With its travel retail business gaining momentum and expansion into other distribution channels including Amazon (AMZN) Premium Beauty Store and TikTok, Estée Lauder’s investments and cost efficiencies were reflected in a solid performance in the fiscal first quarter as profits more than doubled from a year ago.
“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, Estée Lauder CEO.
The parent company of Clinique, La Mer and Bobbi Brown makeup earned a profit of $0.32 per share versus $0.14 a year ago and $0.14 better than expected. Reflecting net benefits from the Profit Recovery and Growth Plan to reduce promotions and product excess, coupled with a more competitive approach to procure merchandise, adjusted gross margin expanded 60 basis points to 73.3%. Crucially, adjusted operating margin expanded 300 basis points to 7.3%.
With Estée Lauder expanding its presence on platforms like Amazon (AMZN) and TikTok, broadened fragrance distribution, improved sales in China, and double-digit growth in its fragrance luxury brands, total revenue for FQ1 increased 3.6% to a better than expected $3.48B.
For FY26, Estée Lauder (EL) expects profits to improve by 24% to 37% from FY25 to be within a range of $1.87 to $2.07 per share with a midpoint of $1.97, below the estimated $2.09. Net sales are forecasted to increase by 2% to 5%, translating to a range of $14.61B to $15.04B with a midpoint of $14.82B that is above the $14.78B estimate.