The Estée Lauder Companies (EL) signaled that its multi-year turnaround is building momentum, posting 5% reported sales growth and 66% diluted EPS growth for fiscal 2026 as management outlined an optimistic path for the coming year during a presentation at Barclays’ 19th Annual Global Consumer Conference on September 9, 2026.
President and CEO Stéphane de La Faverie and CFO Akhil Shrivastava described fiscal 2026 as a pivotal year marked by operating margin expansion of 320 basis points and gross margin improvement of 150 basis points to 75.49%. Cash flow from operations rose 39%, while consumer-facing investment increased 7%.
China, a historically vital market for the beauty giant, posted 9% net sales growth in fiscal 2026, supported by six consecutive quarters of market share gains. Travel retail, a key channel disrupted during the pandemic, has been reset to 15% of total business, with Hainan returning to double-digit growth as Chinese tourists increasingly shop at regional hubs including Korea, Hong Kong and Thailand.
Among individual brands, M·A·C stood out, rebounding from a high single-digit organic sales decline in fiscal 2025 to a mid-single-digit increase in fiscal 2026, recapturing the No. 1 U.S. market share position in the fourth quarter. The brand is expanding through Sephora in the U.S., rolling out on TikTok Shop across the U.S., U.K. and Germany, and launching on Shopify in the U.S., while freestanding stores are being rationalized for some labels even as luxury counters for Le Labo, KILIAN PARIS and Frédéric Malle are growing.
KILIAN PARIS organic sales growth accelerated by 19 percentage points from fiscal 2025 to fiscal 2026. Six brands now sit in the company’s “billion dollar club” — Clinique, Estée Lauder, La Mer, M·A·C, Jo Malone London and TOM FORD — with The Ordinary approaching that threshold.
Regionally, Korea saw 11 brands in growth with nine posting double-digit increases in the final quarter, while Europe showed particular strength in Italy, Spain, France and Germany. U.S. market growth was temporarily dampened in July after Amazon shifted Prime Day to June but returned to single-digit growth in August.
The company’s PRGP restructuring program concluded on June 30, 2026, with full annualized benefits expected by 2028. A North America sales force revamp took effect September 1, and a unified global media model with WPP launched April 1. The Shanghai R&D center, opened in March 2023, now generates 30% of the company’s global innovation, with AI being deployed to predict testing outcomes and accelerate formulation development.
Looking ahead to fiscal 2027, Estée Lauder guided for 3% to 5% organic sales growth, operating margin expansion of 150 to 230 basis points to a range of 12.7% to 13.5%, and diluted EPS growth of 24% to 34%. Management said combined margin growth across fiscal 2026 and 2027 is expected to total approximately 500 basis points.
Shares of Estée Lauder were trading around $102.18, down $1.68 or 1.62%, on the day of the conference. The company’s P/E ratio stood at 197.
