The Estée Lauder Companies (ELC) exceeded market expectations in the fourth quarter of fiscal 2026, ended June 30, with fragrance-led growth helping to accelerate its turnaround under CEO Stéphane de La Faverie. The company also issued an adjusted earnings forecast for fiscal 2027 above Wall Street expectations, signaling confidence in the execution of its “Beauty Reimagined” strategy.
Fourth-quarter net sales rose 3% to USD 3.63 billion, while organic sales increased 5%, outperforming analysts’ expectations of USD 3.54 billion. Adjusted diluted earnings per share reached USD 0.39, ahead of the USD 0.32 expected by analysts.
For the full fiscal year ended June 30, 2026, net sales increased 3% to USD 15.0 billion, with organic growth also reaching 3%.
Fragrance remains the growth engine
Prestige fragrance continued to be ELC’s strongest-performing category, with 10% organic growth in the fourth quarter, driven by brands including Le Labo and Tom Ford.
Le Labo benefited from expanded distribution and targeted efforts to reach new consumers, reinforcing what de La Faverie described as a successful playbook built around premium positioning, selective expansion, innovation, and stronger consumer-facing investment.
Industry analysts continue to view prestige fragrance as one of beauty’s most resilient segments, particularly among younger consumers across genders, where ELC’s portfolio of luxury and niche-inspired brands remains well positioned.
Makeup and hair care remain recovery priorities
While fragrance and skincare continued to outperform, ELC acknowledged that makeup and hair care still require improvement.
Makeup sales remained flat in the quarter, although M·A·C’s expansion into Sephora stores in the United States delivered strong results and helped boost brand visibility. Stéphane de La Faverie described the rollout as a “blockbuster success” across several markets, including South Korea and the U.S., adding that further innovation and channel expansion remain priorities.
Hair care sales declined 1%, primarily reflecting weaker performance at Aveda, although growth at The Ordinary helped partially offset the decline.
China takes center stage
A key pillar of ELC’s outlook is renewed confidence in China, where the group expects high organic sales growth supported by new product launches and increased consumer investment.
ELC said it has deliberately reduced promotional activity in the market, cutting back on discounts and special offers in favor of strengthening brand equity.
Outlook beats expectations
For fiscal 2027, ELC expects adjusted diluted earnings per share between USD 3.10 and USD 3.35, with the midpoint above analysts’ consensus estimate of USD 3.18.
The group also disclosed a US$38 million tariff refund benefit recorded in the fourth quarter, which partially offset an estimated US$102 million full-year impact from incremental tariffs. However, ELC noted that geopolitical disruptions, including the Middle East conflict, weighed on fiscal 2026 earnings.