The Estée Lauder Cos. Shows Signs of Improvement

The Estée Lauder Cos.’ financial results are starting to improve.

The beauty company, whose brands include namesake Estée Lauder, Clinique, Bobbi Brown and Tom Ford, reported net sales increased 4 percent to $3.5 billion during the first quarter ended Sept. 30, compared with the same period a year earlier and beating estimates of $3.38 billion. Organic net sales rose 3 percent.

Adjusted diluted net earnings per common share increased to 32 cents, up from 14 cents last year. Analysts had predicted 18 cents.

“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,” said Stéphane de La Faverie, president and chief executive officer. “These results reinforce the confidence we have in our fiscal 2026 outlook — a pivotal year — as we restore organic sales growth and expand our operating margin for the first time in four years.”

The company has been working to turn around its fortunes via its new Beauty Reimagined strategy and Profit Recovery and Growth Plan. In February, Lauder revealed plans to ramp up its restructuring program, part of the PRGP, and eliminate between 5,800 and 7,000 positions. Through Oct. 26, 2025, the company has approved initiatives totaling cumulative charges of $852 million and a net reduction of over 4,000 positions.

A breakdown of the numbers by category showed that skin care net sales increased 3 percent, primarily driven by growth from La Mer and Estée Lauder. The increases from both brands reflected higher net sales from the company’s Asia travel retail business, primarily driven by a low prior-year base due to a challenging retail environment — including lower conversion — as well as the company’s prior-year efforts to improve in-trade inventory.

Elsewhere, makeup sales decreased 2 percent, primarily driven by Bobbi Brown; fragrance increased 13 percent on the back of double-digit growth from the company’s luxury brands, and hair care net sales decreased 7 percent.

There was also an improvement in Mainland China, with sales growing 9 percent.

This was partially offset by a low-single-digit decline in North America, primarily reflecting continued challenges in department stores — including store closures related to a retailer bankruptcy, softness in certain retailers and elevated inventory levels for some brands that continued through the quarter.