When asked if certain price tiers are more recession proof, Lauder, referring to high-end department stores, said, "The upper-end has been doing far better, but we're starting to see that consumer is struggling also." He added that while department stores struggle, momentum continues to gain in alternative channels, including the Internet, where the company is seeing double-digit increases across most of its sites.

The company is gearing up to welcome Fabrizio Freda, former president of the Global Snacks division of Procter & Gamble, on March 3 to the post of president and chief operating officer. The firm expects to name him ceo within 24 months.