Estée Lauder Companies Inc. reported fiscal 2026 third‑quarter revenue of $3.71 billion, a 2% increase in organic sales to $3.61 billion and a 2% year‑over‑year rise in revenue. Adjusted earnings per share reached $0.91, beating the consensus estimate of $0.65 by $0.26, a 40% beat that reflects the company’s disciplined cost management and a favorable product mix. The quarter’s revenue growth was driven by double‑digit gains in the fragrance segment, while skin‑care and makeup remained flat, and a 6% organic rise in Mainland China helped offset modest headwinds elsewhere.
Adjusted gross margin expanded to 76.4%, up 140 basis points from the prior year, and adjusted operating margin grew to 15.0%, a 360‑basis‑point lift. The margin gains stem from the ongoing Profit Recovery and Growth Plan, which has delivered cost savings and operational efficiencies, and from a shift toward higher‑margin fragrance and premium skincare products. The company’s ability to maintain pricing power in these categories has helped offset inflationary pressures in raw materials and logistics.
Segment performance highlights include a double‑digit increase in fragrance sales, driven by strong demand for flagship brands, while skin‑care remained flat with La Mer and The Ordinary posting growth and Clinique and Origins declining. Makeup sales were essentially unchanged, with Estée Lauder brand growth offset by declines in Clinique and Too Faced. The 6% organic growth in Mainland China represents a high‑single‑digit expansion that has helped the company regain market share in a key growth region.
Management raised its full‑year adjusted EPS outlook to $2.35–$2.45 per share, up from the prior $2.03–$2.23 range, and narrowed its revenue guidance to $14.899 billion, a slight tightening from the previous $14.9 billion estimate. The guidance lift signals confidence in the continued momentum of the “Beauty Reimagined” strategy and the resilience of high‑margin categories, while the modest revenue narrowing reflects a cautious view of near‑term macro headwinds.
The company also announced an expanded workforce‑reduction program targeting 9,000 to 10,000 job cuts, an increase of 3,000 to 4,000 positions from the earlier 5,800–7,000 target. The expanded plan is part of the Profit Recovery and Growth Plan and is expected to generate $1 billion to $1.2 billion in annual benefits by fiscal 2027, reinforcing the company’s commitment to cost discipline and long‑term profitability.
Investors reacted positively to the results, with the stock surging in pre‑market trading. Analysts highlighted the significant margin expansion, the strong earnings beat, and the raised full‑year guidance as key drivers of the market’s enthusiasm. The company’s ability to deliver a robust earnings beat while simultaneously raising guidance and expanding margins underscores the effectiveness of its turnaround strategy and bolsters confidence in its future performance.
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