Ken Stuzin, Brown Advisory

Slowing growth in China, but one company bucks the trend

Amidst concern about slowing growth in China and other emerging markets, Ken Stuzin (pictured), fund manager of the Brown Advisory US Equity Growth Fund says at least one company is bucking the trend…

We believe Estée Lauder is positioned at the sweet spot of several secular growth trends. Skin care and cosmetics are among the strongest growth categories in emerging markets, particularly China and Brazil. Prestige beauty, an affordable luxury, is taking share from mass brands, and Estee Lauder’s marketing strategy is driving this trend. Female employment growth and aging populations are providing additional boosts in developed markets.
 
The iconic manufacturer of beauty products whose brands include Estée Lauder, M-A-C Cosmetics, Bobbi Brown, Jo Malone, Clinique and Aveda to name but a few, continues to see organic sales growth across all major regions.
 
After a rocky earnings season for luxury consumer names, Estée Lauder’s latest report (14-Aug-2012) confirmed our investment thesis; the company reported rock solid top line growth and expressed confidence that its strategy and investment in its brands will continue to drive market share gains. We like this business in part because we believe it can deliver solid growth through soft consumer environments, and that was demonstrated this quarter.
 

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