Estee Lauder Cos. Inc - Class A
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: −0.06%.
Did EL Beat Earnings? Q2 2026 Results
Estée Lauder Companies posted a confident fiscal second quarter, beating earnings expectations while falling just shy on revenue as CEO Stéphane de La Faverie's "Beauty Reimagined" turnaround strategy continued to gain momentum. Adjusted diluted EPS came in at $0.89, clearing the $0.83 consensus estimate by 6.60%, while net sales of $4.23 billion rose 5.6% year over year but missed the $4.24 billion consensus by a slim 0.16%. The standout driver was the company's Profit Recovery and Growth Plan, which expanded adjusted operating margin by 290 basis points to 14.4% as procurement efficiencies and cost reductions funded heavier consumer-facing investment, with Skin Care and Fragrance each delivering 6% organic growth. Mainland China delivered double-digit sales growth for a second consecutive quarter, adding geographic breadth to the recovery story. Looking ahead, management raised its full-year fiscal 2026 guidance, now targeting adjusted EPS of $2.05 to $2.25 and as-reported net sales growth of 3% to 5%, even as roughly $100 million in tariff headwinds are expected to weigh more heavily in the second half.
- Profit Recovery and Growth Plan (PRGP) driving procurement efficiencies and expense optimization
- Strong performance during key shopping moments including 11.11 Global Shopping Festival and holiday season
- Mainland China double-digit retail sales growth for second consecutive quarter
- Luxury fragrance brands (TOM FORD, Le Labo, KILIAN PARIS) driving high-single-digit fragrance growth across all regions
- Increased consumer-facing investments supporting activations and innovation
- Lower excess and obsolescence costs
- Absence of prior-year $861 million goodwill and intangible asset impairments
“We delivered excellent second quarter results to solidify a strong first half of fiscal 2026. In this pivotal year, Beauty Reimagined has invigorated our business as we execute the biggest operational, leadership, and cultural transformation in our history. On its one-year anniversary, we raise our fiscal 2026 outlook confident in the strength of our turnaround, even as our second half reflects previously-expected headwinds and now-greater consumer-facing investments, as we expect to restore organic sales growth and expand our operating margin for the first time in four years.”
Estee Lauder Companies CEO, on the earnings call
Forward Guidance & Outlook
The company raised its fiscal 2026 full-year outlook. As-reported net sales growth is expected at 3%-5%, with organic net sales growth of 1%-3%. Full-year adjusted diluted EPS is forecasted at $2.05-$2.25 (up 36%-49% YoY), and adjusted operating margin at 9.8%-10.2%. The second half is expected to see low-single-digit organic growth, with higher growth in Q4 vs. Q3 due to a transitory headwind from Beijing/Shanghai airport duty-free retailer changes. Q3 adjusted operating margin is expected to contract approximately 50 basis points due to timing of consumer-facing investments and tariff headwinds. Tariff-related headwinds remain estimated at approximately $100 million for fiscal 2026, mostly in the second half. Net cash flows from operations are projected at $1.1-$1.2 billion, and capital expenditures at approximately 4% of projected sales. The adjusted effective tax rate is expected at approximately 36% for the full year.
EL YoY Financials
EL Revenue by Segment
EL Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.