Key Takeaways
Estée Lauder Companies Inc. (NYSE: EL) saw its stock jump over 11 percent after reporting fiscal third-quarter adjusted earnings of $0.91 per share, decisively beating analyst estimates of $0.66.
"Fiscal 2026 is promising to be the pivotal year we intended, one in which we restore organic sales growth and expand our adjusted operating margin for the first time in four years," Stéphane de La Faverie, President and CEO, said in a statement.
The beauty giant reported net sales of $3.71 billion, a 5 percent year-over-year increase, while organic net sales rose 2 percent. The performance was fueled by double-digit growth in its fragrance category and a high single-digit sales increase in Mainland China, where the company said it gained market share.
In response to the strong results, Estée Lauder raised its fiscal 2026 outlook. It now expects organic sales growth at the high-end of its prior range and adjusted EPS between $2.35 and $2.45, up from a previous forecast of $2.05 to $2.25.
The Fragrance category was a standout performer, with net sales increasing 10 percent on an organic basis, driven by luxury brands like Le Labo, KILIAN PARIS, and TOM FORD. Skin Care net sales were flat, with growth from La Mer and The Ordinary offset by declines in Clinique. Makeup sales were also flat, though the Estée Lauder brand itself saw double-digit growth fueled by its Double Wear foundation line.
Geographically, Mainland China was a key growth engine, with a 6 percent organic sales increase. The company noted it outperformed the prestige beauty market there for the third consecutive quarter. Sales in Europe, the Middle East & Africa (EUKEM) grew 3 percent organically, while The Americas were flat.
The strong quarter and upwardly revised guidance suggest the company's Profit Recovery and Growth Plan is yielding results faster than anticipated. Investors will look to the fourth-quarter report in August for confirmation that momentum can be sustained into fiscal 2027.
This article is for informational purposes only and does not constitute investment advice.
