The Estée Lauder Companies closes its 2026 fiscal year with signs of recovery. The American beauty group recorded a net profit of 182 million dollars (156 million euros), compared to losses exceeding 1,000 million dollars in the previous year. Revenues reached 15,049 million dollars (12,967 million euros), a 5% year-on-year increase and above market expectations.
The result represents a change in trend for one of the major groups in the beauty industry, after several years marked by pressure on consumption, especially in China, and by a decline in sales. The company also recorded an operating profit of 780 million dollars (672 million euros).
China regains prominence
The Chinese market is among the main drivers of this recovery. Estée Lauder's revenue in China grew by 12%, to 3,058 million dollars (2,634 million euros).
Sales also advanced in the rest of the main regions. In Europe, United Kingdom, Africa and the Middle East, revenues increased by 6%, to 3,794 million dollars (3,270 million euros), while Asia Pacific grew by 4%, to 3,746 million dollars (3,227 million euros). In America, revenue advanced by 1%, to 4,463 million dollars (3,845 million euros).
Fragrances lead growth by categories
By categories, fragrances is once again one of the major drivers of the business. The division increased its revenues by 12%, to 2,779 million dollars (2,394 million euros). Skincare, the group's main business by volume, generated 7,338 million dollars (6,323 million euros), up 5%, while makeup grew by 2%, to 4,267 million dollars (3,676 million euros).
Hair performance was flatter: the division recorded 565 million dollars (486 million euros), practically in line with the previous year.
A fourth quarter that confirms the change in trend
The last quarter of the fiscal year also reflects this improvement. Estée Lauder recorded revenues of 3,627 million dollars (3,125 million euros), up 6% year-on-year. Although the group ended the quarter with net losses of 116 million dollars, the figure represents a significant improvement compared to the 546 million dollars in losses in the same period of the previous year.
The market reaction was immediate: Estée Lauder shares rose around 7% in pre-market trading on Wall Street, reflecting the positive reception of the results.
The recovery plan enters a new phase
The results come at a key moment for the group, which is immersed in a broad transformation process. Under the leadership of Stéphane de La Faverie, Estée Lauder has committed to recovering the attractiveness of its brands, accelerating the launch of innovations, and strengthening its presence in higher-growth channels, including Amazon and TikTok Shop. The company has also cut approximately 10,000 jobs as part of its profitability recovery plan.
Looking ahead to fiscal year 2027, the group maintains its organic sales growth forecast and has raised its adjusted operating margin expectations. The strategy involves diversifying growth by both categories and markets, with a special focus on accelerating business in North America.
The company also keeps the door open for corporate operations that contribute to diversifying its growth. A possibility that gains special interest after the conversations held this spring with Puig for a potential combination of both groups ended without an agreement.