Consumer pullback around the world is leading Estée Lauder to cut thousands of jobs.
The beauty brand released earnings Tuesday (Feb. 4) showing declining or flat sales in its markets around the globe, especially in Asia, where sales fell by double digits.
Speaking to analysts during an earnings call, CEO Stéphane de La Faverie discussed some of the factors that have hurt the company’s performance in recent years, including “subdued” consumer sentiment in China and a “narrow focus” on too few markets.
“This was especially true in North America. Simply said we lost our agility,” de La Faverie said.
“We did not capitalize on the higher growth opportunities quickly enough. In channels, markets, media and prestige price tiers nor fuel new consumer acquisition aggressively enough.”
To that end, the company is embarking on a turnaround campaign that involves the elimination of 5,800 to 7,000 jobs, though that number takes into account reductions of employees after retraining and redeployment of some workers.
Estée Lauder says it also plans to expand its presence in certain channels and markets to take part in “key growth opportunities in prestige beauty” while also boosting consumer-facing investments by increasing ad spending.
“We know we didn’t make fast move in terms of new distribution when the consumer was moving,” de La Faverie added.
“That’s what we’ve demonstrated with the move that we’ve made a few months ago with Amazon and many of us like TikTok Shop in Asia and even in the U.S. So we’re going to really measure how quickly we move in this channel and how much we can like to capture lapsed consumers but also new consumers.”
The company also recently teamed with OpenAI recently to implement artificial intelligence (AI) across its brands. The companies developed 240 AI applications to analyze consumer data and create products for its various brands.
“The facility processes data from consumer surveys and clinical trials for the company’s beauty brands,” that report said. “Two primary applications have emerged from the development process: one analyzes consumer survey data for fragrance development, while another processes clinical trial results.”
As PayTechFocus wrote at the time, other beauty companies are also investing in AI for consumer-facing and product development. For example, L’Oréal expanded its use of Modiface, an AI and augmented reality platform that allows users to virtually try on makeup and experiment with hair colors.
And Sephora’s Virtual Artist tool lets customers find their ideal foundation shade using facial recognition and a skin tone database, improving accuracy and inclusivity.
As the global transportation and logistics sectors navigate economic uncertainty, rising fuel costs and increasing regulatory pressures, fleet managers are reevaluating their operational strategies.
The focus is shifting toward efficiency and cost savings, making payment and expense management a critical component of modern fleet operations. That was what Corpay executives told investors on Wednesday’s (Feb. 5) fourth quarter 2024 earnings call. And it’s good news for them.
“The only thing that has changed since our last call is that the macro has gotten a lot worse … our core businesses have remained just as strong,” CEO Ron Clarke said.
Still, a combination of FX headwinds and a weaker international currency environment clipped around $20 million from print revenue, though a favorable tax rate provided a counterbalance, he added.
Despite external pressures, Corpay’s Q4 results showcased the company’s ability to maintain stability and even drive growth in turbulent conditions. For Q4 2024, Corpay reported revenues of $1.03 billion, a 10% increase year-over-year, with organic revenue growth reaching 12%. Adjusted net income rose 18% to $383 million, while adjusted EPS climbed 21% to $5.36.
Corpay’s Corporate Payments division was the standout performer, growing 26% in Q4 and 20% for the full year. This growth was fueled by strong demand for accounts payable (AP) automation and international payment solutions. The company secured a major enterprise AP client, marking its expansion beyond the mid-market segment into large-scale corporate accounts.
“We primarily compete with banks, which control over 90% of international payment flows,” Clarke said. “But our superior technology and proprietary network give us a strong edge in this market.”
Corpay remains active in M&A, with plans to further expand its corporate payments business. The integration of GPS Capital Markets and Paymerang is well underway, and both deals are expected to add $0.50 in cash EPS accretion in 2025.
Corpay’s Vehicle Payments segment showed mixed results, with Q4 organic revenue up 8%, improving from 4% in Q3. Growth was primarily driven by increased adoption of digital vehicle payment solutions in Brazil, where the company has been expanding aggressively. Insurance-related revenues in the region rose over 130%, and Corpay sold nearly 300,000 vehicle insurance policies in Q4 alone.
Read more: Corpay to Acquire Brazil-Based Gringo to Expand Vehicle Payments Business
The company also acquired Gringo, its second vehicle payments acquisition in Brazil, expanding into the car debts payment market.
“This gives us entry into a huge Brazil payments TAM, approximately three times the size of our toll TAM, and very early days in terms of penetration,” Clarke noted.
PayTechFocus Intelligence’s “How the World Does Digital” report surveyed 67,000 consumers across 11 different countries. It found that Brazil was far ahead of all of them — including the United States — in digital engagement. Drilling down into the results, in 2023, 66.8% of Brazilians used mobile banking apps on their phones at least once a month, and 46.8% used these apps at least weekly.
Corpay is also focusing on cross-border payments. Revenue for that segment jumped 20% year-over-year, driven by 43% sales growth in Q4. Corpay is aggressively expanding its cross-border solutions, leveraging a proprietary network that allows it to compete effectively with banks, which still control 90%+ of international payment flows.
Fluctuating fuel prices continue to be one of the most significant challenges for fleet operators. Companies are deploying fuel hedging strategies and data-driven purchasing decisions to mitigate volatility. Corpay offers solutions that provide detailed fuel pricing insights and analytics, enabling fleets to make smarter purchasing decisions and reduce overall fuel spend.
Ultimately, Corpay’s 2024 results highlight a company firing on all cylinders, with record adjusted earnings and a rapidly expanding corporate payments business. However, macroeconomic headwinds — particularly foreign exchange volatility — are expected to weigh on 2025 performance.
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