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Dive Brief:
- Estee Lauder is promoting its corporate controller Akhil Shrivastava, a nine-year company veteran, to succeed CFO Tracey Travis, whose plans to retire next year were announced earlier this month, according to a company release and securities filing Tuesday.
- Since joining the beauty products maker in 2015, Shrivastava, 51, has held numerous roles including treasurer, and he has also overseen the operational piece of the company’s ongoing restructuring initiative. He will become finance chief on Nov. 1, with Travis staying on as an executive vice president and senior adviser until June 30 of next year to help with the transition.
- Shrivastava’s extended experience at the firm and his understanding of the “the levers the company can pull to revive growth” were cited by Morningstar analyst Dan Su in a Wednesday report, which maintained a $210 fair value estimate of the stock’s intrinsic value. “We view his experience overseeing inventory, cash, and cost improvement at Estee as particularly relevant, which he can leverage in working with CEO Fabrizio Freda to shape a leaner and more agile Estee in the coming years,” the report states.
Dive Insight:
On Tuesday the company also said that the cost of the previously announced restructuring program is expected to total between $500 million and $700 million before tax, according to a separate securities filing. Among the initiatives approved since April 24 that the company will undertake in an effort to drive sales growth and rebuild operating martin profitability is a push for value chain optimization, which will result in “employee severance through a net reduction in workforce,” the company said in the filing.
Akhil Shrivastava
Courtesy of Estee Lauder
The Morningstar report described progress the company is making on its recovery plan, while also asserting quarterly results may “remain choppy” as macro challenges persist. “We believe initiatives to cut organizational layers in value chain management, marketing, and channel functions are already underway. In addition, we think the company is in the process of exiting unprofitable brands and channels while carefully managing the impact on the overall company image and important retailer relations,” the report states.
Shrivastava appeared to give a nod to the recovery efforts in a statement in the release. “I look forward to helping to advance the Company’s multiple engines of growth to rebuild stronger, more sustainable profitability and support sales growth acceleration across brands, product categories, and regions while evolving the business for the future,” Shrivastava said.
In his new role Shrivastava, effective Nov. 1, will receive an annual base salary of $900,000 with an aggregate bonus opportunity of $1 million, which will be pro-rated for the months during the year in which he takes the new position, according to a securities filing.
via https://www.aiupnow.com
Maura Webber Sadovi, Khareem Sudlow
