De La Faverie, currently the cosmetic giant's executive group president, oversees high-end fragrance brands such as Jo Malone London, Frederic Malle, Le Labo and Kilian Paris.
He joined Estee in 2011 from L'Oreal (OREP.PA) and will take on the role from veteran Fabrizio Freda, who announced his retirement in August, on Jan. 1, 2025.
Estee had earlier said Freda would remain as an adviser to his successor in fiscal year 2026.
Freda became CEO in 2009 and was responsible for expanding the company's skincare portfolio with the addition of brands such as Dr. Jart and The Ordinary owner Deciem.
"Following a comprehensive CEO succession planning process, and a thorough review of external and internal candidates, Stephane was the clear choice of the board," Charlene Barshefsky, presiding board director, said.
The MAC lipstick maker also said William Lauder, the grandson of the company founders and former CEO, would also step down from his current role as executive chairman and remain chair of the board.
As new CEO, de La Faverie will be tasked with reviving sales, especially in China, at a time when demand for even "affordable luxuries" such as lipsticks and perfumes, widely considered recession-proof, are seeing a hit.
Estee is set to report its quarterly earnings on Thursday. In the prior quarter, the company forecast its annual profit and sales below estimates due to weakness in China.
Shares of the company have fallen nearly 40% this year.
