Following a period of lessened drive, The Estée Lauder Companies revealed better-than-anticipated sales for the initial quarter of its fiscal year.
Sales spanning July through September 2025 totaled USD3.48 billion, indicating a 4% increase from the previous year, the company communicated in a statement on Thursday, October 30. This number exceeded analysts’ predictions of USD3.38 billion.
Fragrances Power Growth
Fragrance net sales ascended 14% year over year, impelled by Tom Ford innovations — encompassing the launches of Voyager Oud and Black Orchid Reserve, represented by Tilda Swinton — alongside robust results from Jo Malone London’s fragrances.
Skincare net sales saw a 3% uptick, while makeup sales experienced a 1% decrease, and haircare sales diminished by 7%.
Rebound in China?
The company, which possesses Clinique, The Ordinary, Kilian Paris, and M·A·C, had contended in recent periods amidst sluggish consumer spending, notably in China. Regarding the latter, the group is observing advancement.
During the first quarter of its fiscal year, The Estée Lauder Companies disclosed a 9% elevation in sales within China compared to the corresponding period the prior year, fueled partly by remarkable performances from La Mer, Le Labo, and Tom Ford.
“Expansion in Mainland China, largely motivated by innovation and current offerings,” along with “focused augmented consumer engagement” the company expressed.
Additionally, travel retail sales “demonstrated an amelioration over last year’s unfavorable pattern,” remarked the company’s President and CEO, Stéphane de La Faverie, during an address with investors.
Projections
The group had also made public a restructuring strategy in February, the ultimate expenditure of which is anticipated to range between USD1.2 and USD1.6 billion before taxes. It also intended to eliminate 5,800 to 7,000 positions by the conclusion of 2026.
“We experienced a promising commencement to fiscal 2026 (…), acquiring prestige beauty market share in select crucial strategic focus areas, and enhancing profitability,” emphasized de La Faverie. “These outcomes bolster the assurance we possess in our fiscal 2026 outlook—a critical year—as we reinstate organic sales expansion and widen our operating margin for the initial time in four years,” he appended.
For fiscal 2026, Estée Lauder persists in forecasting a 2% to 5% increment in net profit per share. The company also cautioned that novel trade levies could curtail future earnings by almost USD100 million, but conveyed it is keenly monitoring trade policy alterations and enacting procedures to alleviate potential repercussions.
“The Company has put into action an array of measures,” including “further streamlining its regional manufacturing presence to position production closer to the consumer,” the group added.