Estée Lauder Companies (EL) Q3 2026 earnings summary

Executive summary

• Fiscal 2026 outlook was raised following strong Q4 and Q3 results, with 2% organic sales growth and 40% EPS growth in Q4, and 5% net sales growth in Q3, driven by operational efficiencies and the Profit Recovery and Growth Plan (PRGP).

• Three of four regions grew organically, led by high single-digit to double-digit growth in Mainland China and priority emerging markets; Americas stabilized.

• Fragrance delivered double-digit organic growth, skincare and makeup saw modest gains or stabilization, and hair care was flat; strong performance from luxury brands and new launches.

• Online organic sales grew 10% year-to-date, with double-digit growth in Q4, outperforming prestige beauty in the channel.

• Strategic investments in innovation, digital channels, and restructuring, including the expanded PRGP, are driving sustainable growth and margin improvement.

Financial highlights

• Q4 organic sales rose 2% year-over-year; Q3 net sales increased 5% to $3.7B, with gross margin up 140 basis points to 76.4%.

• Adjusted operating income grew 38% for the quarter; adjusted operating margin expanded to 15%.

• Diluted EPS for Q4 was $0.91, up 40% from last year; reported diluted EPS for Q3 was $0.24, down 45% due to litigation charges.

• Net cash flows from operating activities reached $1.2 billion for the nine months, up from $671 million last year.

• CapEx for nine months was $304–$306 million, down year-over-year.

Outlook and guidance

• Fiscal 2026 organic net sales growth expected at ~3%, at the high end of prior guidance.

• Adjusted operating margin forecasted at 10.7–11%; adjusted diluted EPS expected between $2.35 and $2.45, representing 56–62% year-over-year growth.

• Fiscal 2027 preliminary outlook: organic sales growth of 3–5%, operating margin of 12.5–13%.

• Ongoing geopolitical and macroeconomic uncertainty, including Middle East disruptions, expected to impact Q4 and full-year results.