TLDR
- Estée Lauder surpassed Q3 expectations with adjusted EPS of $0.91, topping the $0.65 forecast
- Quarterly revenue reached $3.71 billion, representing a 5% increase compared to last year
- Annual adjusted EPS forecast elevated to $2.35–$2.45, surpassing the $2.22 Wall Street estimate
- Additional workforce reductions of up to 3,000 positions announced, pushing total cuts to 9,000–10,000 roles
- Shares of EL soared approximately 13% during premarket hours Friday
Shares of Estée Lauder climbed approximately 13% in early Friday trading following the beauty conglomerate’s announcement of third-quarter results that exceeded analyst projections and an upward revision to its annual forecast.
The Estée Lauder Companies Inc., EL
The company delivered adjusted earnings per share of $0.91, significantly outpacing the analyst projection of $0.65. Quarterly sales totaled $3.71 billion, surpassing the $3.69 billion estimate and marking a 5% increase from the previous year’s $3.55 billion. On an organic basis, net sales expanded 2% year-over-year.
The quarterly outperformance was fueled by exceptional results in the fragrance segment, where organic net sales climbed 10%. Premium labels such as Le Labo, KILIAN PARIS, BALMAIN Beauty, and TOM FORD each recorded double-digit revenue increases.
[[EMBED_0]]Skin care revenue remained essentially unchanged, while both the makeup and hair care divisions reported flat organic performance during the three-month period.
China Shows Continued Momentum
From a regional perspective, Mainland China contributed 6% organic expansion. This marked the third straight quarter in which Estée Lauder’s performance exceeded that of the broader prestige beauty sector in the region.
Priority Emerging Markets registered double-digit advancement, and three of the company’s four geographical segments posted overall growth.
Adjusted operating margin widened by 360 basis points to reach 15.0%, compared to 11.4% in the corresponding period last year. Adjusted gross margin improved by 140 basis points to 76.4%.
Vital Knowledge analysts highlighted the operating margin expansion as the report’s most impressive element, attributing the improvement to aggressive expense management initiatives.
Workforce Reduction Strategy
Coinciding with the quarterly announcement, Estée Lauder revealed intentions to eliminate up to 3,000 additional positions worldwide. This brings the cumulative planned workforce reduction to between 9,000 and 10,000 roles, up from the previously announced target of up to 7,000.
At the upper limit, these reductions would account for approximately 17.5% of the company’s total employee base of 57,000 as reported in June 2025.
Over 70% of the newly announced cuts will affect department store personnel, reflecting the company’s strategic pivot toward digital platforms and specialty retail partners such as Ulta, Sephora, Amazon, and TikTok Shop.
The restructuring initiative is projected 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 results in luxury segments across China and Europe.
Estée Lauder is currently engaged in discussions regarding a potential merger with Puig, which owns Jean Paul Gaultier. One market observer suggested the expanded workforce reduction target could indicate preparations to eliminate redundant positions on Estée Lauder’s side in anticipation of a possible transaction.
The company elevated its full-year adjusted EPS guidance to a range of $2.35–$2.45, up from the earlier projection of $2.05–$2.25. Management also indicated that organic net sales are expected to land at the upper end of the previously stated 1%–3% growth range.
Looking ahead to fiscal 2027, Estée Lauder provided preliminary expectations calling for organic net sales growth of 3%–5% and an adjusted operating margin between 12.5% and 13.0%.
The company emphasized that its current projections assume stable geopolitical conditions, including no adverse tariff developments or deteriorating consumer confidence, and no additional business interruptions in the Middle East beyond May 2026.
