Search on Fashionbi
The beauty group returns to sales growth, hiking revenue by 5% to $15 billion.
Financials
02 November, 2026
Table of contents
The Estee Lauder Companies Inc. released its FY2026 (ended 30 June 2026) financial results on 19 August 2026. Net sales increased 5% to $15 billion and gross profit rose 7%. The company has reported a return to positive operating income and net income, followed by significant devaluation and restructuring-related charges in the previous financial year.
The recovery was due to strong demand in fragrance, enhanced performance across key markets and operational effects delivered through the Profit Recovery and Growth Plan (PRGP). However, the distinction between reported and adjusted profitability remains important. Even though earnings improved, restructuring expenses, litigation-related costs and tariffs continued to influence the company's financial position.
| Financial KPI (in $ million) | FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue / Net Sales | 15.049 | 14.326 | 15.608 | 15.910 | 17.737 | 16.215 |
| Gross Profit | 11.362 | 10.597 | 11.184 | 11.346 | 13.432 | 12.381 |
| Operating Income / (Loss) | 780 | (785) | 970 | 1.509 | 3.170 | 2.618 |
| Net Income / (Loss) | 182 | (1.133) | 409 | 1.010 | 2.390 | 2.875 |
Revenue has hiked by $723 million to $15.049 million in FY2026, representing 5% growth after declining from $15.608 million in FY2024 to $14.326 million in FY2025. The sales remained 15,2% below the six-year peak of $17.737 million recorded in FY2022. Organic net sales have increased by 3% to $14.811 million. The difference between reported and organic growth reflects currency movements affecting the company's international sales.
The recovery extended across all geographic regions during the fourth quarter and full year. The Estee Lauder Companies Inc. also recorded prestige beauty share gains in mainland China and Japan during both the fourth quarter and full FY2026. In mainland China, the gains were driven by fragrance, skincare and makeup, as well as fragrance and makeup supporting the improvement in Japan. It also faced US volume share profits and a return to value share profits in Western Europe during the fourth quarter.
Gross profit has increased by 7,2% to $11.362 million. However, gross profit remained below the $13.432 million recorded in FY2022. This highlights that the improvement in profitability has not yet translated into a full recovery of historical sales and profit levels.
The improvement was supported by better purchasing costs, tighter control of expenses and reduced waste from unsold or outdated inventory under the Profit Recovery and Growth Plan (PRGP). These savings helped reduce the impact of rising costs and tariffs, which added $102 million in costs during FY2026. The company partly counterbalanced this through $38 million in tariff refunds received in the fourth quarter.
Operating income has reached $780 million, compared with an operating loss of $785 million in FY2025, marking a $1.565 million improvement. However, FY2026’s operating income remained below the $970 million reported in FY2024 and significantly below the $3.170 million recorded in FY2022.
FY2025 included $1.286 million in asset impairment charges and $159 million in talcum-related legal settlement costs. In FY2026, the company continued to sustain restructuring costs and recorded an additional $84 million provision for a pending securities class-action lawsuit.
Adjusted operating income rose 47% to $1.687 million, while the adjusted operating margin increased from 8,0% to 11,2%. This improvement reflects better cost control and stronger gross margins.
Net income has reached $182 million, compared with $1.133 million in FY2025. The result remained below the $409 million recorded in FY2024 and the $2.875 million reported in FY2021.
The reported effective tax rate rose to 64,8%, reflecting a contrast in where the company earned its profits, new tax allowances on certain overseas assets, and other tax-related factors. Adjusted diluted earnings per share increased from $1,51 to $2,51.
FY2026 - Fragrance portfolio: The Estee Lauder Companies Inc. expanded its portfolio to 6 billion-dollar brands, adding Jo Malone London and TOM FORD to the group’s four existing billion-dollar brands, Estée Lauder, La Mer, MAC and Clinique. Fragrance sales grew 10% organically, supporting the company's recovery.
March 2026 - MAC: MAC extended into selected US Sephora stores, Sephora's online platform and Sephora at Kohl's. Lip products, including Powder Kiss Lipstick and Lip Pencil, backed sales growth.
March 2026 - Forest Essentials: Estée Lauder agreed to acquire the remaining interests in Indian luxury Ayurvedic beauty brand Forest Essentials, subject to regulatory approvals. The deal builds on an 18-year partnership, following its initial investment in 2008 and an increase in ownership to 49% in 2020. Founder Mira Kulkarni is continuing to oversee the brand, with its headquarters remaining in New Delhi. The acquisition supports Estée Lauder's strategy to expand the brand's international consumer reach.
FY2026 - Digital and retail expansion: Estée Lauder expanded its Amazon presence to 13 brands across 11 markets and its TikTok Shop presence to 12 brands across nine markets. It also opened 33 net new standalone fragrance stores, led by Le Labo and Jo Malone London.
FY2026 - Profit Recovery and Growth Plan: Estée Lauder established its One ELC operating model and completed approvals for the restructuring programme by 30 June 2026. The plan targets $1,2 billion in gross benefits and a net reduction of 10.000 positions, setting up goals to simplify operations and improve efficiency.
September 2026 - Leadership appointments: Justin Boxford became Global President, Luxury Beauty Brands, with responsibility for La Mer alongside several other brands. Erica Kwok was appointed Senior Vice President and General Manager of Estée Lauder, while Magalie Parksuwan took on additional responsibility for Darphin Paris and Lab Series. The changes followed Sandra Main's announced retirement, effective 31 December 2026.
The Estee Lauder Companies Inc. expects organic net sales to grow by 3%-5% in FY2027 and forecasts an adjusted operating margin of 12,7%-13,5%. Fragrance and skincare are expected to remain key growth drivers, while makeup is forecast to return to full-year growth. The company plans to support this progress through increased consumer-focused investment, wider distribution and tighter cost control.
FY2026 marks a return to revenue growth and profitability, supported by higher gross profit and improved operating performance. However, sustaining this recovery will depend on continued consumer demand and the company's ability to manage tariffs, restructuring costs and uncertain spending patterns. As Estée Lauder enters FY2027, its priority will be to turn operational savings into consistent sales growth and stronger long-term profitability.
Cover Image: WWD.
Read the full The Estee Lauder Companies Inc. report Here.
For a deeper dive into the financial performance of other top luxury brands, explore the
Beauty’s Global Balancing Act: Analysing L'Oréal paris, Estée Lauder & Shiseido here, and
Rare Beauty FY2024 Financial Report here.
Find more financial analysis here.