Estée Lauder Earnings 2026: Strong Profit Forecast on Fragrance Demand

Estée Lauder forecast annual profit above many Wall Street estimates on Wednesday, betting its turnaround strategy would sustain demand for luxury fragrances and deliver strong performance in China, according to Reuters. The Estée Lauder earnings 2026 outlook comes as shares of the Clinique and M.A.C owner rose about 18% in early trading after the company also exceeded quarterly results expectations.

The Estée Lauder annual profit forecast follows the collapse in May of merger talks with Jean Paul Gaultier-owner Puig. Resilient spending by affluent and younger customers has boosted demand for the company's luxury fragrances and skincare products, including Le Labo and Balmain Beauty. The company is now aiming for similar momentum in makeup and hair care, categories where net sales were flat and declining, respectively.

CEO Stephane de La Faverie said the company is expanding brands across distribution channels and into new markets, alongside increased consumer-facing investment, as part of its "Beauty Reimagined" strategy.

Le Labo and Tom Ford sales drove 10% growth in net sales during the fourth quarter, with Le Labo's classic collection benefiting from expanded distribution and targeted shopper outreach. Analyst Sky Canaves of eMarketer said prestige fragrance remains a standout category with strong appeal to younger consumers.

Net sales in makeup remained flat overall, though M.A.C's expansion into U.S. Sephora stores helped the category. Hair care net sales declined 1%, primarily due to lower Aveda sales, though products from skincare brand The Ordinary partly offset the drop.

De La Faverie said the company was not satisfied with its performance in makeup and hair care, but planned to apply lessons from its fragrance and Estée Lauder skincare sales growth to accelerate momentum in those categories.

The company recorded a $38 million benefit in cost of sales from tariff refunds received during the fourth quarter of fiscal 2026, which partly offset a full-year gross impact of $102 million in incremental tariffs. The refunds helped counter disruptions linked to the Middle East conflict, which had a dilutive impact on fiscal 2026 earnings per share.

The company anticipates high organic sales growth in China with new and existing products, after increasing consumer-facing investment and reducing discounts in that market, de La Faverie said.

The Estée Lauder FY2027 outlook anticipates adjusted earnings per share in the range of $3.10 to $3.35, with the midpoint above analysts' estimate of $3.18, according to LSEG. Fourth-quarter sales of $3.63 billion also came in ahead of the $3.54 billion estimate, while adjusted quarterly profit of 39 cents per share surpassed the 32-cent estimate.

Nik Modi of RBC Capital Markets said Estée Lauder stock has further upside as the turnaround gains traction, with focus returning to execution now that merger speculation is behind it.

Further financial details are available via Estée Lauder Companies' investor relations page.

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