767 Fifth Avenue Investors:Rainey Mancini
News Contact: 767 Fifth Avenue Investors:Rainey Mancini New York, NY 10153 rmancini@estee.com Media:Brendan Riley briley@estee.com
Net Sales Growth Across Nearly All Product Categories and Every Geographic Region
The Estée Lauder Companies Inc. (NYSE: EL) today reported its financial results for the first quarter ended September 30, 2026.
“Our first quarter of fiscal 2027 marks another powerful step forward for The Estée Lauder Companies. Growth is accelerating, profitability is strengthening significantly, and the impact of Beauty Reimagined is becoming increasingly evident across our business. We are bringing more breakthrough innovation to consumers, amplifying the desirability of our brands with bold, high impact campaigns, and building a faster, more agile organization that is converting momentum into stronger financial performance,” said Stéphane de La Faverie, President and CEO.
“We have moved beyond restoring growth. We are building diverse drivers for sustained profitable growth. The energy and determination of our teams, combined with the strength of our brands and the progress of our transformation, give me greater confidence than ever in the opportunities that lie ahead. We are raising our fiscal 2027 outlook, reflecting both our strong start and our conviction in the future we are creating.”
expanded 240 basis points, to 75.7% from 73.3%. This reflects net benefits from cost and operational efficiencies enabled through the Company’s Profit Recovery and Growth Plan (“PRGP”), sales leverage and the net benefit of strategic pricing actions, which collectively offset inflation. The PRGP benefits included procurement savings, expense optimization and manufacturing efficiencies.
expanded 480 basis points, to 12.1% from 7.3%, driven by operating leverage and gross margin expansion, which provided funding for increased consumer-facing investments 4 . As Reported
also reflects the year-over-year decrease in restructuring and other charges of $45 million.
decreased to 31.9% from 40.5%, reflecting the impact of lower pre-tax income in the fiscal 2026 first quarter. The decrease was primarily driven by a more favorable estimated full-year mix of earnings, partially offset by an estimated increase in unrecognized tax benefits, primarily related to transfer pricing matters.
1 See pages 16 and 17 for reconciliation between GAAP and Adjusted Non-GAAP measures.
2 Organic net sales represents net sales excluding returns associated with restructuring and other activities; non-comparable impacts of acquisitions, divestitures and brand closures; as well as the impact from foreign currency translation. The Company believes that the Non-GAAP measure of organic net sales growth provides year-over-year sales comparisons on a consistent basis.
3 Adjusted Non-GAAP measures are calculated based on Net Sales adjusted only for Returns associated with restructuring and other activities.
4 Consumer-facing investments includes co-operative advertising, selling, advertising and promotional expenses, as well as store operating costs.
increased to $3.20 billion compared with $2.22 billion in the prior year. This reflects decreases of $300 million and $702 million for the three months ended September 30, 2026 and 2025, respectively, driven by:
decreased to $166 million, compared with $340 million in the prior year, primarily reflecting higher net earnings, excluding non-cash items. The improvement also reflects the favorable change in operating assets and liabilities, net of the increase in restructuring payments and investments in working capital to support the business.
decreased to $69 million from $96 million in the prior year, reflecting the timing of projects and the Company’s continued focus on optimizing overall spend, prioritizing consumer-facing investments to fuel growth.
5 improved to negative $235 million from negative $436 million in the prior year, reflecting the improvement in cash flows used for operations as well as the timing of capital expenditures. The Company continues to focus on improving Free Cash Flow through operational efficiencies and the optimization of its investments.
◦ Mainland China: Value share gains driven by Makeup, Skin Care and Fragrance, led by TOM FORD, The Ordinary, Le Labo and La Mer
◦ J apan: Value share gains led by Makeup and Fragrance, driven by double-digit retail sales g rowth from Le Labo, M·A·C and TOM FORD
◦ Korea: Double-digit retail sales growth, with share gains in Makeup led by M·A·C and TOM FO RD
◦ U.S. 7 : Volume share gains, driven by The Ordinary and M·A·C, and value share gains in Fragrance and Hair Care
5 Free Cash Flow is defined as net cash flows from operating activities less capital expenditures. See page 17 for the reconciliation between GAAP and Adjusted Non-GAAP measures.
6 Since the Company’s last earnings announcement, including some previously disclosed.
7 Source, excluding direct-to-consumer data: Circana, LLC, US Prestige Beauty Total Department/Specialty, Dollar Share Growth of Corporation, three-months ended September 30, 2026.
8 Source, excluding direct-to-consumer data: Circana, LLC, France, Germany, Italy, Spain and U.K. Prestige Beauty Total Department/Specialty, Dollar Share Growth of Corporation, three-months ended September 30, 2026.
on Amazon, reaching 13 brands across 17 markets, and on TikTok Shop, now with 15 brands across 11 markets
• Broadened specialty-multi distribution in the UK with Jo Malone London’s launch at Boots and Space NK, in August and September 2026, respectively
as the first prestige beauty company to partner with AI marketing platform, Profound, to bring enterprise-wide global AI insights and Generative Engine Optimization across emerging digital touchpoints, announced in September 2026
to deliver best-in-class consumer experiences with the full deployment of Shopify for M·A·C and Clinique on their US and UK brand.com, as well as the initial rollout for M·A·C freestanding stores in the US and UK
• Enhanced its global value chain agility and efficiency with the opening of its Hainan Fulfillment Center in July 2026 and investment in advanced water infrastructure at its Oevel manufacturing campus in Belgium, announced in October 2026
, completing the acquisition of the remaining equity interest in Mountain Valley Springs India Private Limited, the owner of the
with enhanced efficacy, claims, and shade rosters including La Mer’s new The Concentrate Serum, Bobbi Brown Vitamin Enriched Face Base, and M·A·C Lustreglass Sheer-Shine Lipstick
◦ Harnessed breakthrough science in nighttime and longevity skin care with Estée Lauder Advanced Night Repair Recovery Treatment Essence/Treatment Lotion and Re- Nutriv Age Reversal Ultimate Diamond Recovery
across prestige price tiers with Clinique Smart Clinical Repair Collagen + PDRN Cream and The Ordinary Lacto-PDRN* 4% + B9 Eye Cream
with new and trending forms including M·A·C Lustreglass Stainglass Lip Tint, M·A·C Studio Radiance Skin Tint Stick, and Clinique Daily Calm Makeup Balm Foundation
in the East with Estée Lauder Double Wear SkinFit Cushion and M·A·C Studio Radiance Serum-Powered Cushion Foundation, and
in eye and brow from M·A·C with Kajal Excess Longwear Smoky Eye Liner, Pro Brow Styler and Pro Brow Whipgrip Mousse
with Estée Lauder Glimmer, KILIAN PARIS The Cocktails Collection, and Balmain Beauty Destin de Balmain Parfum in the prestige price tier; from newness in
TOM FORD Ombre Leather Reserve, and TOM FORD Tobacco Chocolat; and new Beijing City Exclusive scent from Le Labo, Shiu 25
◦ Captured growing demand for salon quality multi-benefit haircare with Aveda One For All Leave-In Elixir and Bumble and bumble’s Seaweed Oil Control Collection
through bold campaigns and commercial innovation for flagship franchises including “Feels Like Moisture Surge” for Clinique, “We All Wear M·A·C” for M·A·C, and “Energy of Change” for La Mer
including being on track to achieve 16 of the 17 goals, and for fiscal 2026, significant reductions in water withdrawal and waste, 100% renewable energy across operations, and more than $16 million invested in programs supporting women and girls
with a $15 million, five-year commitment to establish the largest global research initiative focused on breast cancer in younger women with the Breast Cancer Research Foundation
for onshore wind in Spain in August 2026, supporting The Estée Lauder Company’s renewable energy supply and price, while also strengthening grid energy security and decarbonization
• The Company announced that it will webcast presentations from its Capital Markets Experience in Shanghai, China, on November 4, 2026. The presentations will discuss its long-term strategy to drive sustainable growth and stronger profitability, featuring senior and local leaders discussing Beauty Reimagined in action in China and its role as a blueprint for deploying global capabilities.
The product category net sales commentary below reflects organic net sales, excluding the (favorable)/unfavorable impacts from foreign currency translation. As there were no non-GAAP adjustments to product category results in the fiscal 2027 and 2026 first quarters, the commentary below reflects both reported and adjusted operating results. In addition to the Operational Highlights above, below are the drivers of the Company’s performance.
• Skin Care net sales increased 4%, primarily driven by growth from La Mer and The Ordinary.
◦ Net sales increased from La Mer, benefitting from innovation, including the new The Concentrate Serum, as well as continued success of The Treatment Lotion product franchise.
◦ The Ordinary net sales increased, reflecting targeted expanded consumer reach, along with growth in existing distribution supported by key activations, by the success of its Glycolic Acid 7% Exfoliating Toner and the launch of Lacto‑PDRN 4% + B9 Eye Cream.
• Skin Care operating income increased 40%, primarily due to the increase in net sales as well as the reduction in non-consumer-facing expenses, partially offset by the net increase in consumer-facing investments, including to support new product launches, key activations and distribution expansion.
• Makeup net sales grew 1%, primarily driven by M·A·C, partially offset by the decline from Estée Lauder.
◦ Net sales increased from M·A·C, benefitting from targeted expanded consumer reach—including the fiscal 2026 second-half launches in select U.S. and Middle East Sephora locations, in Sephora at Kohl’s and online in these markets—which, along with the launches of Lustreglass Sheer-Shine Lipstick and Lustreglass Stainglass Lip Tint, fueled the growth in the lip subcategory.
◦ Estée Lauder net sales declined, reflecting lower net sales in the face subcategory, including the timing of fiscal 2027 new product launches, partially offset by incremental sales from the next-generation of Double Wear Stay-in- Place Longwear Matte Foundation that launched in the second half of fiscal 2026.
• Makeup operating results improved to income from a loss in the prior year, primarily due to the increase in net sales as well as the reduction in non- consumer-facing expenses. This was partially offset by the net increase in consumer-facing investments—net of the strategic reduction in selling expenses—including those to support distribution expansion, key activations and new product launches.
• Fragrance net sales increased 20%, driven by double-digit growth from the Company’s Luxury Brands—led by Le Labo, TOM FORD, Jo Malone London and KILIAN PARIS—and from Estée Lauder.
◦ Net sales increased from Le Labo, primarily due to the ongoing success of its Classic Collection, including Another 13 and Santal 33, and its City Exclusives—including Gaiac 10 and the launch of Shiu 25, the Beijing City Exclusive. This reflects growth from both targeted expanded consumer reach and existing distribution.
◦ TOM FORD net sales increased, benefitting from innovation across both the Private Blend and Signature product franchises—including Tobacco Chocolat and Ombré Leather Reserve—which created a halo effect that supported existing product sales growth.
◦ Net sales from Jo Malone London increased, driven by innovation—such as Sea Salt & Bergamot—and growth from hero product franchises, both supported by targeted expanded consumer reach.
◦ The net sales growth from Estée Lauder was driven by the launch of Glimmer, the brand’s first gourmand scent.
◦ Net sales increased from KILIAN PARIS—the Company’s fastest growing Luxury Brand—reflecting innovation success from The Cocktails Collection and continued strength from its hero products, along with growth from targeted expanded consumer reach.
• Fragrance operating income increased 93%, primarily due to the increase in net sales, partially offset by increased consumer-facing investments, including those to support new product launches, key activations and distribution expansion.
• Hair Care net sales were flat, primarily driven by growth from The Ordinary, offset by the decline from Aveda:
◦ Net sales growth from The Ordinary was fueled by continued success of Multi- Peptide Serum for Hair Density as well as targeted expanded consumer reach.
◦ The decline in net sales from Aveda, reflected lower shipments primarily due to brand-specific supply chain logistical challenges.
• Hair Care operating results improved to income from a loss in the prior year, reflecting the reduction in non-consumer-facing expenses and lower cost of sales.
The geographic region net sales commentary below reflects organic net sales, excluding the (favorable)/unfavorable impact from foreign currency translation. As there were no non-GAAP adjustments to geographic region results in the fiscal 2027 and 2026 first quarters, the commentary below reflects both reported and adjusted operating results. In addition to the Operational Highlights above, below are the drivers of the Company’s performance.
• The growth in Asia/Pacific, primarily due to the Company’s Asia travel retail business, including:
◦ Net sales growth from the Beijing and Shanghai airports, reflecting an increase in replenishment orders amid continued stabilization following changes in duty-free retailers—including the related online businesses—that began in the fiscal 2026 second quarter.
◦ The increase in net sales in Hainan travel retail, primarily driven by the improvement in online retail sales.
• Growth in Mainland China, driven by both innovation and existing products, including during key shopping moments, with increased consumer-facing investments supporting key activations to drive sales growth. Targeted expanded consumer reach contributed to the growth in both online and brick-and-mortar channels.
• Continued net sales growth in North America, benefitting from targeted expanded consumer reach and innovation, supported by consumer-facing investments to drive sales growth
• The increase in the Company’s Priority Emerging Markets, collectively—led by Turkey, Mexico and India—with successful innovation and targeted expanded consumer reach contributing to growth
• The Americas - operating income increased 31%, reflecting higher gross profit from both the increase in net sales and lower cost of sales, partially offset by the net increase in consumer-facing investments to drive sales growth, including to support new product launches and distribution expansion.
• EUKEM - operating margin increased to 4.8% from 0.7%, primarily due the increase in net sales as well as the reduction in non-consumer-facing expenses. This was partially offset by the net increase in consumer-facing investments—net of the strategic reduction in selling expenses—to drive sales growth, including to support distribution expansion and new product launches.
• Asia/Pacific - operating income increased 73%, reflecting higher gross profit due to the increase in net sales as well as lower cost of sales.
• Mainland China - operating margin increased to 5.2% from 2.3%, primarily driven by higher net sales, partially offset by increased consumer-facing investments to support sales growth, including to support new product launches and key activations.
Today, the Company announced a quarterly dividend of $.35 per share on its Class A and Class B Common Stock, payable in cash on December 15, 2026 to stockholders of record at the close of business on November 30, 2026.
The Company is raising its fiscal 2027 full-year outlook, reflecting its strong performance in the fiscal 2027 first quarter while remaining cautious amid ongoing geopolitical and macroeconomic uncertainty.
• Organic net sales growth of 4.0% to 5.5%, ranging from the mid-point to above the high-end of the previously communicated range of 3% to 5%
• Adjusted operating margin to range between 12.9% to 13.7%, an increase from the previously communicated range of 12.7% to 13.5%
• Adjusted diluted net earnings per common share to range between $3.20 to $3.45, an increase from the previously communicated range of $3.10 to $3.35
Reconciliation between GAAP and Non-GAAP - Net Sales Current - Growth November 2, Prior - August (Unaudited) 2026 19, 2026 ────────────────────────────────────────────────────────────────────────────── Twelve Months Twelve Months Ending Ending June 30, June 30, 2027(1) 2027(2) As Reported - 5.0% - 6.5% 3% - 5% GAAP Impact of foreign 1 — currency translation Impact of Forest — — Essentials Returns associated with — — restructuring and other activities Organic, 4.0% - 5.5% 3% - 5% Non-GAAP (1)Represents forecast, using spot rates as of September 30, 2026. (2)Represents forecast, using spot rates as of June 25, 2026.
The Company has now reflected the following assumptions in its fiscal 2027 full- year outlook:
• Organic net sales growth of 4.0% to 5.5%, ranging from the mid-point to above the high-end of the previously communicated range, and reflecting:
◦ Greater increase in the first half compared to the second due to: (i) more new product launches earlier in fiscal 2027, (ii) an increase in travel retail shipments reflecting retail trend improvements entering fiscal 2027 and (iii) a lower base of travel retail shipments in the first half of fiscal 2026 relative to the second half
◦ Continued growth in Fragrance and Skin Care, as well as a return to growth in Makeup for the full year
▪ In EUKEM, stronger growth is expected in the second half of fiscal 2027, reflecting an easier comparison to the prior-year period, which was negatively impacted by business disruptions related to the conflict in the Middle East
▪ Based on current conditions and the Company’s assessment to date, it does not expect the conflict in the Middle East to have a material impact on its fiscal 2027 results, and will continue to monitor the situation closely. The Company also assumes the stabilization from recent disruptions in other key markets in EUKEM.
• On October 5, 2026, the Company completed the acquisition of the remaining equity interest in Mountain Valley Springs India Private Limited, the owner of the Forest Essentials brand. The brand’s fiscal 2027 results are not expected to have a material impact on the Company’s consolidated net sales or diluted net earnings per common share.
• Diluted weighted-average shares outstanding of approximately 368 million shares
• Net cash flows provided by operating activities to be between $1.4 billion and $1.5 billion, an increase from the previously communicated range of $1.3 billion to $1.4 billion. This is a decrease from fiscal 2026, reflecting higher restructuring payments as well as an increase in working capital needs to support growth.
• Capital expenditures to be approximately 4% of projected sales, reflecting the Company’s continued focus on optimizing its overall investments as it prioritizes consumer-facing investments to fuel growth—including upgrades to existing brick-and-mortar and online distribution channels, along with targeted expanded consumer reach
• No deterioration in the geopolitical landscape or related impacts, including tariffs and consumer sentiment
The call will also be webcast live at http://www.elcompanies.com/investors/events-and-presentations and will be available for replay until February 2, 2027.
Statements in this press release, in particular those in “Outlook,” as well as remarks by the CEO and other members of management, may constitute forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may address the Company’s expectations regarding sales, earnings or other future financial performance and liquidity, other performance measures, product introductions, entry into new geographic regions, information technology initiatives, new methods of sale, the Company’s long-term strategy, restructuring and other charges and resulting cost savings, and future operations or operating results. These statements may contain words like “expect,” “will,” “will likely result,” “would,” “believe,” “estimate,” “planned,” “plans,” “intends,” “may,” “should,” “could,” “anticipate,” “estimate,” “project,” “projected,” “forecast,” and “forecasted” or similar expressions. Although the Company believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, actual results may differ materially from the Company’s expectations. Factors that could cause actual results to differ from expectations include, without limitation:
(1) increased competitive activity from companies in the skin care, makeup, fragrance and hair care businesses;
(2) the Company’s ability to develop, produce and market new products on which future operating results may depend and to successfully address challenges in the Company’s business;
(3) consolidations, restructurings, bankruptcies and reorganizations in the retail industry causing a decrease in the number of stores that sell the Company’s products, an increase in the ownership concentration within the retail industry, ownership of retailers by the Company’s competitors or ownership of competitors by the Company’s customers that are retailers and the Company’s inability to collect receivables;
(5) the success, or changes in timing or scope, of new product innovation, including launches, and the success, or changes in timing or scope, of advertising, sampling and merchandising programs;
(6) shifts in the preferences of consumers as to how they perceive value and where and how they shop;
(7) social, political and economic risks to the Company’s foreign or domestic manufacturing, distribution and retail operations, including changes in foreign investment and trade policies and regulations of the host countries and of the United States;
(8) changes in the laws, regulations and policies (including the interpretations and enforcement thereof) that affect, or will affect, the Company’s business, including those relating to its products or distribution networks, changes in accounting standards, tax laws and regulations, environmental or climate change laws, regulations or accords, trade rules and customs regulations, and the outcome and expense of legal or regulatory proceedings, and any action the Company may take as a result;
(9) foreign currency fluctuations affecting the Company’s results of operations and the value of its foreign assets, the relative prices at which the Company and its foreign competitors sell products in the same markets and the Company’s operating and manufacturing costs outside of the United States;
(10) changes in global or local conditions, including those due to volatility in the global credit and equity markets, government economic policies, natural or man-made disasters, real or
perceived epidemics, supply chain challenges, inflation, or increased energy costs, that could affect consumer purchasing, the willingness or ability of consumers to travel and/or purchase the Company’s products while traveling, the financial strength of the Company’s customers, suppliers or other contract counterparties, the Company’s operations, the cost and availability of capital which the Company may need for new equipment, facilities or acquisitions, the returns that the Company is able to generate on its pension assets and the resulting impact on funding obligations, the cost and availability of raw materials and the assumptions underlying the Company’s critical accounting estimates;
(11) shipment delays, commodity pricing, depletion of inventory and increased production costs resulting from disruptions of operations at any of the facilities that manufacture the Company’s products or at the Company’s distribution or inventory centers, including disruptions that may be caused by the implementation of information technology initiatives, or by restructurings;
(12) real estate rates and availability, which may affect the Company’s ability to increase or maintain the number of retail locations at which the Company sells its products and the costs associated with the Company’s other facilities;
(14) the Company’s ability to acquire, develop or implement new information technology, including operational technology and websites, on a timely basis and within the Company’s cost estimates; to maintain continuous operations of its new and existing information technology; and to secure the data and other information that may be stored in such technologies or other systems or media;
(15) the Company’s ability to capitalize on opportunities for improved efficiency, such as publicly-announced strategies and restructuring and cost- savings initiatives, and to integrate acquired businesses and realize value therefrom;
(16) consequences attributable to local or international conflicts around the world, as well as from any terrorist action, retaliation and the threat of further action or retaliation;
(18) additional factors as described in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
The Company assumes no responsibility to update forward-looking statements made herein or otherwise.
The Estée Lauder Companies Inc. is one of the world’s leading manufacturers, marketers and sellers of quality skin care, makeup, fragrance and hair care products, and is a steward of luxury and prestige brands globally. The Company’s products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced, Dr.Jart+, the DECIEM family of brands—including The Ordinary, NIOD, Avestan and Loopha—as well as Balmain Beauty and Forest Essentials.
($ in CONSOLI… millions, Three STATEME… except Months OF per Ended EARNINGS share September Percenta… (Unaudi… data) 30 2026 2025 Change ────────────────────────────────────────────────────────────────────────────── Net $ 3,715 $ 3,481 7 % sales(A) Cost of 902 927 -3 sales(A) Gross 2,813 2,554 10 profit Gross 75.7 % 73.4 % margin Operati… expenses Selling, general 2,365 2,296 3 and adminis… Restruc… and 40 89 -55 other charges… Total operati… 2,405 2,385 1 expenses Operati… expense 64.7 % 68.5 % margin Operati… 408 169 100+ income Operati… income 11.0 % 4.9 % margin Interest 83 86 -3 expense Interest income and 25 30 -17 investm… income, net Other compone… of net 5 4 25 periodic benefit cost Earnings before 345 109 100+ income taxes Provisi… for 112 62 81 income taxes Net $ 233 $ 47 100+% earnings Net earnings per common share Basic $ .64 $ .13 100+% Diluted $ .64 $ .13 100+% Weighte… common shares outstan… Basic 363.3 361.2 Diluted 366.1 363.3 (A)Incl… in net sales, cost of sales and restruc… and other charges are the impacts of returns and charges associa… primari… with the restruc… program compone… of the PRGP. Additio… informa… about the restruc… program compone… of the PRGP is included in the notes to consoli… financi… stateme… in the Company… Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
This earnings release includes some non-GAAP financial measures relating to charges associated with restructuring and other activities and adjustments, as well as organic net sales and free cash flow. Included herein are reconciliations between the non-GAAP financial measures and the most directly comparable GAAP measures for certain consolidated statements of earnings accounts and consolidated statements of cash flow line items before and after the relevant adjustments. The Company uses certain non-GAAP financial measures, among other financial measures, to evaluate its operating performance, which represent the manner in which the Company conducts and views its business. Management believes that excluding certain items that are not comparable from period-to-period, or do not reflect the Company’s underlying ongoing business, provides transparency for such items and helps investors and others compare and analyze operating performance from period-to-period. In the future, the Company expects to incur charges or adjustments similar in nature to those presented herein; however, the impact to the Company’s results in a given period may be highly variable and difficult to predict. For free cash flow, this measure represents how much cash the Company has available from operations after the deduction of capital expenditures, which are a recurring and necessary use of cash. The Company’s non-GAAP financial measures may not be comparable to similarly titled measures used by, or determined in a manner consistent with, other companies. While the Company considers the non-GAAP measures useful in analyzing its results, they are not intended to replace, or act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP.
The Company operates on a global basis, with the majority of its net sales generated outside the United States. Accordingly, fluctuations in foreign currency exchange rates can affect the Company’s results of operations. Therefore, the Company presents certain net sales, operating results, provision for income taxes and diluted net earnings per common share information excluding the effect of foreign currency rate fluctuations to provide a framework for assessing the performance of its underlying business outside the United States. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. The Company calculates constant currency information by translating current-period results using prior-year period monthly average foreign currency exchange rates and adjusting for the period-over-period impact of foreign currency cash flow hedging activities.
Reconcili… between GAAP and Non-GAAP Three Months Net Sales ($ in Ended Percentage (Unaudite… millions) September 30 2026 2025 Change ────────────────────────────────────────────────────────────────────────────── Net Sales $ 3,715 $ 3,481 7 % Non-GAAP Adjustmen… Returns associated with 1 -1 restructu… and other activities Adjusted Net Sales, 3,716 3,480 Non-GAAP Impact of foreign -20 — currency translati… Organic Net Sales, $ 3,696 $ 3,480 6 % Non-GAAP
Reconci… of Certain Consoli… Stateme… of Earnings Accounts Before and After Returns, ($ in Charges millions, Three and except Months Other per Ended Adjustm… share September Percenta… (Unaudi… data) 30 2026 2025 Change ────────────────────────────────────────────────────────────────────────────── Gross $ 2,813 $ 2,554 10 % Profit Non-GAAP Adjustm… Restruc… and 1 -3 other activit… Adjusted Gross $ 2,814 $ 2,551 10 % Profit, Non-GAAP Impact of foreign -8 — currency transla… Adjusted Gross Profit, $ 2,806 $ 2,551 10 % Non-GAAP constant currency Gross 75.7 % 73.4 % Margin Non-GAAP Adjustm… Restruc… and — -0.1 other activit… Adjusted Gross 75.7 % 73.3 % Margin, Non-GAAP Operati… $ 408 $ 169 100+% Income Non-GAAP Adjustm… Restruc… and 41 86 other charges Adjusted Operati… $ 449 $ 255 76 % Income, Non-GAAP Impact of foreign 9 — currency transla… Adjusted Operati… Income, $ 458 $ 255 80 % Non-GAAP constant currency Operati… 11.0 % 4.9 % Margin Non-GAAP Adjustm… Restruc… and 1.1 2.4 other charges Adjusted Operati… 12.1 % 7.3 % Margin, Non-GAAP Provisi… for $ 112 $ 62 81 % Income Taxes Effecti… Tax Rate 32.5 % 56.9 % ("ETR") Tax Impact on Non-GAAP adjustm… Restruc… and 11 17 other charges Adjusted Provisi… for $ 123 $ 79 Income Taxes, Non-GAAP Adjusted ETR, 31.9 % 40.5 % Non-GAAP Diluted Net Earnings $ .64 $ .13 100+% Per Common Share Non-GAAP Adjustm… Restruc… and .08 .19 other charges Adjusted Diluted Net Earnings $ .72 $ .32 100+% Per Common Share, Non-GAAP Impact of foreign .01 — currency transla… Adjusted Diluted Net Earnings Per $ .73 $ .32 100+% Common Share, Non-GAAP constant currency 1Percen… are calcula… on an individ… basis.
Reconciliation of Certain Consolidated Statements of Cash Flows Accounts Cash Flows from Operating Activities to Free Cash Flow Three Months Ended (Unaudited) ($ in millions) September 30 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net cash flows used for operating $ -166 $ -340 activities Less: capital -69 -96 expenditures Free cash flow $ -235 $ -436
SELECT CASH FLOW DATA Three Months Ended (Unaudited) ($ in millions) September 30 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net earnings $ 233 $ 47 Adjustments to reconcile net earnings to net cash flows from operating activities: Depreciation and 191 200 amortization Deferred income taxes -71 -34 Other items 93 82 Changes in operating assets and liabilities: Increase in accounts -399 -358 receivable, net (Increase) decrease in inventory and -146 6 promotional merchandise Increase in other -6 -11 assets, net Decrease in accounts payable and other -61 -272 liabilities, net Net cash flows used for operating $ -166 $ -340 activities Other Investing and Financing Uses: Capital expenditures $ -69 $ -96 Dividends paid to -126 -127 stockholders Payment of deferred — -150 consideration Supplemental cash flow information: Cash paid for interest $ 56 $ 62 Cash paid for income 29 148 taxes
Full text with the tables
Exhibit 99.1
News
Contact:
767 Fifth Avenue Investors:Rainey Mancini
New York, NY 10153 rmancini@estee.com
Media:Brendan Riley
briley@estee.com
THE ESTÉE LAUDER COMPANIES REPORTS FISCAL 2027 FIRST QUARTER RESULTS
Delivered Strong First Quarter Results across Sales, Margins and EPS
Net Sales Growth Across Nearly All Product Categories and Every Geographic
Region
Raises Fiscal 2027 Full-Year Outlook on Sales, Margin and EPS
New York, November 2, 2026 -
The Estée Lauder Companies Inc. (NYSE: EL) today reported its financial results
for the first quarter ended September 30, 2026.
“Our first quarter of fiscal 2027 marks another powerful step forward for The
Estée Lauder Companies. Growth is accelerating, profitability is strengthening
significantly, and the impact of Beauty Reimagined is becoming increasingly
evident across our business. We are bringing more breakthrough innovation to
consumers, amplifying the desirability of our brands with bold, high impact
campaigns, and building a faster, more agile organization that is converting
momentum into stronger financial performance,” said Stéphane de La Faverie,
President and CEO.
“We have moved beyond restoring growth. We are building diverse drivers for
sustained profitable growth. The energy and determination of our teams, combined
with the strength of our brands and the progress of our transformation, give me
greater confidence than ever in the opportunities that lie ahead. We are raising
our fiscal 2027 outlook, reflecting both our strong start and our conviction in
the future we are creating.”
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FISCAL 2027 FIRST QUARTER SELECT FINANCIAL RESULTS (unaudited) 1,2,3
($ in
millions, Three
except Months
per Ended
share September Percenta…
data) 30 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
Net $ 3,715 $ 3,481 7 %
Sales
Organic
Net $ 3,696 $ 3,480 6 %
Sales,
Non-GAA…
Other
Financi…
Results:
Gross $ 2,813 $ 2,554 10 %
Profit
Gross 75.7 % 73.4 %
Margin
Adjusted
Gross $ 2,814 $ 2,551 10 %
Profit,
Non-GAA…
Adjusted
Gross 75.7 % 73.3 %
Margin,
Non-GAA…
Operati… $ 408 $ 169 100+%
Income
Operati… 11.0 % 4.9 %
Margin
Adjusted
Operati… $ 449 $ 255 76 %
Income,
Non-GAA…
Adjusted
Operati… 12.1 % 7.3 %
Margin,
Non-GAA…
Diluted
Net
Earnings $ .64 $ .13 100+%
Per
Common
Share
Adjusted
Diluted
Net
Earnings $ .72 $ .32 100+%
Per
Common
Share,
Non-GAA…
• As Reported
Net sales
increased 7% to $3.7 billion. Organic
Net sales
increased 6%.
• As Reported
Gross margin
expanded 230 basis points, to 75.7% from 73.4% in the prior year and Adjusted
Gross margin
expanded 240 basis points, to 75.7% from 73.3%. This reflects net benefits from
cost and operational efficiencies enabled through the Company’s Profit Recovery
and Growth Plan (“PRGP”), sales leverage and the net benefit of strategic
pricing actions, which collectively offset inflation. The PRGP benefits included
procurement savings, expense optimization and manufacturing efficiencies.
• As Reported
Operating margin
expanded 610 basis points, to 11.0% from 4.9% in the prior year and Adjusted
Operating margin
expanded 480 basis points, to 12.1% from 7.3%, driven by operating leverage and
gross margin expansion, which provided funding for increased consumer-facing
investments 4 . As Reported
Operating margin
also reflects the year-over-year decrease in restructuring and other charges of
$45 million.
• As Reported
Effective tax rate
decreased to 32.5% from 56.9% in the prior year and Adjusted
Effective tax rate
decreased to 31.9% from 40.5%, reflecting the impact of lower pre-tax income in
the fiscal 2026 first quarter. The decrease was primarily driven by a more
favorable estimated full-year mix of earnings, partially offset by an estimated
increase in unrecognized tax benefits, primarily related to transfer pricing
matters.
1 See pages 16 and 17 for reconciliation between GAAP and Adjusted Non-GAAP
measures.
2 Organic net sales represents net sales excluding returns associated with
restructuring and other activities; non-comparable impacts of acquisitions,
divestitures and brand closures; as well as the impact from foreign currency
translation. The Company believes that the Non-GAAP measure of organic net sales
growth provides year-over-year sales comparisons on a consistent basis.
3 Adjusted Non-GAAP measures are calculated based on Net Sales adjusted only for
Returns associated with restructuring and other activities.
4 Consumer-facing investments includes co-operative advertising, selling,
advertising and promotional expenses, as well as store operating costs.
Page 2 of19
• As Reported
Diluted net earnings per common share
increased to $.64 from $.13 in the prior year and Adjusted
Diluted net earnings per common share
increased to $.72, compared with $.32.
• For the three months ended September 30, 2026,
Cash and cash equivalents
increased to $3.20 billion compared with $2.22 billion in the prior year. This
reflects decreases of $300 million and $702 million for the three months ended
September 30, 2026 and 2025, respectively, driven by:
◦
Net cash flows used for operating activities
decreased to $166 million, compared with $340 million in the prior year,
primarily reflecting higher net earnings, excluding non-cash items. The
improvement also reflects the favorable change in operating assets and
liabilities, net of the increase in restructuring payments and investments in
working capital to support the business.
◦
Capital expenditures
decreased to $69 million from $96 million in the prior year, reflecting the
timing of projects and the Company’s continued focus on optimizing overall
spend, prioritizing consumer-facing investments to fuel growth.
◦
Free Cash Flow
5 improved to negative $235 million from negative $436 million in the prior
year, reflecting the improvement in cash flows used for operations as well as
the timing of capital expenditures. The Company continues to focus on improving
Free Cash Flow through operational efficiencies and the optimization of its
investments.
◦
Dividend
payments of $126 million.
SELECT FISCAL 2027 FIRST QUARTER HIGHLIGHTS
6
Beauty Gains and Achievements
•
Prestige beauty share gains in some key markets:
◦ Mainland China: Value share gains driven by Makeup, Skin Care and Fragrance,
led by TOM FORD, The Ordinary, Le Labo and La Mer
◦ J apan: Value share gains led by Makeup and Fragrance, driven by double-digit
retail sales g rowth from Le Labo, M·A·C and TOM FORD
◦ Korea: Double-digit retail sales growth, with share gains in Makeup led by
M·A·C and TOM FO RD
◦ U.S. 7 : Volume share gains, driven by The Ordinary and M·A·C, and value share
gains in Fragrance and Hair Care
◦ Western Europe 8 : Value share gains in Skin Care and Fragrance
5 Free Cash Flow is defined as net cash flows from operating activities less
capital expenditures. See page 17 for the reconciliation between GAAP and
Adjusted Non-GAAP measures.
6 Since the Company’s last earnings announcement, including some previously
disclosed.
7 Source, excluding direct-to-consumer data: Circana, LLC, US Prestige Beauty
Total Department/Specialty, Dollar Share Growth of Corporation, three-months
ended September 30, 2026.
8 Source, excluding direct-to-consumer data: Circana, LLC, France, Germany,
Italy, Spain and U.K. Prestige Beauty Total Department/Specialty, Dollar Share
Growth of Corporation, three-months ended September 30, 2026.
Page 3 of19
Operations and Execution
•
Expanded online consumer coverage
on Amazon, reaching 13 brands across 17 markets, and on TikTok Shop, now with 15
brands across 11 markets
• Broadened specialty-multi distribution in the UK with Jo Malone London’s
launch at Boots and Space NK, in August and September 2026, respectively
•
Boosted consumer-facing investments
, increasing 8% compared to the prior year
• Fortified the Company’s
One Operating Ecosystem
as the first prestige beauty company to partner with AI marketing platform,
Profound, to bring enterprise-wide global AI insights and Generative Engine
Optimization across emerging digital touchpoints, announced in September 2026
• Continued
modernizing its digital technology infrastructure
to deliver best-in-class consumer experiences with the full deployment of
Shopify for M·A·C and Clinique on their US and UK brand.com, as well as the
initial rollout for M·A·C freestanding stores in the US and UK
• Enhanced its global value chain agility and efficiency with the opening of its
Hainan Fulfillment Center in July 2026 and investment in advanced water
infrastructure at its Oevel manufacturing campus in Belgium, announced in
October 2026
• Continued to
invest for
long-term growth
, completing the acquisition of the remaining equity interest in Mountain Valley
Springs India Private Limited, the owner of the
Forest Essentials
brand in October 2026
Product and Commercial Innovation
• Launched
breakthrough, on-trend and commercial innovations
across categories, including:
◦
Elevated iconic heroes
with enhanced efficacy, claims, and shade rosters including La Mer’s new The
Concentrate Serum, Bobbi Brown Vitamin Enriched Face Base, and M·A·C Lustreglass
Sheer-Shine Lipstick
◦ Harnessed breakthrough science in nighttime and longevity skin care with Estée
Lauder Advanced Night Repair Recovery Treatment Essence/Treatment Lotion and Re-
Nutriv Age Reversal Ultimate Diamond Recovery
◦ Captured
emerging ingredient trends
across prestige price tiers with Clinique Smart Clinical Repair Collagen + PDRN
Cream and The Ordinary Lacto-PDRN* 4% + B9 Eye Cream
◦ Unlocked
white space opportunities
with new and trending forms including M·A·C Lustreglass Stainglass Lip Tint,
M·A·C Studio Radiance Skin Tint Stick, and Clinique Daily Calm Makeup Balm
Foundation
◦ Deepened
local relevance in high-growth sub-categories
in the East with Estée Lauder Double Wear SkinFit Cushion and M·A·C Studio
Radiance Serum-Powered Cushion Foundation, and
expanded artistry offerings
in eye and brow from M·A·C with Kajal Excess Longwear Smoky Eye Liner, Pro Brow
Styler and Pro Brow Whipgrip Mousse
◦ Drove
new consumer acquisition in fragrance
with Estée Lauder Glimmer, KILIAN PARIS The Cocktails Collection, and Balmain
Beauty Destin de Balmain Parfum in the prestige price tier; from newness in
signature luxury scent territories
with Jo Malone London Sea Salt & Bergamot,
Page 4 of19
TOM FORD Ombre Leather Reserve, and TOM FORD Tobacco Chocolat; and new Beijing
City Exclusive scent from Le Labo, Shiu 25
◦ Captured growing demand for salon quality multi-benefit haircare with Aveda
One For All Leave-In Elixir and Bumble and bumble’s Seaweed Oil Control
Collection
◦
Drove consumer engagement
through bold campaigns and commercial innovation for flagship franchises
including “Feels Like Moisture Surge” for Clinique, “We All Wear M·A·C” for
M·A·C, and “Energy of Change” for La Mer
Social Impact & Sustainability
• Published the Company’s annual SI&S report in October 2026 highlighting
progress towards newly announced 2030 goals,
including being on track to achieve 16 of the 17 goals, and for fiscal 2026,
significant reductions in water withdrawal and waste, 100% renewable energy
across operations, and more than $16 million invested in programs supporting
women and girls
• Advanced the Company’s
longstanding commitment to breast cancer research
with a $15 million, five-year commitment to establish the largest global
research initiative focused on breast cancer in younger women with the Breast
Cancer Research Foundation
• Signed a second green
Virtual Power Purchase Agreement
for onshore wind in Spain in August 2026, supporting The Estée Lauder Company’s
renewable energy supply and price, while also strengthening grid energy security
and decarbonization
Capital Markets Experience: China Ecosystem Immersion
• The Company announced that it will webcast presentations from its Capital
Markets Experience in Shanghai, China, on November 4, 2026. The presentations
will discuss its long-term strategy to drive sustainable growth and stronger
profitability, featuring senior and local leaders discussing Beauty Reimagined
in action in China and its role as a blueprint for deploying global
capabilities.
Page 5 of19
FISCAL 2027 FIRST QUARTER RESULTS BY PRODUCT CATEGORY AND BY REGION
Net
Sa…
by
Pr…
Ca…
(U…
Thr…
Mon…
End…
Sep…
30
Net Per…
Sal… Cha…
Impa… Org…
($ Rep… of Net
in 2026 2025 Bas… Fore… Sal…
mi… Curr… (No…
Tran…
Sk… $ 1,6… $ 1,575 5 % -1 % 4 %
Ca…
Ma… 1,0… 1,030 2 — 1
Fr… 861 721 19 — 20
Ha… 128 129 -1 1 —
Ca…
Ot… 28 25 12 — 12
Su… $ 3,7… $ 3,480 7 % -1 % 6 %
Re…
as…
wi…
re… -1 1
and
ot…
ac…
To… $ 3,7… $ 3,481 7 % -1 % 6 %
1P…
are
ca…
on
an
in…
ba…
…
…
…
…
…
…
… … …
… … …
… … … …
… … … …
… … …
…
…
… … … … … … … … …
… …
$ … $ … $ … $ — $ — $ … $ … … % … %
3 … … — — 3 … … …
… … … — — … … … …
5 … … — — 5 … … …
… 9 4 — — … 9 … …
$ … $ … $ … $ — $ — $ … $ … … % … %
… … …
$ … $ … $ …
Page 6 of19
The product category net sales commentary below reflects organic net sales,
excluding the (favorable)/unfavorable impacts from foreign currency translation.
As there were no non-GAAP adjustments to product category results in the fiscal
2027 and 2026 first quarters, the commentary below reflects both reported and
adjusted operating results. In addition to the Operational Highlights above,
below are the drivers of the Company’s performance.
Skin Care
• Skin Care net sales increased 4%, primarily driven by growth from La Mer and
The Ordinary.
◦ Net sales increased from La Mer, benefitting from innovation, including the
new The Concentrate Serum, as well as continued success of The Treatment Lotion
product franchise.
◦ The Ordinary net sales increased, reflecting targeted expanded consumer reach,
along with growth in existing distribution supported by key activations, by the
success of its Glycolic Acid 7% Exfoliating Toner and the launch of Lacto‑PDRN
4% + B9 Eye Cream.
• Skin Care operating income increased 40%, primarily due to the increase in net
sales as well as the reduction in non-consumer-facing expenses, partially offset
by the net increase in consumer-facing investments, including to support new
product launches, key activations and distribution expansion.
Makeup
• Makeup net sales grew 1%, primarily driven by M·A·C, partially offset by the
decline from Estée Lauder.
◦ Net sales increased from M·A·C, benefitting from targeted expanded consumer
reach—including the fiscal 2026 second-half launches in select U.S. and Middle
East Sephora locations, in Sephora at Kohl’s and online in these markets—which,
along with the launches of Lustreglass Sheer-Shine Lipstick and Lustreglass
Stainglass Lip Tint, fueled the growth in the lip subcategory.
◦ Estée Lauder net sales declined, reflecting lower net sales in the face
subcategory, including the timing of fiscal 2027 new product launches, partially
offset by incremental sales from the next-generation of Double Wear Stay-in-
Place Longwear Matte Foundation that launched in the second half of fiscal 2026.
• Makeup operating results improved to income from a loss in the prior year,
primarily due to the increase in net sales as well as the reduction in non-
consumer-facing expenses. This was partially offset by the net increase in
consumer-facing investments—net of the strategic reduction in selling
expenses—including those to support distribution expansion, key activations and
new product launches.
Fragrance
• Fragrance net sales increased 20%, driven by double-digit growth from the
Company’s Luxury Brands—led by Le Labo, TOM FORD, Jo Malone London and KILIAN
PARIS—and from Estée Lauder.
Page 7 of19
◦ Net sales increased from Le Labo, primarily due to the ongoing success of its
Classic Collection, including Another 13 and Santal 33, and its City
Exclusives—including Gaiac 10 and the launch of Shiu 25, the Beijing City
Exclusive. This reflects growth from both targeted expanded consumer reach and
existing distribution.
◦ TOM FORD net sales increased, benefitting from innovation across both the
Private Blend and Signature product franchises—including Tobacco Chocolat and
Ombré Leather Reserve—which created a halo effect that supported existing
product sales growth.
◦ Net sales from Jo Malone London increased, driven by innovation—such as Sea
Salt & Bergamot—and growth from hero product franchises, both supported by
targeted expanded consumer reach.
◦ The net sales growth from Estée Lauder was driven by the launch of Glimmer,
the brand’s first gourmand scent.
◦ Net sales increased from KILIAN PARIS—the Company’s fastest growing Luxury
Brand—reflecting innovation success from The Cocktails Collection and continued
strength from its hero products, along with growth from targeted expanded
consumer reach.
• Fragrance operating income increased 93%, primarily due to the increase in net
sales, partially offset by increased consumer-facing investments, including
those to support new product launches, key activations and distribution
expansion.
Hair Care
• Hair Care net sales were flat, primarily driven by growth from The Ordinary,
offset by the decline from Aveda:
◦ Net sales growth from The Ordinary was fueled by continued success of Multi-
Peptide Serum for Hair Density as well as targeted expanded consumer reach.
◦ The decline in net sales from Aveda, reflected lower shipments primarily due
to brand-specific supply chain logistical challenges.
• Hair Care operating results improved to income from a loss in the prior year,
reflecting the reduction in non-consumer-facing expenses and lower cost of
sales.
Page 8 of19
Net
Sa…
by
Ge…
Re…
(U…
Thr…
Mon…
End…
Sep…
30
Net Per…
Sal… Cha…
Impa… Org…
($ Rep… of Net
in 2026 2025 Bas… Fore… Sal…
mi… Curr… (No…
Tran…
The $ 1,2… $ 1,174 5 % — % 4 %
Am…
EU… 923 901 2 1 4
As… 952 873 9 1 10
Ma… 614 532 15 -7 9
Ch…
Su… $ 3,7… $ 3,480 7 % -1 % 6 %
Re…
as…
wi…
re… -1 1
and
ot…
ac…
To… $ 3,7… $ 3,481 7 % -1 % 6 %
1P…
are
ca…
on
an
in…
ba…
…
…
…
…
…
…
… … …
… … … …
… … … …
… … …
…
…
… … … … … … … … …
… …
$ … $ … $ … $ — $ — $ … $ … … % … %
… 6 … — — … 6 … …
… … … — — … … … …
… … … — — … … … …
$ … $ … $ … $ — $ — $ … $ … … % … %
… … …
$ … $ … $ …
The geographic region net sales commentary below reflects organic net sales,
excluding the (favorable)/unfavorable impact from foreign currency translation.
As there were no non-GAAP adjustments to geographic region results in the fiscal
2027 and 2026 first quarters, the commentary below reflects both reported and
adjusted operating results. In addition to the Operational Highlights above,
below are the drivers of the Company’s performance.
Page 9 of19
Organic Net Sales
- increased 6%, with growth in every geographic region, led by:
• The growth in Asia/Pacific, primarily due to the Company’s Asia travel retail
business, including:
◦ Net sales growth from the Beijing and Shanghai airports, reflecting an
increase in replenishment orders amid continued stabilization following changes
in duty-free retailers—including the related online businesses—that began in the
fiscal 2026 second quarter.
◦ The increase in net sales in Hainan travel retail, primarily driven by the
improvement in online retail sales.
• Growth in Mainland China, driven by both innovation and existing products,
including during key shopping moments, with increased consumer-facing
investments supporting key activations to drive sales growth. Targeted expanded
consumer reach contributed to the growth in both online and brick-and-mortar
channels.
• Continued net sales growth in North America, benefitting from targeted
expanded consumer reach and innovation, supported by consumer-facing investments
to drive sales growth
• The increase in the Company’s Priority Emerging Markets, collectively—led by
Turkey, Mexico and India—with successful innovation and targeted expanded
consumer reach contributing to growth
Operating Income
- increased, due to improvement across all geographic regions.
• The Americas - operating income increased 31%, reflecting higher gross profit
from both the increase in net sales and lower cost of sales, partially offset by
the net increase in consumer-facing investments to drive sales growth, including
to support new product launches and distribution expansion.
• EUKEM - operating margin increased to 4.8% from 0.7%, primarily due the
increase in net sales as well as the reduction in non-consumer-facing expenses.
This was partially offset by the net increase in consumer-facing investments—net
of the strategic reduction in selling expenses—to drive sales growth, including
to support distribution expansion and new product launches.
• Asia/Pacific - operating income increased 73%, reflecting higher gross profit
due to the increase in net sales as well as lower cost of sales.
• Mainland China - operating margin increased to 5.2% from 2.3%, primarily
driven by higher net sales, partially offset by increased consumer-facing
investments to support sales growth, including to support new product launches
and key activations.
QUARTERLY DIVIDEND
Today, the Company announced a quarterly dividend of $.35 per share on its Class
A and Class B Common Stock, payable in cash on December 15, 2026 to stockholders
of record at the close of business on November 30, 2026.
Page 10 of19
OUTLOOK FOR FISCAL 2027 FULL YEAR
The Company is raising its fiscal 2027 full-year outlook, reflecting its strong
performance in the fiscal 2027 first quarter while remaining cautious amid
ongoing geopolitical and macroeconomic uncertainty.
The Company’s fiscal 2027 full-year outlook now assumes:
• Organic net sales growth of 4.0% to 5.5%, ranging from the mid-point to above
the high-end of the previously communicated range of 3% to 5%
• Adjusted operating margin to range between 12.9% to 13.7%, an increase from
the previously communicated range of 12.7% to 13.5%
• Adjusted diluted net earnings per common share to range between $3.20 to
$3.45, an increase from the previously communicated range of $3.10 to $3.35
Reconciliation
between GAAP
and Non-GAAP -
Net Sales Current -
Growth November 2, Prior - August
(Unaudited) 2026 19, 2026
──────────────────────────────────────────────────────────────────────────────
Twelve Months Twelve Months
Ending Ending
June 30, June 30,
2027(1) 2027(2)
As Reported - 5.0% - 6.5% 3% - 5%
GAAP
Impact of
foreign 1 —
currency
translation
Impact of
Forest — —
Essentials
Returns
associated
with — —
restructuring
and other
activities
Organic, 4.0% - 5.5% 3% - 5%
Non-GAAP
(1)Represents
forecast,
using spot
rates
as of
September 30,
2026.
(2)Represents
forecast,
using spot
rates
as of June 25,
2026.
…
…
…
…
…
-
…
…
…
… C… P…
… - -
… N… A…
… 2, 1…
… 2… 2…
──────────────────────────────────────────────────────────────────────────────
T… T…
M… M…
E… E…
J… J…
30 30
2… 2… G… 2… 20… G…
…
… $2… $…
… - $ .50 10… - $ .… 10…
- $3… $…
…
…
… .… .…
… - 1… - 1.…
… .… .…
…
…
…
… .10 — — —
…
…
…
…
… -.…
… - — — —
… (.…
…
…
…
…
…
… — .… — .18
…
…
… $3… 28% $… 24%
… - $ 2.… - - $ 2… -
- $3… 38% $… 34%
…
…
…
… -… -.…
…
…
…
… $3… 26% $… 22%
… - $ 2.… - - $ 2… -
… $3… 36% $… 32%
-
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
Page 11 of19
The Company has now reflected the following assumptions in its fiscal 2027 full-
year outlook:
• Organic net sales growth of 4.0% to 5.5%, ranging from the mid-point to above
the high-end of the previously communicated range, and reflecting:
◦ Greater increase in the first half compared to the second due to: (i) more new
product launches earlier in fiscal 2027, (ii) an increase in travel retail
shipments reflecting retail trend improvements entering fiscal 2027 and (iii) a
lower base of travel retail shipments in the first half of fiscal 2026 relative
to the second half
◦ Continued growth in Fragrance and Skin Care, as well as a return to growth in
Makeup for the full year
◦ More diversified growth across geographic regions
▪ In EUKEM, stronger growth is expected in the second half of fiscal 2027,
reflecting an easier comparison to the prior-year period, which was negatively
impacted by business disruptions related to the conflict in the Middle East
▪ Based on current conditions and the Company’s assessment to date, it does not
expect the conflict in the Middle East to have a material impact on its fiscal
2027 results, and will continue to monitor the situation closely. The Company
also assumes the stabilization from recent disruptions in other key markets in
EUKEM.
• Adjusted operating margin of 12.9% to 13.7%
• An adjusted effective tax rate in the range of approximately 33% to 34%
• On October 5, 2026, the Company completed the acquisition of the remaining
equity interest in Mountain Valley Springs India Private Limited, the owner of
the Forest Essentials brand. The brand’s fiscal 2027 results are not expected to
have a material impact on the Company’s consolidated net sales or diluted net
earnings per common share.
• Diluted weighted-average shares outstanding of approximately 368 million
shares
• Net cash flows provided by operating activities to be between $1.4 billion and
$1.5 billion, an increase from the previously communicated range of $1.3 billion
to $1.4 billion. This is a decrease from fiscal 2026, reflecting higher
restructuring payments as well as an increase in working capital needs to
support growth.
• Capital expenditures to be approximately 4% of projected sales, reflecting the
Company’s continued focus on optimizing its overall investments as it
prioritizes consumer-facing investments to fuel growth—including upgrades to
existing brick-and-mortar and online distribution channels, along with targeted
expanded consumer reach
• No deterioration in the geopolitical landscape or related impacts, including
tariffs and consumer sentiment
CONFERENCE CALL AND WEBCAST DETAILS
The Estée Lauder Companies will host a conference call at 8:30 a.m. (ET) today,
November 2, 2026
to discuss its results for the fiscal 2027 first quarter.
The call will also be webcast live at
http://www.elcompanies.com/investors/events-and-presentations and will be
available for replay until February 2, 2027.
Page 12 of19
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this press release, in particular those in “Outlook,” as well as
remarks by the CEO and other members of management, may constitute forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements may address the Company’s expectations
regarding sales, earnings or other future financial performance and liquidity,
other performance measures, product introductions, entry into new geographic
regions, information technology initiatives, new methods of sale, the Company’s
long-term strategy, restructuring and other charges and resulting cost savings,
and future operations or operating results. These statements may contain words
like “expect,” “will,” “will likely result,” “would,” “believe,” “estimate,”
“planned,” “plans,” “intends,” “may,” “should,” “could,” “anticipate,”
“estimate,” “project,” “projected,” “forecast,” and “forecasted” or similar
expressions. Although the Company believes that its expectations are based on
reasonable assumptions within the bounds of its knowledge of its business and
operations, actual results may differ materially from the Company’s
expectations. Factors that could cause actual results to differ from
expectations include, without limitation:
(1) increased competitive activity from companies in the skin care, makeup,
fragrance and hair care businesses;
(2) the Company’s ability to develop, produce and market new products on which
future operating results may depend and to successfully address challenges in
the Company’s business;
(3) consolidations, restructurings, bankruptcies and reorganizations in the
retail industry causing a decrease in the number of stores that sell the
Company’s products, an increase in the ownership concentration within the retail
industry, ownership of retailers by the Company’s competitors or ownership of
competitors by the Company’s customers that are retailers and the Company’s
inability to collect receivables;
(4) destocking and tighter working capital management by retailers;
(5) the success, or changes in timing or scope, of new product innovation,
including launches, and the success, or changes in timing or scope, of
advertising, sampling and merchandising programs;
(6) shifts in the preferences of consumers as to how they perceive value and
where and how they shop;
(7) social, political and economic risks to the Company’s foreign or domestic
manufacturing, distribution and retail operations, including changes in foreign
investment and trade policies and regulations of the host countries and of the
United States;
(8) changes in the laws, regulations and policies (including the interpretations
and enforcement thereof) that affect, or will affect, the Company’s business,
including those relating to its products or distribution networks, changes in
accounting standards, tax laws and regulations, environmental or climate change
laws, regulations or accords, trade rules and customs regulations, and the
outcome and expense of legal or regulatory proceedings, and any action the
Company may take as a result;
(9) foreign currency fluctuations affecting the Company’s results of operations
and the value of its foreign assets, the relative prices at which the Company
and its foreign competitors sell products in the same markets and the Company’s
operating and manufacturing costs outside of the United States;
(10) changes in global or local conditions, including those due to volatility in
the global credit and equity markets, government economic policies, natural or
man-made disasters, real or
Page 13 of19
perceived epidemics, supply chain challenges, inflation, or increased energy
costs, that could affect consumer purchasing, the willingness or ability of
consumers to travel and/or purchase the Company’s products while traveling, the
financial strength of the Company’s customers, suppliers or other contract
counterparties, the Company’s operations, the cost and availability of capital
which the Company may need for new equipment, facilities or acquisitions, the
returns that the Company is able to generate on its pension assets and the
resulting impact on funding obligations, the cost and availability of raw
materials and the assumptions underlying the Company’s critical accounting
estimates;
(11) shipment delays, commodity pricing, depletion of inventory and increased
production costs resulting from disruptions of operations at any of the
facilities that manufacture the Company’s products or at the Company’s
distribution or inventory centers, including disruptions that may be caused by
the implementation of information technology initiatives, or by restructurings;
(12) real estate rates and availability, which may affect the Company’s ability
to increase or maintain the number of retail locations at which the Company
sells its products and the costs associated with the Company’s other facilities;
(13) changes in product mix to products which are less profitable;
(14) the Company’s ability to acquire, develop or implement new information
technology, including operational technology and websites, on a timely basis and
within the Company’s cost estimates; to maintain continuous operations of its
new and existing information technology; and to secure the data and other
information that may be stored in such technologies or other systems or media;
(15) the Company’s ability to capitalize on opportunities for improved
efficiency, such as publicly-announced strategies and restructuring and cost-
savings initiatives, and to integrate acquired businesses and realize value
therefrom;
(16) consequences attributable to local or international conflicts around the
world, as well as from any terrorist action, retaliation and the threat of
further action or retaliation;
(17) the timing and impact of acquisitions, investments and divestitures; and
(18) additional factors as described in the Company’s filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K for
the fiscal year ended June 30, 2026.
The Company assumes no responsibility to update forward-looking statements made
herein or otherwise.
The Estée Lauder Companies Inc. is one of the world’s leading manufacturers,
marketers and sellers of quality skin care, makeup, fragrance and hair care
products, and is a steward of luxury and prestige brands globally. The Company’s
products are sold in approximately 150 countries and territories under brand
names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La
Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London, Bumble and bumble, Darphin
Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frédéric
Malle, GLAMGLOW, KILIAN PARIS, Too Faced, Dr.Jart+, the DECIEM family of
brands—including The Ordinary, NIOD, Avestan and Loopha—as well as Balmain
Beauty and Forest Essentials.
ELC-F
ELC-E
Page 14 of19
($ in
CONSOLI… millions, Three
STATEME… except Months
OF per Ended
EARNINGS share September Percenta…
(Unaudi… data) 30 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
Net $ 3,715 $ 3,481 7 %
sales(A)
Cost of 902 927 -3
sales(A)
Gross 2,813 2,554 10
profit
Gross 75.7 % 73.4 %
margin
Operati…
expenses
Selling,
general 2,365 2,296 3
and
adminis…
Restruc…
and 40 89 -55
other
charges…
Total
operati… 2,405 2,385 1
expenses
Operati…
expense 64.7 % 68.5 %
margin
Operati… 408 169 100+
income
Operati…
income 11.0 % 4.9 %
margin
Interest 83 86 -3
expense
Interest
income
and 25 30 -17
investm…
income,
net
Other
compone…
of net 5 4 25
periodic
benefit
cost
Earnings
before 345 109 100+
income
taxes
Provisi…
for 112 62 81
income
taxes
Net $ 233 $ 47 100+%
earnings
Net
earnings
per
common
share
Basic $ .64 $ .13 100+%
Diluted $ .64 $ .13 100+%
Weighte…
common
shares
outstan…
Basic 363.3 361.2
Diluted 366.1 363.3
(A)Incl…
in net
sales,
cost of
sales
and
restruc…
and
other
charges
are
the
impacts
of
returns
and
charges
associa…
primari…
with the
restruc…
program
compone…
of the
PRGP.
Additio…
informa…
about
the
restruc…
program
compone…
of the
PRGP is
included
in the
notes to
consoli…
financi…
stateme…
in the
Company…
Annual
Report
on Form
10-K for
the
fiscal
year
ended
June 30,
2026.
Page 15 of19
This earnings release includes some non-GAAP financial measures relating to
charges associated with restructuring and other activities and adjustments, as
well as organic net sales and free cash flow. Included herein are
reconciliations between the non-GAAP financial measures and the most directly
comparable GAAP measures for certain consolidated statements of earnings
accounts and consolidated statements of cash flow line items before and after
the relevant adjustments. The Company uses certain non-GAAP financial measures,
among other financial measures, to evaluate its operating performance, which
represent the manner in which the Company conducts and views its business.
Management believes that excluding certain items that are not comparable from
period-to-period, or do not reflect the Company’s underlying ongoing business,
provides transparency for such items and helps investors and others compare and
analyze operating performance from period-to-period. In the future, the Company
expects to incur charges or adjustments similar in nature to those presented
herein; however, the impact to the Company’s results in a given period may be
highly variable and difficult to predict. For free cash flow, this measure
represents how much cash the Company has available from operations after the
deduction of capital expenditures, which are a recurring and necessary use of
cash. The Company’s non-GAAP financial measures may not be comparable to
similarly titled measures used by, or determined in a manner consistent with,
other companies. While the Company considers the non-GAAP measures useful in
analyzing its results, they are not intended to replace, or act as a substitute
for, any presentation included in the consolidated financial statements prepared
in conformity with U.S. GAAP.
The Company operates on a global basis, with the majority of its net sales
generated outside the United States. Accordingly, fluctuations in foreign
currency exchange rates can affect the Company’s results of operations.
Therefore, the Company presents certain net sales, operating results, provision
for income taxes and diluted net earnings per common share information excluding
the effect of foreign currency rate fluctuations to provide a framework for
assessing the performance of its underlying business outside the United States.
Constant currency information compares results between periods as if exchange
rates had remained constant period-over-period. The Company calculates constant
currency information by translating current-period results using prior-year
period monthly average foreign currency exchange rates and adjusting for the
period-over-period impact of foreign currency cash flow hedging activities.
Reconcili…
between
GAAP and
Non-GAAP Three Months
Net Sales ($ in Ended Percentage
(Unaudite… millions) September 30 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
Net Sales $ 3,715 $ 3,481 7 %
Non-GAAP
Adjustmen…
Returns
associated
with 1 -1
restructu…
and other
activities
Adjusted
Net Sales, 3,716 3,480
Non-GAAP
Impact of
foreign -20 —
currency
translati…
Organic
Net Sales, $ 3,696 $ 3,480 6 %
Non-GAAP
Page 16 of19
Reconci…
of
Certain
Consoli…
Stateme…
of
Earnings
Accounts
Before
and
After
Returns, ($ in
Charges millions, Three
and except Months
Other per Ended
Adjustm… share September Percenta…
(Unaudi… data) 30 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
Gross $ 2,813 $ 2,554 10 %
Profit
Non-GAAP
Adjustm…
Restruc…
and 1 -3
other
activit…
Adjusted
Gross $ 2,814 $ 2,551 10 %
Profit,
Non-GAAP
Impact
of
foreign -8 —
currency
transla…
Adjusted
Gross
Profit, $ 2,806 $ 2,551 10 %
Non-GAAP
constant
currency
Gross 75.7 % 73.4 %
Margin
Non-GAAP
Adjustm…
Restruc…
and — -0.1
other
activit…
Adjusted
Gross 75.7 % 73.3 %
Margin,
Non-GAAP
Operati… $ 408 $ 169 100+%
Income
Non-GAAP
Adjustm…
Restruc…
and 41 86
other
charges
Adjusted
Operati… $ 449 $ 255 76 %
Income,
Non-GAAP
Impact
of
foreign 9 —
currency
transla…
Adjusted
Operati…
Income, $ 458 $ 255 80 %
Non-GAAP
constant
currency
Operati… 11.0 % 4.9 %
Margin
Non-GAAP
Adjustm…
Restruc…
and 1.1 2.4
other
charges
Adjusted
Operati… 12.1 % 7.3 %
Margin,
Non-GAAP
Provisi…
for $ 112 $ 62 81 %
Income
Taxes
Effecti…
Tax Rate 32.5 % 56.9 %
("ETR")
Tax
Impact
on
Non-GAAP
adjustm…
Restruc…
and 11 17
other
charges
Adjusted
Provisi…
for $ 123 $ 79
Income
Taxes,
Non-GAAP
Adjusted
ETR, 31.9 % 40.5 %
Non-GAAP
Diluted
Net
Earnings $ .64 $ .13 100+%
Per
Common
Share
Non-GAAP
Adjustm…
Restruc…
and .08 .19
other
charges
Adjusted
Diluted
Net
Earnings $ .72 $ .32 100+%
Per
Common
Share,
Non-GAAP
Impact
of
foreign .01 —
currency
transla…
Adjusted
Diluted
Net
Earnings
Per $ .73 $ .32 100+%
Common
Share,
Non-GAAP
constant
currency
1Percen…
are
calcula…
on an
individ…
basis.
Reconciliation of
Certain Consolidated
Statements of Cash
Flows Accounts
Cash Flows from
Operating Activities
to Free Cash Flow Three Months Ended
(Unaudited) ($ in millions) September 30 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net cash flows used
for operating $ -166 $ -340
activities
Less: capital -69 -96
expenditures
Free cash flow $ -235 $ -436
Page 17 of19
CONDENSED
CONSOLIDAT…
BALANCE
SHEETS
(Unaudited,
except
where September September
noted) 30, 2026 June 30, 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
($ in -Audited
millions)
ASSETS
Cash and
cash $ 3,198 $ 3,498 $ 2,219
equivalents
Accounts
receivable, 1,914 1,518 1,884
net
Inventory
and 2,147 1,999 2,062
promotional
merchandise
Prepaid
expenses
and other 565 597 549
current
assets
Total
current 7,824 7,612 6,714
assets
Property,
plant and 2,707 2,805 3,065
equipment,
net
Operating
lease 1,752 1,740 1,889
right-of-u…
assets
Other 7,680 7,605 7,661
assets
Total $ 19,963 $ 19,762 $ 19,329
assets
LIABILITIES
AND EQUITY
Current $ 503 $ 503 $ 3
debt
Accounts 1,472 1,578 1,289
payable
Operating
lease 392 399 415
liabilities
Other
accrued 3,888 3,751 3,376
liabilities
Total
current 6,255 6,231 5,083
liabilities
Long-term 6,748 6,803 7,320
debt
Long-term
operating 1,557 1,541 1,684
lease
liabilities
Other
noncurrent 1,365 1,381 1,352
liabilities
Total
noncurrent 9,670 9,725 10,356
liabilities
Total 4,038 3,806 3,890
equity
Total
liabilities $ 19,963 $ 19,762 $ 19,329
and equity
Page 18 of19
SELECT CASH FLOW DATA Three Months Ended
(Unaudited) ($ in millions) September 30 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net earnings $ 233 $ 47
Adjustments to
reconcile net earnings
to
net cash flows from
operating
activities:
Depreciation and 191 200
amortization
Deferred income taxes -71 -34
Other items 93 82
Changes in operating
assets and
liabilities:
Increase in accounts -399 -358
receivable, net
(Increase) decrease in
inventory and -146 6
promotional
merchandise
Increase in other -6 -11
assets, net
Decrease in accounts
payable and other -61 -272
liabilities, net
Net cash flows used
for operating $ -166 $ -340
activities
Other Investing and
Financing Uses:
Capital expenditures $ -69 $ -96
Dividends paid to -126 -127
stockholders
Payment of deferred — -150
consideration
Supplemental cash flow
information:
Cash paid for interest $ 56 $ 62
Cash paid for income 29 148
taxes
###
Page 19 of19