The Estee Lauder Companies has posted a strong start to FY26, reversing last year’s losses despite a challenging global retail environment.
For the quarter ended September 30, net sales rose 4 per cent to US$3.5 billion, with organic sales up 3 per cent.
Gross margin expanded to 73.4 per cent, reflecting operational efficiencies from the company’s Profit Recovery and Growth Plan (PRGP), including streamlined procurement, reduced promotional activity, and lower excess stock and obsolescence costs.
“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 Stephane de La Faverie, president and CEO.
“Encouragingly, we are building momentum across the organization from the significant operational changes we have executed to date to be faster and more agile.”
Skincare remained the company’s largest category, growing around 3 per cent to US$1.575 billion, while fragrance surged 13 per cent to US$721 million, marking the standout performer for the quarter.
In contrast, makeup sales declined roughly 2 per cent to $1.030 billion, primarily driven by Bobbi Brown, and hair care fell about 7 per cent, highlighting ongoing challenges in those segments.
Regionally, Mainland China led growth with a 9 per cent rise to $532 million, with La Mer, Le Labo, and Tom Ford driving share gains across all categories in both physical and online stores.
The broader Asia/Pacific region rose 8 per cent to $873 million. The Americas saw a 2 per cent decline to $1.174 billion, though US skincare and hair care brands fueled growth, while Western Europe posted strong fragrance gains, particularly in France and Spain.
Looking ahead, the company expects 2 to 5 per cent net sales growth, while continuing its PRGP to improve margins.
“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,” added de La Faverie.
