Estée Lauder CEO Declares Growth Return, Stronger 2027 Ahead

Estée Lauder Companies shares surged in premarket trading Wednesday after the beauty company reported fiscal fourth-quarter 2026 results that beat Wall Street expectations.

Adjusted earnings per share came in at 39 cents, surpassing the 32 cents analysts had expected. The Middle East conflict reduced adjusted EPS by 5 cents. However, tariff refunds provided a benefit of 7 cents.

Net sales rose 6% year over year to $3.63 billion, beating the $3.54 billion analysts had forecast. Organic net sales grew 5%.

CEO Stéphane de La Faverie said Estée Lauder has "reignited growth," with fiscal 2026 organic sales up 3%, accelerating to 5% in the fourth quarter, marking the fourth consecutive quarter of growth.

Looking ahead, the company expects fiscal 2027 organic sales growth to accelerate and raised its adjusted operating margin outlook, signaling confidence that its recovery can gain further momentum.

Sales Growth Broad-Based Across Regions

Disruptions related to the Middle East conflict reduced consolidated sales growth by approximately 1 percentage point. These disruptions also reduced growth in Europe, the UK, and emerging markets by approximately 2 percentage points.

Sales grew across all product categories except hair care, and all geographic regions posted growth.

The Americas returned to growth, led by North America. Results were supported by key marketing campaigns, the timing of shipments around key shopping events, and increased consumer-facing investment.

The region also benefited from an $18 million gain related to the write-off of unused gift card liabilities. This was partially offset by the closure of shop-in-shop operations run by certain specialty multi-retailers.

Prior-year results included $527 million in restructuring, other charges, and intangible asset impairments. These charges totaled $408 million after tax, or $1.12 per diluted share. The company also recorded a $172 million adjustment to the valuation allowance on U.S. deferred tax assets, equivalent to 48 cents per diluted share.

Estée Lauder declared a quarterly cash dividend of 35 cents per share, payable September 15, with a record date of August 31.

Estée Lauder Backs Fiscal 2027 Sales Growth Outlook

For fiscal 2027, Estée Lauder expects adjusted EPS of $3.10 to $3.35, compared with the $3.18 analysts had projected.

The company confirmed its organic net sales growth outlook of 3% to 5%. The company expects stronger growth in the first half, benefiting from earlier product launches, higher travel retail shipments, and easier year-over-year comparisons.

Estée Lauder expects fiscal 2027 sales of $15.5 billion to $15.8 billion, compared with the $15.56 billion analysts had projected.

The company expects continued growth in fragrance and skin care, with makeup returning to growth for the full year. The company also expects more diversified growth across regions.

Estée Lauder does not currently expect the Middle East conflict to have a material impact on fiscal 2027 results.

Adjusted operating margin is expected at 12.7% to 13.5%, up from the prior outlook of 12.5% to 13%. The company forecasts operating cash flow of $1.3 billion to $1.4 billion for the fiscal year.

EL Stock Performance

In Wednesday premarket trading, Estée Lauder shares rose 13.27% to $95.45.