Estee Lauder Cos. Inc - Class A
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +4.50%.
Did EL Beat Earnings? Q4 2025 Results
Estée Lauder Companies managed a narrow beat on both the top and bottom lines in its fiscal fourth quarter, though the results did little to obscure the depth of the turnaround challenge still ahead. The prestige beauty giant posted adjusted EPS of $0.09, edging past the $0.09 consensus estimate by 1.01%, while revenue of $3.41 billion came in just above the $3.40 billion forecast, even as sales tumbled 11.9% year over year. The steepest drag came from Skin Care, which fell 17% organically in the quarter as Asia travel retail weakness and subdued Chinese consumer sentiment continued to weigh on the company's largest category. For the full fiscal year, Estée Lauder swung to a GAAP net loss of $1.13 billion, burdened by $1.29 billion in goodwill and intangible asset impairments across brands including TOM FORD and Too Faced. Shares slipped following the report, with investors weighing a fiscal 2026 adjusted EPS outlook of $1.90 to $2.10 against roughly $100 million in expected tariff headwinds and a restructuring program now projected to eliminate up to 7,000 positions by fiscal 2027.
- Profit Recovery and Growth Plan (PRGP) driving gross margin expansion of 230 basis points
- Le Labo delivered strong double-digit year-over-year net sales increases in each fiscal 2025 quarter
- Clinique net sales growth across all geographic regions in Makeup
- The Ordinary delivered mid-single-digit growth through expanded consumer reach and innovation
- Expansion to eleven brands in Amazon's U.S. Premium Beauty store from three in the prior year
- Consumer-facing investments increased approximately 400 basis points as a percentage of sales
- Non-consumer-facing expenses reduced by 6% in fiscal 2025
“Having closed fiscal 2025 as expected, we remain wholly focused on continuing to execute our strategic vision of Beauty Reimagined with excellence. Despite continued volatility in the external environment, we embarked on fiscal 2026 with signs of momentum and confidence in our outlook to deliver organic sales growth this year after three years of declines and to begin rebuilding operating profitability in pursuit of a solid double-digit adjusted operating margin over the next few years.”
Estee Lauder Companies CEO, on the earnings call
Forward Guidance & Outlook
For fiscal 2026 (year ending June 30, 2026), the company expects GAAP net sales growth of 2%-5% and organic net sales growth of 0%-3%. Forecasted GAAP EPS is $1.63-$1.87, and adjusted non-GAAP EPS is $1.90-$2.10, representing 26%-39% growth over fiscal 2025. Adjusted operating margin is expected to be 9.4%-9.9%. The company assumes global prestige beauty growth of 2%-3%, mid-single-digit return to growth in mainland China, and modest growth at the mid-point for global travel retail. Tariff-related headwinds are expected to impact profitability by approximately $100 million, net of mitigation actions. Net cash flows from operating activities are expected between $1.0-$1.1 billion. Capital expenditures are expected at approximately 4% of projected sales. The adjusted effective tax rate is expected to be approximately 36%. The company is providing only an annual outlook going forward (no quarterly guidance) to allow more agility in navigating ongoing volatility.
EL YoY Financials
EL Revenue by Segment
EL Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.