Estée Lauder Companies sales have beat estimates in the first quarter of fiscal 2026 in the biggest signal to date that the beauty giant’s turnaround efforts are taking hold.
Net sales grew 4% in the three months to September 30, reaching US$3.48bn, while organic sales were up 3%. ELC’s share price rose as much as 6% in pre-market trading.
Analysts had expected sales of $3.38bn from the beauty giant, according to consensus estimates.
Fragrance net sales grew 13% compared to the same period last year, helped by Tom Ford innovation, which saw the launch of Voyager Oud and Black Orchid Reserve, fronted by Tilda Swinton, as well as Jo Malone London’s colognes.
Skin care net sales rose 3%, primarily driven by La Mer and the Estée Lauder own brand, while make-up net sales fell 2%, primarily driven by Bobbi Brown.
This reflected “unfavourable comparison” to last year, when there were higher new product launch shipments, as well as a reduction of colour palettes in the eye subcategory.
Hair care sales fell 7%, largely due to Aveda which reduced online promotional activities and exited from underperforming spots, including some of its own standalone stores, as well softness in salon channels.
This was despite the brand’s launch on Amazon’s US Premium Beauty store and debut of its new Miraculous Oil product.
“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,” said Stéphane de La Faverie, President and CEO of ELC.
“Encouragingly, we are building momentum across the organisation from the significant operational changes we have executed to-date to be faster and more agile.
“These results reinforce the confidence we have in our fiscal 2026 outlook – a pivotal year – as we restore organic sales growth and expand our operating margin for the first time in four years.”
De La Faverie took the helm of ELC at the start of the year and introduced the consumer-focused ‘Beauty Reimagined’ strategy to get the company back on track.
This has included cutting 7,000 jobs and shaking up its leadership team, as well as launching several of its brands on Amazon, including Clinique, Aveda, The Ordinary, Estée Lauder and Origins.
“Operational efficiencies” from ELC’s Profit Recovery and Growth Plan (PRGP), which is part of ‘Beauty Reimagined’, drove an improvement in gross margins, the company said in a statement.
This included a more competitive approach to procurement, along with reductions in promotional activity and excess and obsolescence.
These offset the unfavourable impacts of inflation and foreign exchange transactions, it added.
ELC noted prestige beauty share gains in key markets, including La Mer, Le Labo and
Tom Ford in Mainland China; as well as skin care in the US led by The Ordinary, Estée Lauder and hair care.
Launches and innovations in the period included The Ordinary’s Sulfur 10% Powder-to-Cream Concentrate spot treatment, MAC Cosmetics’ Lipglazer Glossy Liner and Skinfinish Lightstruck Liquid Highlighter, and Tom Ford’s Oud Voyager fragrance.
In addition to expansion on Amazon, ELC has also ramped up its presence on TikTok Shop, the latest financial results reveal.
MAC Cosmetics and Clinique debuted on the shopping platform in the US in July, followed by Dr Jart+ in October.
The Ordinary landed on TikTok Shop in Malaysia and Singapore in August and September respectively.
Meanwhile, ELC has also announced that MAC Cosmetics is set to launch at Sephora’s US stores and website in early 2026.
Earlier this week, the beauty giant announced a partnership with retail platform Shopify to improve the customer shopping experience.
Related content:
-
Analysis: Estée Lauder Companies’ underperforming brands amid portfolio review
-
Exclusive: Estée Lauder Companies’ game plan to dominate the UK beauty market
-
What’s behind Estée Lauder’s analyst upgrades by Deutsche Bank, HSBC and JP Morgan?
- From Estée Lauder to Chanel: The beauty industry’s biggest job cuts of 2025