CARRARA advisory

𝗧𝗵𝗿𝗶𝗹𝗹𝗶𝗻𝗴 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁𝘀 𝗶𝗻 𝗧𝗿𝗮𝘃𝗲𝗹 𝗥𝗲𝘁𝗮𝗶𝗹! 𝘞𝘦 𝘢𝘵 𝘊𝘈𝘙𝘙𝘈𝘙𝘈 𝘈𝘥𝘷𝘪𝘴𝘰𝘳𝘺 𝘢𝘳𝘦 𝘱𝘳𝘰𝘶𝘥 𝘵𝘰 𝘩𝘢𝘷𝘦 𝘴𝘶𝘱𝘱𝘰𝘳𝘵𝘦𝘥 E23 Retail 𝘪𝘯 𝘧𝘰𝘳𝘮𝘪𝘯𝘨 𝘢 𝘴𝘵𝘳𝘢𝘵𝘦𝘨𝘪𝘤 𝘱𝘢𝘳𝘵𝘯𝘦𝘳𝘴𝘩𝘪𝘱 𝘸𝘪𝘵𝘩 DRP Data Research Publications 𝘵𝘰 𝘳𝘦𝘷𝘰𝘭𝘶𝘵𝘪𝘰𝘯𝘪𝘻𝘦 𝘥𝘢𝘵𝘢-𝘥𝘳𝘪𝘷𝘦𝘯 𝘴𝘰𝘭𝘶𝘵𝘪𝘰𝘯𝘴 𝘪𝘯 𝘵𝘳𝘢𝘷𝘦𝘭 𝘳𝘦𝘵𝘢𝘪𝘭. From identifying this unique opportunity and bringing the partners together to shaping a compelling plan and negotiating terms, our team played a pivotal role in turning this exciting collaboration into reality. We’re delighted to have driven this initiative from vision to signature, contributing to the future of Travel Retail with innovative, impactful partnerships. Special thanks to Alessandro Lo Piano Pomar and Laurent Benkiewicz for their trust on our vision! #TravelRetail #Partnerships #Innovation #DataDrivenSolutions #BusinessDevelopment #CARRARAAdvisory #E23 #DRP #RetailTransformation #StrategicPartnership #DutyFree #RetailIndustry https://lnkd.in/eBBTyi9V

“𝘛𝘩𝘦 𝘧𝘢𝘤𝘵 𝘵𝘩𝘢𝘵 𝘱𝘦𝘰𝘱𝘭𝘦 𝘢𝘳𝘦 𝘧𝘶𝘭𝘭 𝘰𝘧 𝘨𝘳𝘦𝘦𝘥, 𝘧𝘦𝘢𝘳 𝘰𝘳 𝘧𝘰𝘭𝘭𝘺 𝘪𝘴 𝘱𝘳𝘦𝘥𝘪𝘤𝘵𝘢𝘣𝘭𝘦. 𝘛𝘩𝘦 𝘴𝘦𝘲𝘶𝘦𝘯𝘤𝘦 𝘪𝘴 𝘯𝘰𝘵 𝘱𝘳𝘦𝘥𝘪𝘤𝘵𝘢𝘣𝘭𝘦” – Warren Buffett It’s well-known that in the short (and sometimes even medium) term, stock market movements are often more influenced by investor sentiment than by the actual performance of companies. But what about beauty stocks? Are they suffering purely from negative market sentiment, or is the beauty industry genuinely in trouble? Until the first quarter of this year, the beauty companies we track showed only modest performance. In Q2, we saw a divergence: brands like AmorePacific, Beiersdorf, Shiseido, and Puig improved, while others experienced declining results. Yet by now, all these companies have seen their stocks decline, with none trading above their starting point for the year. The drops range from -3.4% for AmorePacific to a steep -54.6% for Estée Lauder. Despite these market losses, the financial fundamentals tell a different story. By the end of the first half of the year, these beauty companies had a combined revenue increase of +6.2% year-over-year, and net profit growth of +10.5% year-over-year. Preliminary data for the first nine months still point to overall growth and solid business fundamentals. So, why the disconnect between strong financials and falling stock prices? Likely, it’s a mix of high expectations not being fully met, disproportionate fears around trends in China and luxury (as well as other geopolitical uncertainty), and company-specific challenges. #StockMarket #BeautyIndustry #InvestorSentiment #MarketTrends #FinancialPerformance #LuxuryTrends #BeautyStocks #ChinaMarket #InvestmentInsights

Skin Health Positioning Wars: Eco-Friendly Push vs. Clinical Dominance. The skincare industry is experiencing significant transformation, with Kenvue and L'Oréal driving innovation and redefining market dynamics through their flagship brands, Neutrogena and CeraVe. Kenvue’s Neutrogena is intensifying its sustainability initiatives, launching eco-friendly packaging and cleaner product formulations to attract environmentally aware consumers. With the introduction of the Collagen Bank line, Neutrogena is also engaging Gen Z, addressing pre-aging concerns through advanced micro-peptide technology. Conversely, L’Oréal’s CeraVe has solidified its status as the most dermatologist-recommended brand in the U.S., thanks to its simple, effective formulas that emphasize skin barrier health. Although CeraVe’s sustainability messaging isn’t as prominent, L'Oréal’s overall commitment to sustainable practices suggests future alignment with these values. In the past, Neutrogena dominated dermatologist endorsements, but CeraVe now leads this metric. In response, Neutrogena is reinforcing its clinical credibility by partnering with influential dermatologists like Dr. Muneeb Shah and Dr. Dhaval Bhanusali, showcasing a renewed focus on dermatologist-led innovation. These strategies, echoed across other brands in Kenvue’s Skin Health & Beauty and L’Oréal’s Dermatological Beauty divisions, highlight different paths to market leadership. However, recent sales data and strategic adjustments suggest that science-based, dermatologist-trusted positioning may currently be outperforming the eco-friendly narrative. #Skincare #BeautyTrends #Sustainability #Dermatology #Kenvue #LOréal #Neutrogena #CeraVe #GenZ #MarketLeadership

Estée Lauder has faced well-known challenges over the past few years. But is the company really struggling as much as it seems? Since the global pandemic, Estée Lauder’s recovery has been sluggish, weighed down by higher costs for raw materials, logistics, and energy. Despite these headwinds, the company maintained a bullish strategy, discontinuing its licensed business and making bold acquisitions like the Tom Ford brand. The ongoing Ukraine crisis, combined with broader geopolitical tensions and luxury market dynamics in China, have led to additional challenges. But it’s crucial not to view China as the sole reason for Estée Lauder’s struggles—there’s more to the story. In the latest earnings call, Estée Lauder’s stock dropped below the $70 mark, a level it hasn’t seen in over a decade. This raised concerns, and we highlighted some of these dynamics in an earlier post. Yet, could the market be overly pessimistic? Despite a -4% YoY revenue decline in Q1 24/25, there are promising signs: ROCE is once again outpacing WACC, EBIT (excluding one-time restructuring and litigation costs) is up 36% YoY, inventory management has improved, with Days Inventory Outstanding (DIO) reduced from 488 to 443 year over year. Fundamentals are strengthening, and once Estée Lauder unlocks revenue growth, it could very well return to the industry leadership we know it for. Are we seeing the beginning of a turnaround? Let’s keep an eye on what comes next with the new guard fully in place! #beauty #beautyindustry #LuxuryBeauty #MarketAnalysis #InvestorInsights #BusinessStrategy #StockMarket #FinancialPerformance #BeautyIndustry #Turnaround #EconomicTrends

We are thrilled to welcome Pietro as our new Senior Advisor, opening up a new chapter in our firm focused on supply chain management and sustainability. With a remarkable 38-year career at Procter & Gamble, Pietro is an expert in operational excellence, logistics, and sustainable practices. He has held both regional and global roles across Europe and the USA, driving efficiency and innovation in diverse markets. His transformative approach to M&A and brand integration has created synergies and substantial cost improvements for organizations. In addition to his consultancy work, Pietro is also a respected educator, teaching at several universities where he shares his extensive knowledge and insights. His strategic expertise in optimizing global operations and designing sustainable supply chain networks positions him as a trusted advisor for companies looking to enhance their logistics and operational performance on an international scale. We look forward to the significant contributions he will make to our firm and our clients. #SupplyChainManagement #Sustainability #OperationalExcellence #Logistics #SustainablePractices #MergersAndAcquisitions #BrandIntegration #LeadershipAnnouncement #BusinessStrategy #GlobalOperations #IndustryExpertise #Consulting #EducationAndTraining #Efficiency #InnovationInLogistics #CorporateSustainability Pietro D'Arpa

Is Hermès Truly Unstoppable? Despite efforts to diversify, Hermès continues to lean heavily on a couple of product categories and geographies. Its leather goods and ready-to-wear categories, remain its core pillars. Leather goods accounted for 42% of total revenue in Q3 2024, growing at a modest 3% CAGR over the past 10 quarters. Similarly, the ready-to-wear and accessories category contributes significantly at 31%, with a 5% growth rate. However, the brand’s initiatives in beauty and watches have shown limited traction, with beauty growing just 1% and watches even declining by 1% over the same period. From a regional perspective, Europe has emerged as the strongest growth market, increasing from 22% of total revenue in 2022 to 26% year-to-date in 2024. Asia-Pacific (excluding Japan) remains Hermès’s largest market, comprising 43% of revenues, even as China’s economic challenges have impacted growth. In contrast, the Americas and Japan continue to represent smaller shares, with their growth rates plateauing. With rising economic uncertainties in Asia, stagnant performance in the Americas, and heightened competition in Europe, could Hermès’s growth trajectory be at risk? As the brand relies on high-ticket items and premium positioning, maintaining resilience amidst global slowdowns may require more aggressive diversification strategies beyond its traditional strengths. #Hermes #LuxuryMarket #GrowthStrategy #LeatherGoods #GlobalEconomy #beauty #watches #linkedin #datainsights

𝗕𝗲𝗮𝘂𝘁𝘆 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝘆 𝗣𝗿𝗶𝗰𝗲 𝗧𝗿𝗲𝗻𝗱𝘀: 𝗔𝗿𝗲 𝗪𝗲 𝗙𝗶𝗻𝗮𝗹𝗹𝘆 𝗦𝗲𝗲𝗶𝗻𝗴 𝗮 𝗦𝗹𝗼𝘄𝗱𝗼𝘄𝗻?  After a period of continuous price hikes, there’s a hint that price increases in the beauty industry may be stabilizing. Since the global pandemic, higher raw material, logistics, and energy costs – intensified by the ongoing Ukraine crisis and other geopolitical issues – pushed brands to raise prices to protect margins. This has impacted consumers across all sectors, prompting shifts in purchasing behaviours: 𝗩𝗮𝗹𝘂𝗲–𝗗𝗿𝗶𝘃𝗲𝗻 𝗦𝗵𝗼𝗽𝗽𝗶𝗻𝗴: Many consumers have moved toward accessible brands or value-tier products, and discretionary spending is under scrutiny. Private labels are thriving in the mass market, while the “China luxury crisis” underscores a shift in luxury product spending even in high-end beauty. 𝗣𝗿𝗶𝗰𝗲 𝗦𝗲𝗻𝘀𝗶𝘁𝗶𝘃𝗶𝘁𝘆: Inflation is easing, and with it, so are aggressive price hikes. Particularly in the mass and masstige segments, brands are becoming more cautious with price increases. For many shoppers, affordability is key, and brands recognize the importance of balancing pricing with value and quality. 𝗙𝗼𝗰𝘂𝘀 𝗼𝗻 𝗖𝗼𝗻𝘀𝘂𝗺𝗲𝗿 𝗖𝗼𝗻𝗻𝗲𝗰𝘁𝗶𝗼𝗻: As price hikes slow, beauty brands are refining their strategies, focusing on innovation, sustainability, and inclusive beauty to resonate with consumers. The demand for accessible luxury, high-quality skincare, and digital-first experiences are reshaping consumer expectations in beauty. This may be a turning point where value, innovation, and consumer-centricity lead the way in the beauty industry. #BeautyIndustry #PriceTrends #Inflation #ConsumerInsights #Sustainability #AccessibleLuxury #ValueDriven #BeautyInnovation #MarketTrends #LinkedInInsights

Beauty and wellness is the undisputed leader in the travel retail industry, contributing to approximately 35% of the sector's total value. This category’s significance is even more pronounced for retailers with a strong presence in the Asia-Pacific region, where demand for premium beauty products — particularly skincare and luxury cosmetics — is (or at least has been so far!) remarkably high. Luxury Goods follow a similar path in travel retail, with a growing share of high-spending travellers in the Asian region opting for premium brands across fashion, accessories, and jewellery. Given the current challenges in the beauty and luxury industry in the Asian (read China) region, it is crucial to deeply understand customer behaviors and adapt strategies to mitigate such sales decline. In this context, pioneering companies like E23 Retail can play an instrumental role in supporting both retailers and brands. Disclaimer: these data are drawn from a combination of company annual financial reports (e.g., Avolta, Lagardère, and others) and AI-driven estimates where data is not publicly available or available exclusively as an aggregate. Please feel free to share more reliable data if available. #TravelRetail #BeautyAndWellness #LuxuryGoods #AsiaPacific #Skincare #LuxuryCosmetics #DutyFree #RetailTrends #ConsumerBehavior #TravelIndustry #MarketInsights Alessandro Lo Piano Pomar Giuseppe Maria Ardizzone Federico Figliuolo

China: The Scapegoat for Soft Performance? It’s become a common refrain at investor meetings: many beauty and luxury brands attribute their lackluster performance to the ongoing turmoil in China. But is this narrative fully justified? Yes, the beauty market in China is experiencing a slowdown. Both the spring and holiday peak seasons are shrinking, and overall annual growth is decelerating. However, it’s crucial to recognize that the Chinese beauty market continues to expand—albeit not necessarily through international or luxury brands. A closer examination reveals that other regions are also softening, even as investor expectations remain elevated. For instance, L'Oréal reported a +3.4% growth in the third quarter on a like-for-like basis and a +6% increase year-to-date. These figures reflect solid growth compared to the anticipated inflation rate of 2.6% for G7 and advanced economies in 2024 and align with the global rate of 5.8% (according to International Monetary Fund data). Yet, following this announcement, the company's share price dropped in the high single digits. While it's clear that China's market dynamics play a role, the more significant challenge lies in managing investor expectations. As we navigate these turbulent waters, it’s essential to reassess our narratives and focus on long-term strategies. #BeautyIndustry #LuxuryMarket #InvestorRelations #MarketTrends #ChinaBeauty #BusinessGrowth #L'Oreal #InvestorExpectations #MarketAnalysis #china

Tosla: The Nutricosmetics Manufacturer You Can Trust! We had the pleasure of visiting Tosla Nutricosmetics and their state-of-the-art manufacturing facility, and we were thoroughly impressed. Tosla’s dedication to quality, their passion for innovation, and their commitment to producing high-performance, clinically tested products truly set them apart in the crowded supplement market. One standout feature is their award-winning, patented VELIOUS™ flavor technology. It’s a game-changer—effectively masking the unpleasant tastes of active ingredients and aligning product flavors with market trends and consumer preferences (we personally sampled their latest flavors, and they were delicious!). In short: Tosla delivers proven performance, great taste, and ultimate convenience in liquid formats. If you're considering entering the nutricosmetics space, we highly recommend getting in touch with Tosla! #Nutricosmetics #BeautyFromWithin #SupplementInnovation #VELIOUS #FlavorTechnology #SkincareSupplements #HealthAndBeauty #ProductDevelopmen t#CleanLabel #QualityManufacturing #ClinicalTesting #InnovativeSupplements #WellnessIndustry #BeautyTech #FunctionalIngredients