Estee Lauder Cos. Inc - Class A
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.25%.
Did EL Beat Earnings? Q1 2026 Results
Estée Lauder Companies delivered a sharply stronger-than-expected fiscal first quarter, with adjusted diluted EPS of $0.32 beating the $0.18 consensus estimate by 81.92% as the beauty giant's restructuring program began translating into meaningful margin recovery. Revenue rose 3.6% year over year to $3.48 billion, clearing the $3.38 billion consensus by 2.94%, while adjusted operating margin expanded 300 basis points to 7.3%, powered by the company's Profit Recovery and Growth Plan, which drove procurement efficiencies and reduced non-consumer-facing costs. Fragrance was the standout category, posting 13% organic growth behind luxury brands including Le Labo and TOM FORD, while Mainland China and Asia travel retail provided critical geographic momentum. The quarter also marked a swing back to GAAP profitability, with net income of $47 million compared to a net loss of $156 million a year earlier. Adding a note of complexity, several Lauder family trusts collectively sold over $1 billion in shares in early November. Management reaffirmed its full-year outlook for 2%-5% reported sales growth and adjusted EPS of $1.90 to $2.10.
- Profit Recovery and Growth Plan (PRGP) driving operational efficiencies and procurement savings
- Fragrance category growth of 13% organic led by luxury brands Le Labo, TOM FORD, and Jo Malone London
- Asia travel retail recovery from low prior-year base
- Mainland China growth driven by innovation, expanded consumer reach, and online growth
- Reduced promotional activity and excess and obsolescence improving gross margins
- Reduction in non-consumer-facing expenses funding consumer-facing investments
“We had a strong start to fiscal 2026 as we execute on our Beauty Reimagined strategy—returning to organic sales growth, gaining prestige beauty share in a few key strategic areas of focus, and improving profitability. Encouragingly, we are building momentum across the organization from the significant operational changes we have executed to-date to be faster and more agile.”
Estee Lauder Companies CEO, on the earnings call
Forward Guidance & Outlook
The company reaffirms its fiscal 2026 full-year outlook: reported net sales growth of 2%-5% (GAAP) and organic net sales growth of 0%-3% (Non-GAAP). Forecasted GAAP EPS of $1.39-$1.65 and adjusted Non-GAAP EPS of $1.90-$2.10, representing 26%-39% growth. Tariff-related headwinds expected to impact profitability by approximately $100 million, with more than half offset through mitigation actions including leveraging trade programs and optimizing regional manufacturing. The PRGP restructuring is expected to be substantially completed in fiscal 2027 with a majority of full run-rate benefits realized during fiscal 2027, designed to restore a solid double-digit adjusted operating margin over the next few years.
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Figures from SEC filings and company reports. Not investment advice.