Estee Lauder Faces Inventory Problems Amidst Challenging Quarter
In the latest edition of his daily Mad Dash, CNBC’s Jim Cramer shed light on Estee Lauder’s recent challenges and addressed rumors surrounding activist investor Nelson Peltz’s involvement with the company.
Cramer began by acknowledging Estee Lauder’s disappointing quarter, which the company itself did not anticipate.
However, he also mentioned his recent conversation with Estee Lauder, revealing that the company blamed the poor performance on inventory issues.
It appears that the company’s largest duty-free market in Asia had requested an excessive amount of products, leading to a miscalculation and subsequent inventory problems.
Despite the setback, Cramer emphasized that this should not reflect poorly on Estee Lauder’s CEO, Fabrizio Freda.
He acknowledged Freda’s track record as a capable manager and suggested that turning on him after one bad quarter would be unfair.
Addressing the speculation surrounding Nelson Peltz’s potential activist play in Estee Lauder, Cramer dismissed the notion, stating that the company is a controlled stock and any decision regarding its sale would require the approval of the 90-year-old Mr.
Lauder himself.
Cramer also took the opportunity to debunk a New York Post story that had added fuel to the rumors.
He assured viewers that the story was not true and urged them to focus on the fundamentals of the company moving forward.
While Cramer still owns Estee Lauder shares, he did mention that Fabrizio Freda had acknowledged the upcoming quarter would also be challenging due to lingering inventory issues.
However, Cramer reiterated his belief that the inventory problems were not the company’s fault, citing external factors such as limited travel and tourism in certain regions.
In conclusion, Estee Lauder continues to grapple with inventory problems and faces an uphill battle in the current quarter.
Despite the challenges, Cramer expressed confidence in the company’s management and dismissed rumors of Nelson Peltz’s involvement.
