Key Takeaways
- The beauty company delivered adjusted earnings per share of $0.91, significantly surpassing the $0.65 Wall Street forecast
- Quarterly revenue reached $3.71 billion, marking a 5% increase compared to the same period last year
- Management upgraded full-year adjusted EPS outlook to $2.35–$2.45, exceeding the $2.22 analyst consensus
- An additional 3,000 job eliminations were announced, pushing total workforce reductions to 9,000–10,000 roles
- Shares of EL surged approximately 13% during Friday’s premarket session
Shares of Estée Lauder rallied approximately 13% in premarket activity Friday following the beauty conglomerate’s impressive third-quarter performance and upgraded annual projections.
The Estée Lauder Companies Inc., EL
The company reported adjusted earnings per share of $0.91, substantially exceeding the $0.65 Street estimate. Quarterly revenue totaled $3.71 billion, topping forecasts of $3.69 billion and representing a 5% climb from last year’s $3.55 billion. On an organic basis, net sales expanded 2% year-over-year.
The stronger-than-anticipated results were fueled by robust demand in the fragrance segment, which saw organic net sales climb 10%. High-end brands such as Le Labo, KILIAN PARIS, BALMAIN Beauty, and TOM FORD each delivered double-digit revenue increases.
Meanwhile, skin care revenue remained essentially unchanged, while both the makeup and hair care divisions reported flat organic sales growth during the period.
Chinese Market Drives Momentum
From a regional perspective, Mainland China was a standout performer with 6% organic growth. This marked the company’s third straight quarter of outperforming the broader prestige beauty market in the region.
Priority Emerging Markets recorded double-digit expansion, and three of the company’s four geographic segments showed overall growth.
Adjusted operating margin widened by 360 basis points to 15.0%, compared to 11.4% in the year-ago quarter. Adjusted gross margin improved by 140 basis points to 76.4%.
Vital Knowledge analysts highlighted the operating margin expansion as the most impressive metric in the report, attributing it to aggressive expense management initiatives.
Workforce Reduction Accelerates
Coinciding with the earnings announcement, Estée Lauder revealed plans to eliminate up to 3,000 additional positions worldwide. This expansion brings total anticipated headcount reductions to between 9,000 and 10,000 employees, up from an earlier target of up to 7,000.
At the upper end, these cuts would account for roughly 17.5% of the company’s 57,000-person workforce as of June 2025.
More than 70% of the newly announced reductions will target department store personnel, as the cosmetics giant pivots toward e-commerce and specialty retail partners such as Ulta, Sephora, Amazon, and TikTok Shop.
The restructuring initiative is expected to generate up to $1.2 billion in cost savings.
Chief Executive Stéphane de La Faverie attributed the quarterly gains to the company’s “Beauty Reimagined” transformation plan, highlighting improved momentum in premium markets including China and Europe.
Estée Lauder is also reportedly engaged in discussions regarding a potential merger with Puig, which owns Jean Paul Gaultier. One market observer suggested the expanded job elimination target could be preparation for shedding overlapping positions ahead of a potential transaction.
Full-year adjusted EPS guidance was lifted to a range of $2.35–$2.45, up from the previous $2.05–$2.25 forecast. The company also anticipates organic net sales growth at the upper end of its prior 1%–3% range.
Looking further ahead, Estée Lauder provided preliminary fiscal 2027 guidance calling for organic net sales growth of 3%–5% and an adjusted operating margin of 12.5%–13.0%.
Management emphasized that its current projections assume no worsening of geopolitical conditions, including tariff-related developments and consumer confidence, and no additional business interruptions in the Middle East beyond May 2026.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
