TIVP028: Estée Lauder (EL): Michael Burry’s Big Bet w/ Daniel Mahncke & Shawn O’Malley
The Intrinsic Value Podcast - The Investor’s Podcast Network
China's 2023 Gray Market Crackdown and the Transformation of Hainan
This chapter explores the recent crackdown on gray market practices in China, focusing on the strategic timing influenced by economic factors. The discussion highlights Hainan's evolving role as a duty-free destination and its impact on tourism and consumption patterns.
Daniel Mahncke and Shawn O’Malley take a closer look at Estée Lauder’s turbulent turnaround, tracing the beauty giant’s fall from pandemic favorite to contrarian play. After years of strong growth, the company was hit by an inventory pileup, the collapse of China’s daigou shopping channel, and a broader slowdown in its most important market. In this episode, they explore whether the “Beauty Reimagined” strategy and the arrival of new CEO Stéphane de La Faverie can reignite growth through cost savings, better channel mix, and stronger appeal to younger consumers.
Daniel and Shawn debate how realistic a turnaround is, whether the risk/reward resembles Nike’s recent playbook, and what needs to go right for Estée Lauder to reclaim its former strength. They also touch on wider beauty industry trends, the role of R&D as a competitive moat, internal tensions within the Lauder family, and the growing strategic weight of China for global fashion and cosmetics brands.
Prefer to watch? Click here to watch this episode on YouTube.
IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
05:29 - How Estée Lauder built the beauty giant
13:42 - Why Estée Lauder’s business and stock fell so dramatically
27:22 - How Social Media and personal brands changed the beauty industry
14:03 - Why China played a major part in the company’s rise and fall
42:23 - How the family drama caused a management crisis
46:26 - How Estée Lauder plans to rise to the industry’s top again
55:08 - Whether Estée Lauder is attractively valued at its current levels
1:00:08 - Whether Shawn & Daniel add EL to The Intrinsic Value Portfolio
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
- Sign Up for The Intrinsic Value Community.
- Book on Estée Lauder: The Company I Keep – My Life in Beauty.
- Estée Lauder’s Investor Relations.
- Explore our previous Intrinsic Value breakdowns: Uber,Nike, Reddit, Nintendo, Airbnb, AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports.
- Check out the books mentioned in the podcast here.
- Enjoy ad-free episodes when you subscribe to our Premium Feed.
NEW TO THE SHOW?
- Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok.
- Browse through all our episodes (complete with transcripts) here.
- Try Shawn's favorite tool for picking stock winners and managing our portfolios: TIP Finance.
- Enjoy exclusive perks from our favorite Apps and Services.
- Learn how to better start, manage, and grow your business with the best business podcasts.
SPONSORS
Support our free podcast by supporting our sponsors:
Connect with Shawn: Twitter | LinkedIn | Email
Connect with Daniel: Twitter | LinkedIn | Email
HELP US OUT!
Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!
Learn more about your ad choices. Visit megaphone.fm/adchoices
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
The AI-powered Podcast Player
