Estée Lauder Companies’ (ELC) has announced its turnaround plan is on track to deliver annual savings at “the high-end” of its target range of between US$0.8bn to $1bn.
The beauty giant, which owns brands MAC Cosmetics and Clinique, first announced its ‘Profit Recovery and Growth Plan’ (PRGP) in November 2023 to boost flagging sales.
This programme was expanded in February last year under the banner, ‘Beauty Reimagined’, with expected costs of between $1.2bn and $1.6bn.
In a fresh update on its progress, ELC said it expects total charges “at the mid-point” of this estimated range.
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“Building on our strong fiscal 2026 first half results, which included increased consumer-facing investments to restore sustainable sales growth, today we announced an important milestone in the PRGP’s restructuring programme,” said Stéphane de La Faverie, President and CEO of ELC.
“We have now approved initiatives to achieve the high-end of the target gross savings range and affirmed we are on track to realise the vast majority of PRGP’s full run-rate benefits in fiscal 2027.
“The PRGP has instilled a strong sense of cost discipline into our organisation that is now embedded in our ways of working.”
In a separate financial filing, ELC said it expects cumulative restructuring costs of approximately $1.367bn up to 31 March 2026.
The total includes additional costs since its previous update on 5 February 2026, which covered the period up to 30 January 2026, where it estimated cumulative costs at $1.2bn.
The subsequent costs are in relation to efforts to “reorganise and simplify its global marketing and creative operating model to make it leaner, faster and more agile, and drive greater efficiency and effectiveness”, ELC said in the filing.
The costs are largely due to severance from layoffs related to these activities.
For the period 31 January to 31 March this year, employee-related costs were $106m, pushing up the total spend related to staff so far as part of the PRGP to $827m.
The company expects to reduce its workforce by 5,800 to 7,000 as part of the restructuring.
All parts of the PRGP are expected to be approved by the end of the 2026 fiscal year and completed by the end of the 2027 fiscal year.
As part of ELC’s efforts to reorganise its global marketing, the company has consolidated its media buying activity under a single agency, WPP.
“With the appointment of WPP as our first-ever global media partner, our ‘One ELC’ operating model is now fully established,” said de La Faverie.
“This more unified and scalable system will enable us to be faster, more agile and efficient, and support unlocking additional growth.
“Together with our execution progress, we are confident that we are on a trajectory to deliver sustainable, profitable long-term growth.”
As part of the new ‘One ELC’ operating model – which sees the company move from regional silos to a more unified global business model – the beauty company has also partnered with Shopify to modernise and streamline its ecommerce.
ELC’s latest update on its turnaround progress comes amid the beauty company’s talks with Puig over a potential merger.