Estée Lauder Raises Fiscal 2027 Outlook After Organic Sales Accelerate

The Tip Desk · November 2, 2026 · 4 min read

Organic net sales rose 6% in the quarter ended September 30, 2026, and the company lifted its full-year organic-growth range to 4.0% to 5.5%.

The Estée Lauder Companies (EL) reported net sales of $3.715 billion for the three months ended September 30, 2026, up 7% from $3.481 billion a year earlier. Organic net sales, excluding restructuring-related returns, acquisitions, divestitures, brand closures and currency, rose 6% to $3.696 billion.

That organic pace was faster than the 2% organic increase in the fiscal 2026 third quarter ended March 31, 2026, when as-reported sales had risen 5%. President and CEO Stéphane de La Faverie said growth is accelerating and that the company is raising its fiscal 2027 outlook on sales, margin and earnings.

Profitability widened with the sales recovery. As-reported gross margin expanded 230 basis points to 75.7% from 73.4% a year earlier. Adjusted gross margin expanded 240 basis points to 75.7% from 73.3%. The company said the expansion reflected net benefits from cost and operational efficiencies under its Profit Recovery and Growth Plan, sales leverage and the net benefit of strategic pricing that offset inflation.

As-reported operating margin expanded 610 basis points to 11.0% from 4.9%. Adjusted operating margin expanded 480 basis points to 12.1% from 7.3%. Operating income rose to $408 million from $169 million; adjusted operating income rose 76% to $449 million from $255 million. The company said the as-reported operating-margin gain also reflected a $45 million year-over-year decrease in restructuring and other charges. Diluted earnings were $0.64 a share, compared with $0.13; adjusted diluted earnings were $0.72 a share, compared with $0.32.

Fragrance was the fastest-growing category. Net sales rose 19% to $861 million from $721 million, or 20% organically, driven by double-digit growth from Luxury Brands—Le Labo, TOM FORD, Jo Malone London and KILIAN PARIS—and from Estée Lauder. Fragrance operating income rose 93% to $166 million from $86 million.

Skin Care net sales rose 5% to $1.651 billion from $1.575 billion, or 4% organically, led by La Mer and The Ordinary. Skin Care operating income rose 40% to $262 million from $187 million. Makeup net sales rose 2% to $1.048 billion from $1.030 billion, or 1% organically, with M·A·C growth partly offset by an Estée Lauder decline; the category swung to operating income of $3 million from a $15 million loss. Hair Care net sales were essentially unchanged at $128 million from $129 million, with The Ordinary growth offset by an Aveda decline tied to supply-chain logistics; Hair Care swung to operating income of $5 million from a $12 million loss.

Every geographic region grew. Asia/Pacific net sales rose 9% to $952 million from $873 million, or 10% organically, led by Asia travel retail including Beijing and Shanghai airports and Hainan. Asia/Pacific operating income rose 73% to $259 million from $150 million. Mainland China net sales rose 15% to $614 million from $532 million, or 9% organically after a 7% currency drag; operating margin rose to 5.2% from 2.3% and operating income rose to $32 million from $12 million. The Americas net sales rose 5% to $1.227 billion from $1.174 billion, or 4% organically; operating income rose 31% to $114 million from $87 million. EUKEM net sales rose 2% to $923 million from $901 million, or 4% organically; operating margin rose to 4.8% from 0.7% and operating income rose to $44 million from $6 million.

The company raised its fiscal 2027 full-year outlook, which covers the twelve months ending June 30, 2027. It now assumes organic net sales growth of 4.0% to 5.5%, ranging from the midpoint to above the high end of the previously communicated 3% to 5% range. Adjusted operating margin is now expected at 12.9% to 13.7%, up from 12.7% to 13.5%. Adjusted diluted earnings are now expected at $3.20 to $3.45 a share, up from $3.10 to $3.35. Operating cash flow is now expected at $1.4 billion to $1.5 billion, up from $1.3 billion to $1.4 billion.

The company said the higher organic-sales outlook assumes a greater increase in the first half than the second, reflecting more new-product launches earlier in the year, an increase in travel-retail shipments and a lower first-half travel base, as well as continued Fragrance and Skin Care growth, a return to full-year Makeup growth and more diversified regional growth, with stronger EUKEM growth expected in the second half. It said it does not expect the conflict in the Middle East to have a material impact on fiscal 2027 results.

On October 5, 2026, the company completed the acquisition of the remaining equity interest in Mountain Valley Springs India Private Limited, owner of Forest Essentials. The brand’s fiscal 2027 results are not expected to have a material impact on consolidated net sales or diluted earnings per common share.

The company declared a quarterly dividend of $0.35 a share on Class A and Class B common stock, payable December 15, 2026.