Estee Lauder cuts some prices despite the continued tariff toll

[NEW YORK] Estee Lauder is lowering prices on some items to boost sales, an unusual move at a time when many US consumer companies are raising prices to offset higher tariff costs.

Estee Lauder is “decreasing prices in some geographies and some products to be able to capture more demand”, chief executive officer Stephane de La Faverie said on Wednesday (Aug 20). “The minute we do it, a lot more consumers are gravitating toward” the lower-priced products, he added.

The company says that it has decreased prices on Clinque’s Dramatically Different Moisturizing Lotion in Europe, the Middle East and Africa; MAC’s Studio Fix foundations in the US and other MAC products in India, for example.

The cuts are not across the board and the company will “increase price to offset tariffs where we have pricing power”, de La Faverie said. The company expects overall prices in the current fiscal year, which ends next June, to increase by a low-single-digit percentage, in line with its average annual increases in recent years, he said.

Estee Lauder said that it expects an approximately US$100 million hit to profitability due to rising US tariffs in its current fiscal year. That figure already takes into account steps the company has taken to begin to reduce the impact, like by shifting where it manufactures products.

“My intention is to continue to mitigate some of the US$100 million,” de la Faverie said.

Estee Lauder, also the owner of the Tom Ford and La Mer brands, reported a sales decline of 8 per cent in the fiscal year that just ended versus the prior one, and executives are looking for ways to boost demand and volume.

In contrast, other US companies are stepping up price hikes. Procter & Gamble said recently that it’s increasing prices of products in the US and Canada. BLOOMBERG