Estee Lauder Companies, Inc. (NYSE:EL) reported stronger-than-expected quarterly results on Thursday, driven by broad-based demand across regions and categories across its prestige beauty portfolio.
The company also highlighted progress on its global restructuring plan, including significant job cuts, and delivered a more confident outlook, even as shares traded lower ahead of the open.
Quarterly Metrics
The company reported second-quarter adjusted earnings per share of 89 cents, beating the analyst consensus estimate of 83 cents. Quarterly sales of $4.229 billion (+6% year over year) outpaced the Street view of $4.219 billion.
Organic net sales grew 4% year over year.
Mainland China saw a second straight quarter of double-digit retail sales growth and share gains across categories, led by La Mer, TOM FORD, and Le Labo; Japan and the U.S. also delivered share gains, with Makeup and Fragrance leading in Japan and Skin Care/Hair Care and DTC Fragrance up mid-single digits in the U.S.
Western Europe posted Fragrance share gains across France, Spain, and the U.K., while the company gained share across categories and channels for full-year 2025.
Skin Care rose 7% to $2.054 billion, Makeup increased 1% to $1.164 billion, and Fragrance advanced 9% to $812 million.
Quarterly adjusted gross profit soared 6% year over year to $3.235 billion, while adjusted gross margin expanded to 76.5% from 76.1%.
Adjusted Operating Income jumped 32% to $608 million, while adjusted operating margin expanded to 14.4% from 11.5%.
Estee Lauder exited the quarter with cash and equivalents worth $3.082 billion.
Restructuring Program
“In this pivotal year, Beauty Reimagined has invigorated our business as we execute the biggest operational, leadership, and cultural transformation in our history,” said Stéphane de La Faverie, President and CEO.
The company is transforming its global operating model under the PRGP by consolidating service providers, expanding outsourcing and standardizing processes using advanced technology.
The restructuring is expected to result in $1.2 billion–$1.6 billion in pre-tax charges and generate annual gross benefits of $0.8 billion–$1.0 billion.
The program includes workforce rightsizing, process simplification, outsourcing of select services and changes to go-to-market and selling models.
The company expects a net reduction of 5,800–7,000 positions, with approvals completed by the end of fiscal 2026.
As of late January 2026, initiatives covering over 80% of expected benefits, charges and job reductions have been approved.
Dividend
The company announced a quarterly dividend of 35 cents per share on its Class A and Class B Common Stock, payable in cash on March 16.
Outlook
The firm raised its fiscal 2026 adjusted earnings forecast to $2.03-$2.23 per share from $1.90-$2.10, compared with analysts’ estimates of $2.15.
It raised its fiscal 2026 sales forecast to $14.756 billion–$15.042 billion from $14.613 billion–$15.042 billion, compared with analysts’ estimates of $14.934 billion.
The company continues to expect tariff-related headwinds to impact fiscal 2026 profitability by approximately $100 million, mostly in the second half.
EL Price Action: Estee Lauder shares were down 12.07% at $105.17 during premarket trading on Thursday, according to Benzinga Pro data.
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