Finimize - 🔎 Where to spot emerging market stocks

Hi Reader, here's what you need to know for August 19th in 3:11 minutes.

🏈 If you liked collecting player cards as a kid, you’ll love exploring new digital tokens in the sports industry. So join BitMart’s Matt Ryan for Crypto And The Sports Community on Tuesday, and find out how to spot the rarest, shiniest, most gotta-have-’em investment opportunities in the sports world. Get your free ticket

Today's big stories

Estée Lauder benefited from the “lipstick effect” last quarter, but China held the company back
Emerging markets could be about to bounce back, and there could be plenty of opportunities for you to choose from – Read Now
Companies still need Cisco’s services, even in times like these

Estée Lauder’s Quarterly Results Have A Sultry Pout

What’s Going On Here?

Beauty giant Estée Lauder gave a disappointing sales outlook for the year on Thursday.

What Does This Mean?

There’s a phenomenon called the “lipstick effect” that tends to emerge in times of economic hardship, where shoppers scale down their luxury purchases to something smaller – hence lipstick – rather than stop them altogether. That dynamic was in full flow last quarter: Estée Lauder’s fragrance and make-up sales lifted its revenue in the US, Canada, and Latin America by 12% from the same time the year before.

So it was a shame about China, whose shopping districts sat empty due to ongoing Covid restrictions. That left Estée Lauder’s brands – including Clinique and La Mer – with piles of unsold stock, which dragged down sales in the Asia-Pacific region by 23%. So even though the company managed better-than-expected overall sales of $3.6 billion last quarter, its full-year sales and profit outlook still came in well below expectations.

Why Should I Care?

Zooming in: Handbags and gladrags.
Estée Lauder is also reportedly thinking about buying luxury company Tom Ford for $3 billion. But while the latter’s beauty and fragrance businesses would be a good fit, clothing and accessories would be more of a stretch. For one thing, Estée Lauder doesn’t have the expertise required to run a fashion house, which it might need to remedy by partnering with someone who does. And for another, Tom Ford’s handbags are a small part of its product line – not ideal given that handbags are the real money-spinners in the industry.

The bigger picture: Just you watch.
There are some luxury shopping habits that the lipstick effect can’t explain, and the boom in watches is one of them: data out on Thursday showed that Swiss watch exports hit a near-record $2.3 billion in July (tweet this). Stranger still, the highest-end pieces were the biggest draw, with those worth $500 or more representing 95% of that total.

You might also like: How to profit from the luxury sector.

Copy to share story: https://www.finimize.com/wp/news/estee-lauders-quarterly-results-have-a-sultry-pout/

🙋 Ask a question

Analyst Take

Where To Look For Emerging Market Stocks

Stéphane Renevier, Analyst

Investors are starting to feel more optimistic about the global economy.

And with that, emerging markets, or EMs, are starting to perform better, not least because those economies offer more growth potential than their developed counterparts.

That makes the case for adding EM stocks to your portfolio a compelling one – if you can find the right opportunities.

So that’s today’s Insight: where to find the most promising EM stocks.

Read or listen to the Insight here

📝 [Insert your company’s name here]

Your company’s name would look pretty good in this space, huh?

We’re sure our one million engaged investors would think so too.

If you want to spread the word about your business, chat to us about our daily newsletter slots. They’re the perfect opportunity for you to speak directly with the Finimize community.

Sound good? Get in touch.

Work With Us