Estée Lauder Companies Inc. reported fiscal 2026 first‑quarter results, showing net sales of $3.48 billion, a 4 % increase from $3.36 billion a year earlier. Organic net sales grew 3 % to $3.46 billion, while gross profit rose 5 % to $2.55 billion, lifting the gross margin to 73.4 % from 72.4 % in the prior year.
Operating income turned positive at $169 million, up from a $121 million loss in the same quarter a year earlier, giving an operating margin of 4.9 %. Adjusted operating income, excluding restructuring and other charges, reached $255 million, a 77 % increase, and the adjusted operating margin climbed to 7.3 %. Diluted earnings per share were $0.13, compared with a loss of $0.43 a year earlier, and adjusted diluted EPS rose to $0.32 from $0.14.
The company declared a quarterly dividend of $0.35 per share, payable on December 15 2025, an increase from the $0.30 dividend paid in the previous quarter.
Segment performance varied: fragrance led category growth with a 13 % sales increase, driven by new launches and luxury brands; skincare sales rose 3 %; makeup sales fell 2 %, largely due to a decline in Bobbi Brown; and hair care sales declined 7 %, mainly because of Aveda’s strategic changes. Geographically, Asia/Pacific and China posted strong growth of 9 % and 8.5 % respectively, offsetting weaker performance in the Americas, while Western Europe saw modest fragrance gains.
Management highlighted the “Beauty Reimagined” strategy and the Profit Recovery and Growth Plan (PRGP) as key drivers of the turnaround. The PRGP is expected to deliver $800 million to $1 billion in annual gross benefits, supporting a return to double‑digit operating margins in the coming years. The company is also implementing a workforce reduction of 5,800 to 7,000 positions by the end of 2026, with restructuring charges estimated at $1.2 billion to $1.6 billion before taxes.
The company cautioned that new trade tariffs could reduce earnings by up to $100 million, and that ongoing supply‑chain adjustments and competitive pressures in key markets may present short‑term challenges.
Overall, the results signal a turnaround for Estée Lauder, with revenue growth, margin expansion, and a shift back to profitability, while the company continues to invest in high‑growth categories and digital channels to sustain momentum.
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