Key Takeaways:
- Luxury skincare and fragrance drive Estée Lauder’s organic growth rebound.
- Margin expansion signals early success from the Profit Recovery and Growth Plan.
- US softness persists as Asia and travel retail outperform expectations.
The Estée Lauder Companies (ELC) set a solid tone for fiscal year 2026 (FY26), reporting net sales of $3.48 billion in the first quarter (Q1) ending September 30. This figure grew 4% year over year (YoY), as organic net sales increased 3%, beating analyst expectations. On the earnings call, Stéphane de La Faverie, President and CEO of ELC, stated that the growth was a “significant sequential acceleration” from the 13% decline in the fourth quarter of FY25. The company reiterated its FY26 full-year outlook, signaling confidence that its Beauty Reimagined strategy is taking root, supported by launches on TikTok Shop, a newly announced partnership with Shopify, and the entry of top brand MAC Cosmetics into Sephora.
Growth Engines and Brand Insights
Fragrance was the company's strongest growth category, with a 13% organic rise, benefiting from high-single to strong double-digit expansion across luxury fragrance brands including Le Labo, Tom Ford, and Jo Malone London.
Skincare rose 3% organically to $1.575 billion in net sales, bolstered by luxury brand dominance. La Mer and Estée Lauder led the way, supported by innovation in Revitalizing Supreme+, Re-Nutriv, and Advanced Night Repair. The company cited this strength as a driver of growth in Asia, with a low prior-year base.
The makeup category remains under pressure, with net sales dropping 2% organically to $1.030 billion, amid a strategic pullback in selected segments and the...
