The Estée Lauder Companies Inc. (NYSE:EL) Q3 2024 Earnings Conference Call May 1, 2024 9:30 AM ET

Company Participants

Rainey Mancini - Senior Vice President, Investor Relations
Fabrizio Freda - President and Chief Executive Officer
Tracey Travis - Executive Vice President and Chief Financial Officer

Conference Call Participants

Bryan Spillane - Bank of America
Olivia Tong - Raymond James
Lauren Lieberman - Barclays
Dara Mohsenian - Morgan Stanley
Filippo Falorni - Citi
Steve Powers - Deutsche
Andrea Teixeira - JPMorgan

Operator

Good day, everyone, and welcome to the Estée Lauder Companies Fiscal 2024 Third Quarter Conference Call. Today's call is being recorded and webcast. [Operator Instructions] For opening remarks and introductions, I'd like to turn the call over to Senior Vice President of Investor Relations, Ms. Rainey Mancini. Ma'am, you may begin.

Rainey Mancini

Hello. On today's call are Fabrizio Freda, President and Chief Executive Officer; and Tracey Travis, Executive Vice President and Chief Financial Officer. Since many of our results today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward-looking statements. To facilitate the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated, all organic net sales growth also excludes the non-comparable impacts of acquisitions, divestitures, brand closures and the impact of foreign currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the Investors section of our website.

As a reminder, reference to online sales, include sales that we make directly to our consumers through our brand.com sites and through third-party platforms. It also includes estimated sales of our products through our retailers' websites. [Operator Instructions]

And now I'll turn the call over to Fabrizio.

Fabrizio Freda

Thank you, Rainey and hello to everyone. We are pleased to be with you today to review our third quarter results and discuss our strategic initiatives. For the third quarter, we delivered organic sales growth of 6% at the high end of our outlook, exceeded expectations for profitability and continued to significantly improve working capital. We achieved stronger-than-anticipated performance beginning with gross margin. Results benefited from a greater than expected mix of skin care.

Moreover, we made great strides in reducing the pressure on excess and obsolescence, driven by our now lower inventory levels and in realizing strategic pricing. Further contributing to the outperformance, we manage expenses with discipline across multiple areas of the business and have shifted certain advertising spending to the fourth quarter to support our rich innovation pipeline and expanded consumer reach.