Estee Lauder’s third-quarter results reflect the mixed progress of its Beauty Reimagined strategy, with CEO Stephane de La Faverie citing share gains in the US, China, and Japan as signs of momentum.
However, overall performance for the quarter remained weak, with net sales down 10 per cent to US$3.6 billion, organic sales falling 9 per cent, and operating margin dropping to 8.6 per cent.
“Our global business organic sales trends, excluding travel retail, showed sequential improvement,” continued de La Faverie.
“With the strategic reset of our travel retail business well underway, and provided there is meaningful resolution of the recently enacted tariffs to mitigate potential related negative impacts, we are confident in our ability to return to sales growth next year.”
By category, Skincare sales fell 11 per cent, driven by declines from Estee Lauder and La Mer in Asia’s travel retail sector.
Makeup sales dropped 7 per cent, with Mac impacted by fewer new product shipments and retail destocking, while Estee Lauder saw weakness in face makeup.
Fragrance sales declined just 1 per cent, with growth from luxury brands, particularly Le Labo, partially offsetting softness from Clinique and Estee Lauder in Asia-Pacific.
Hair care sales decreased 10 per cent, mainly due to Aveda’s continued challenges in salon and freestanding store channels.
Regionally, sales in the Americas declined 5 per cent, with North America facing lower retailer orders, inventory adjustments, and cautious consumer sentiment. However, the company’s brands saw a modest increase in retail sales, aided by an expanded presence on Amazon’s Premium Beauty store.
In Europe, the Middle East and Africa, net sales were down 16 per cent, impacted by a decline in global travel retail and continued retail softness in the UK.
Asia-Pacific posted a smaller 1 per cent decline, as drops in Hong Kong and Korea were partially offset by growth in Mainland China.
Despite the broader market pressures, Estee Lauder said it will still continue to broaden consumer coverage.
For the third quarter, the company expanded its fragrance business with 10 new freestanding stores globally; opened seven new Shopee stores in Southeast Asia; and launched Estee Lauder and The Ordinary on TikTok Shop in Thailand. The Ordinary also debuted on Amazon’s US Premium Beauty and in Turkey.
Looking ahead, the company said it is closely monitoring macroeconomic conditions, geopolitical risks, and regulatory factors, including tariffs and inflation.
