From Fortune:

Hedge fund manager Terry Smith, likened to UK’s Buffett, has dumped Estée Lauder stock for its supply chain failures in China, moving to L’Oréal. Estée Lauder’s big losses come as it slashed its profit outlook over expected slowing growth in Asia travel retail and mainland China.

Smith’s hedge fund dumped Estée Lauder, criticizing serious supply chain inadequacies which caused its fall from 47% in 2023 and says L’Oreal is a “long-term favorite.” Estée Lauder’s slower growth in China and the Asian travel retail market is cutting expected profits by 35%. The conflict between Israel and Hamas in Gaza will cost Estée Lauder nearly $80 million.

As Este Lauder saw a decrease in the Asia/Pacific market, L’Oréal also experienced a decrease in sales growth. With these problems, Estée Lauder has faced issues with store reopenings in Asia and is predicting reduced travel demand.

Hedge fund manager Nick Frelinghuysen has credited L’Oréal as a good investment in downtimes and has contributed to significant growth in the fund.

The hedge fund run by Terry Smith has underperformed MSCI World Index in the past year. Despite criticism and outperforming, the fund has amassed widespread fame for ignore AI stocks favoring a long-term return. In contrast, last year’s investments in AI saw considerable stock growth and worth.



Read more: Terry Smith, Britain’s ‘Warren Buffett’, dumps Estée Lauder shares for rivals L’Oreal