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THE ESTÉE LAUDER COMPANIES INC.

(EL)
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CFOs Plan to Reopen Offices But May Keep Some Pandemic Changes

06/07/2021 | 05:30pm EDT

By Kristin Broughton

Finance chiefs are drawing up plans to reopen their companies' offices but want to stick to certain changes made during the pandemic to control costs and drive sales.

Speaking Monday at The Wall Street Journal's CFO Network Summit, the chief financial officers of AT&T Inc., Estée Lauder Cos. and Salesforce.com Inc. said they are helping their companies prepare for when restrictions end and business operations normalize. That includes boosting investment in digital capabilities, building out online offerings and figuring out how much real estate their companies will need in the years to come.

AT&T plans to shrink its footprint of company-owned stores as it relies more heavily on digital channels to boost sales, said Pascal Desroches, who took over as CFO earlier this year. The Dallas-based telecommunications company is also reviewing its corporate real estate footprint, Mr. Desroches said, noting that he expects some employees to work either remotely or with hybrid schedules once offices fully reopen.

"We really learned we can reimagine the way work can be performed," Mr. Desroches said, citing benefits of remote work such as improved efficiency. AT&T doesn't disclose its total store count, according to a spokeswoman. The company had about 230,000 employees as of Jan. 31.

AT&T doesn't plan on forcing employees to get vaccinated, but intends to offer perks and privileges to those who do, such as allowing them to attend office meetings without masks, Mr. Desroches said. "We are using the carrot approach," he said.

Salesforce is also drawing up plans for bringing employees back to its corporate offices, Amy Weaver, the company's finance chief, said. The San Francisco-based software company expects that about 20% of its employees will continue to work remotely once offices reopen, up slightly from 15% who did so before the pandemic. Most Salesforce employees prefer a hybrid schedule, she said, citing internal surveys. Salesforce is now trying to assess what that means for occupancy rates.

"We have beautiful real estate around the world, which I love, but I love it more when it is fully occupied," Ms. Weaver said. The company, which had about 56,600 employees as of Jan. 31, hasn't determined if it will require its employees to be vaccinated, she said.

After retailers temporarily closed stores last spring, Estée Lauder boosted its e-commerce investments to allow customers to try on makeup virtually or participate in digital sales events, said CFO Tracey Travis. The cosmetics giant had tested some of those digital tools before the pandemic forced stores to close, Ms. Travis said. "What the pandemic did was accelerate some of those experiments," she said.

Ms. Travis said she expects online selling capabilities to remain critical even as stores fully reopen in order to cater to customers who prefer to buy skin care products and makeup online.

Virtual employee meetings, meanwhile, have been a boon for Salesforce, Ms. Weaver said. The company at the beginning of its fiscal year usually hosts various events for its sales staff that can last several weeks in total. This year, the virtual format took only three days, resulting in lower travel costs and less time away from clients, she said.

"There [are] new ways of doing business that are going to benefit you in terms of revenue and savings," Ms. Weaver said.

Write to Kristin Broughton at Kristin.Broughton@wsj.com

(END) Dow Jones Newswires

06-07-21 1930ET

Stocks mentioned in the article
ChangeLast1st jan.
AT&T INC. -0.31% 28.65 Delayed Quote.-0.38%
DJ INDUSTRIAL -1.58% 33290.08 Delayed Quote.10.51%
S&P 500 -1.31% 4166.45 Delayed Quote.10.93%
SA CORPORATE REAL ESTATE LIMITED 2.27% 2.25 End-of-day quote.30.06%
SALESFORCE.COM, INC. -0.68% 242.78 Delayed Quote.9.10%
THE ESTÉE LAUDER COMPANIES INC. -1.34% 295.88 Delayed Quote.11.15%
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Financials (USD)
Sales 2021 16 044 M - -
Net income 2021 2 045 M - -
Net Debt 2021 353 M - -
P/E ratio 2021 53,4x
Yield 2021 0,69%
Capitalization 107 B 107 B -
EV / Sales 2021 6,71x
EV / Sales 2022 5,90x
Nbr of Employees 48 000
Free-Float 38,9%
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Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 330,68 $
Last Close Price 295,88 $
Spread / Highest target 24,0%
Spread / Average Target 11,8%
Spread / Lowest Target -15,8%
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Managers and Directors
NameTitle
Fabrizio Freda President, Chief Executive Officer & Director
John D. Demsey Executive Group President
Jane Hertzmark Hudis Executive Group President
Stéphane de la Faverie Group President
Tracey Thomas Travis Chief Financial Officer & Executive Vice President
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