauder owns Clinique, Origins and Smashbox. In terms of economics, the company did have to shell out some money for restructuring charges but demand has been increasing and so sales continue to rise. It seems there is a high demand in the skin care business, followed by makeup and small fragrances. Estee Lauder’s slogan is “bringing the best to everyone we touch” and people are clearly realizing the quality of this company’s products. Even though most of their products are high end and a bit more expensive, consumers are still purchasing them because they want high quality. Estee Lauder may have been around for a while but that doesn’t mean it’s losing any ground whatsoever. It definitely seems like this a company worth investing in.

See the article:

http://online.wsj.com/article/SB10001424052748703652104576122230192422522.html?mod=WSJ_Consumerproducts_leftHeadlines