Estée Lauder Raises Outlook After Solid Q4 Performance Driven by Fragrances
Estée Lauder Companies (ELC) reports better-than-expected Q4 results, driven by strong fragrance sales, and raises its profit forecast for 2027.
The Estée Lauder Companies (ELC) has reported a net sales increase of 3% to $3.63 billion in the fourth quarter of its 2026 fiscal year, which ended on June 30. This performance was driven by the dynamism of fragrance sales, contributing to the acceleration of the company's turnaround under the leadership of CEO Stéphane de La Faverie.
The company's net sales for the full fiscal year 2026 increased by 3% to $15.0 billion, with organic growth also reaching 3%.
Fragrances Drive Growth
Fragrances remain the most performing category for ELC, with an organic growth of 10% in the fourth quarter, driven by brands such as Le Labo and Tom Ford.
Le Labo benefited from expanded distribution and renewed efforts to reach new consumers, reinforcing what de La Faverie described as a successful model around a high-end positioning, selective growth, innovation, and investment in consumers.
Analysts in the sector continue to consider prestige fragrances as one of the most resilient segments of the cosmetics market, particularly among young generations, where ELC's portfolio of luxury and niche brands remains well-positioned.
| Category | Q4 2026 Growth | Full Fiscal Year 2026 Growth |
|---|---|---|
| Fragrances | 10% | 3% |
| Skincare | 3% | 3% |
| Makeup | 0% | 0% |
| Haircare | -1% | -1% |
Makeup and Haircare Struggle
While fragrances and skincare continue to outperform, ELC acknowledges that progress is still needed in the makeup and haircare categories.
Makeup sales remained stable during the quarter, despite the expansion of M·A·C at Sephora in the US, which generated solid results and increased visibility for the brand. De La Faverie described this deployment as a "resounding success," including on other markets such as South Korea.
Haircare sales declined by 1%, primarily reflecting the weak performance of Aveda, which was not fully compensated by the success of The Ordinary.
China Takes Center Stage
The rebound of activity in China, where Estée Lauder anticipates strong sales growth driven by the launch of new products, is at the heart of the company's regained confidence.
The Estée Lauder Companies deliberately reduced its promotional activities in China, limiting discounts and special offers to focus on reinforcing brand value.
Higher-than-Expected Outlook
For the 2027 fiscal year, ELC expects an adjusted diluted earnings per share of between $3.10 and $3.35, with the midpoint of this range exceeding the consensus analyst estimate of $3.18.
The company also reported a $38 million customs duty refund recorded in the fourth quarter, which partially offset the estimated $102 million customs duty impact on the full fiscal year. Estée Lauder noted, however, that geopolitical disruptions, including the conflict in the Middle East, had weighed on the results of the 2026 fiscal year.
