Estee Lauder reported underwhelming results for Q4. The headline is that China isn’t quite back and consumer discretionary products are starting to feel the pain. Skincare sales fell 20% - skincare has been a “hero” line the past decade, as the consumer focus has shifted from makeup to self-care. It’s a big harbinger of consumer pain - we think more so than other disappointing results (Apple, Snap, etc). The other headline to note here is that EL’s budget line - “The Ordinary”, which grew double-digits in every region. In comparison, ultra-luxe lines like La Mer experienced a decline in sales, which suggests that the wallet of top-middle-income-bracket folks is starting to be stretched. We reiterate our buy-rating, as the company remains best-in-class. Since our initial recommendation the stock has re-rated +25%.