Estée Lauder’s Sales Decline in Fourth Quarter, Tariffs to Impact Profitability by $100 Million Next Year

The Estée Lauder Cos. saw net sales slide 12 percent in its fourth quarter and the company expects tariff-related headwinds to impact fiscal 2026 profitability by about $100 million.

For the three months ended June 30, net sales fell 12 percent to $3.4 billion, the beauty group said Wednesday. This was a touch above analysts’ expectations.

Within that, sales fell 17 percent in skin care, the majority of the business, primarily driven by Estée Lauder and La Mer, reflecting the challenges in the company’s Asia travel retail business.

Makeup net sales decreased 12 percent on the back of lower net sales from Estée Lauder, declines across all geographic regions from MAC and lower net sales in North America.

Net sales declined 15 percent in hair care due to ongoing brick-and-mortar challenges in North America, which more than offset the benefit from the fiscal 2025 fourth-quarter launch of Aveda in Amazon’s U.S. Premium Beauty store.

One bright spot was fragrance, where net sales increased 2 percent thanks to Le Labo and Jo Malone London.

Net sales declined in all geographic regions, primarily driven by declines in the company’s global travel retail business and North America.

The net was $546 million and diluted net loss per common share was $1.51, compared to $284 million and 79 cents, respectively, the prior year.

Stéphane de La Faverie, president and chief executive officer, said, “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.”

Providing only an annual forecast for fiscal 2026, sales growth is forecast between flat and 3 percent, an improvement from 2025 when annual sales dropped 8 percent.

Lauder expects tariff-related headwinds to impact fiscal 2026 profitability by about $100 million.

Adjusted earnings are expected to come in between $1.90 and $2.10. Analysts had pencilled in $2.21.

The company has been working to turn around its fortunes via a cost cutting program. In February, Lauder revealed plans to ramp up its restructuring program, part of the so-called profit recovery plan, and will eliminate between 5,800 and 7,000 positions.