The Estée Lauder Companies today (1 May) posted a +5% year-on-year increase in reported (+2% organic) third-quarter sales to US$3,712 million for the period ended 31 March (we’ll bring you more after the ELC earnings call later today).
“Our third-quarter results extend strong year-to-date performance, driven by Beauty Reimagined,” said President and CEO Stéphane de La Faverie.
“In the first nine months of fiscal 2026, organic sales for fragrance rose double-digits, while three of four regions grew, led by high single-digit growth in Mainland China where we outperformed prestige beauty to gain share.
“With momentum across all five action plan priorities of Beauty Reimagined, today we raised our fiscal 2026 outlook, now expecting organic sales growth at the high-end of the prior range and adjusted operating margin expansion to approach 300 basis points, bolstered in part by adjusted gross margin expansion.”
de La Faverie added, “Fiscal 2026 is promising to be the pivotal year we intended, one in which we restore organic sales growth and expand our adjusted operating margin for the first time in four years.
“Looking ahead to fiscal 2027, we are confident in our improving trajectory and realising the benefits of One ELC, especially its One Operating Ecosystem which will be fully deployed.
“Our preliminary view is to accelerate organic sales growth and for adjusted operating margin to approach 13%, albeit in an uncertain geopolitical and macroeconomic environment.”
Middle East travel retail hit by regional war; Tom Ford struggles
ELC is raising its fiscal 2026 full-year outlook while remaining cautious amid ongoing geopolitical and macroeconomic uncertainty, including business disruptions in the Middle East and continued headwinds in key markets, particularly in the West.
“Business disruptions in the Middle East, including domestic markets and travel retail locations in the region, are assumed to have a greater impact on the Company’s fiscal 2026 fourth-quarter results relative to the third quarter, which benefitted from shipments for key shopping moments made prior to the onset of the conflict,” ELC said.
“For the fiscal 2026 fourth quarter the Company expects an unfavourable impact of approximately 2% to its sales growth and a dilutive impact to diluted net earnings per common share of US$.06.”
In travel retail terms, the company also noted the Tom Ford brand had experienced lower than expected growth within key geographic regions and channels, including Mainland China, Asia travel retail and Hong Kong SAR. ✈
