Financial Data and Key Metrics Changes - The company reported organic sales growth of 3% in the first quarter, a significant improvement from a 13% decline in the previous quarter [4][16]. - Gross margin expanded by 60 basis points to 73.3%, while operating margin increased by 300 basis points to 7.3% compared to the previous year [17][19]. - Diluted EPS more than doubled to $0.32, up from $0.14 last year [19]. Business Line Data and Key Metrics Changes - Fragrance category saw double-digit growth, while skincare experienced low single-digit growth [16]. - Makeup and hair care categories declined, contributing to a low single-digit decrease in the Americas [17]. - The Ordinary brand drove share gains in skincare, while Aveda contributed to share gains in hair care [7][11]. Market Data and Key Metrics Changes - Mainland China contributed positively to growth, with the company outperforming the prestige beauty market, achieving double-digit growth [5][42]. - High single-digit growth was reported in priority emerging markets, including Mexico, Turkey, and India [4]. - The UK market showed resilience with nearly 10% industry sales growth, while France and Spain also saw share gains [8][10]. Company Strategy and Development Direction - The company is focused on its "Beauty Reimagined" action plan, which includes enhancing consumer coverage, driving innovation, and increasing consumer-facing investments [5][12]. - A new partnership with Shopify aims to modernize and scale the direct-to-consumer business [14]. - The company plans to expand its presence in various channels, including Amazon and TikTok Shop, to better connect with younger consumers [9][78]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiscal 2024 outlook, emphasizing the importance of sustainable sales growth and rebuilding operating margins [5][24]. - The macroeconomic environment remains dynamic, with ongoing challenges in certain markets, particularly in the East [22][44]. - The company anticipates a non-linear growth path, with potential headwinds from tariffs impacting profitability by approximately $100 million [23]. Other Important Information - The company opened 14 net new freestanding stores and launched several new campaigns to enhance consumer engagement [12][15]. - The fiscal 2025 Social Impact and Sustainability Report highlighted achievements in climate, water, waste, and social investment [15]. Q&A Session Summary Question: Volume trends versus price mix - Management noted significant share gains driven by volume, with strategic price adjustments contributing to new consumer acquisition [26][30]. Question: Clarity on full-year guidance - Management explained that while Q1 results were strong, macro volatility and challenging comparisons in the second half influenced the decision to maintain guidance [40][46]. Question: Margin outlook for the year - Management reaffirmed guidance for gross and operating margins, indicating confidence in sequential improvement despite potential tariff impacts [52][54]. Question: Asia travel retail inventory levels - Management confirmed that travel retail inventory is appropriately sized relative to demand, with positive momentum observed in certain markets [60][66]. Question: Opportunities in new channels - Management emphasized the importance of moving quickly into new channels and enhancing existing ones, with ongoing efforts to expand distribution and consumer engagement [74][78].

Financial Data and Key Metrics Changes - The company reported organic sales growth of 3% in Q1 2026, a significant improvement from a 13% decline in Q4 2025 [4][16] - Gross margin expanded by 60 basis points to 73.3%, while operating margin increased by 300 basis points to 7.3% compared to the previous year [17][19] - Diluted EPS more than doubled to $0.32, up from $0.14 last year [19] Business Line Data and Key Metrics Changes - Fragrance category saw double-digit growth, while skincare grew low single-digit [16][17] - The Ordinary brand contributed significantly to skincare share gains, while Aveda led share gains in hair care [6][17] - The Estée Lauder brand achieved its third consecutive quarter of overall share gain in the U.S. across skincare, makeup, and fragrance [6] Market Data and Key Metrics Changes - Mainland China contributed positively to the return to growth, with double-digit retail sales growth, outperforming the Prestige Beauty market [5][6] - The Americas experienced low single-digit sales decline, driven by makeup and hair care categories [16][17] - Travel retail showed improvement, particularly in Asia Pacific, with double-digit growth in Japan [60] Company Strategy and Development Direction - The company is focused on its "Beauty Reimagined" action plan, which includes enhancing consumer coverage, driving innovation, and increasing consumer-facing investments [5][12] - A new partnership with Shopify aims to modernize and scale the direct-to-consumer business [13] - The company plans to expand its presence in various online channels, including TikTok Shop and Amazon [8][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiscal 2026 outlook, despite macroeconomic volatility and challenges in certain markets [15][21] - There is optimism regarding consumer sentiment in mainland China, although it remains subdued compared to historical levels [21][43] - The company anticipates a challenging second half of the fiscal year due to tougher comparisons from the previous year [21][22] Other Important Information - The company has achieved several sustainability goals since 2019 and is committed to advancing women's and girls' health, education, and leadership [14][15] - The company recorded $697 million in cumulative restructuring charges primarily related to employee costs [19] Q&A Session All Questions and Answers Question: Volume trends versus price mix - Management noted significant share gains from volume, driven by price adjustments and new product launches, particularly in the U.S. market [24][28] - The focus is on driving unit growth and bringing new consumers to the brand [30][32] Question: Short-term clarity on guidance - Management explained that while Q1 results were strong, the full-year guidance remains cautious due to macroeconomic challenges [39][41] - There is confidence in sustaining share gains in mainland China, with a focus on maintaining momentum [41][43] Question: Margin outlook - Management reaffirmed guidance for gross and operating margins, indicating confidence in achieving targets despite potential tariff impacts [50][52] - The focus remains on consumer-facing investments while managing non-consumer-facing expenses [51][53] Question: Travel retail inventory and demand trends - Travel retail remains volatile, but there are signs of recovery, particularly in Japan and other emerging markets [58][60] - Inventory levels are now aligned with demand, and management is optimistic about future retail activations [63][64] Question: Opportunities in new channels - The company is actively pursuing new distribution channels and enhancing existing ones, including partnerships with platforms like TikTok and Shopify [71][72] - There is a commitment to moving quickly to meet consumer demands across various regions [75] Question: Phasing of margin expansion - Management indicated that while Q1 showed strong performance, it is too early to change the phasing of margin expectations for the year [80][81] - The focus remains on building consistent sales while investing in growth opportunities [82][86]

Core Insights - Estee Lauder exceeded Wall Street expectations for Q1 sales and profit, driven by strong demand for Le Labo and Tom Ford fragrances, alongside a recovery in China [1][4] - The company's shares rose approximately 7% in premarket trading following the announcement [1] Group 1: Financial Performance - Estee Lauder reported quarterly sales of $3.48 billion, surpassing analysts' estimates of $3.38 billion [4] - The adjusted profit for the quarter ending September 30 was 32 cents per share, significantly above the estimated 18 cents per share [4] - Organic net sales increased by 3% after a decline of 5% in the previous year [3] Group 2: Strategic Initiatives - Under CEO Stephane de La Faverie, the company has focused on luxury product launches, supply chain optimization, and enhanced marketing efforts to revive sales [2] - The company is shifting production closer to key markets to adapt to changing trade policies that have impacted the retail industry [2] Group 3: Market Trends - The fragrance category experienced a notable organic sales growth of 13% in the latest quarter [3] - Sales in China and the Asia Pacific regions rose by 9%, indicating a positive trend in these markets [3] - Analysts suggest that the worst of the luxury slump in China may be over, positioning the company for long-term growth [4]

Estee Lauder (EL) came out with quarterly earnings of $0.32 per share, beating the Zacks Consensus Estimate of $0.16 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this beauty products company would post earnings of $0.08 per share when it actually produced earnings of $0.09, delivering a surprise of +12.5%.Over the last four quarters, ...

Financial Performance - Net sales for the first quarter of fiscal 2026 increased by 4% to $3.481 billion, with organic net sales rising by 3%[6] - Gross margin expanded by 100 basis points to 73.4%, while adjusted gross margin increased by 60 basis points to 73.3%, driven by operational efficiencies from the Profit Recovery and Growth Plan[6] - Operating income improved significantly to $169 million, compared to a loss of $121 million in the prior year, resulting in an operating margin of 4.9%[6] - Diluted net earnings per share rose to $0.13, compared to a loss of $0.43 in the previous year, with adjusted diluted net earnings per share increasing to $0.32 from $0.14[6] - Net earnings for the quarter were $47 million, a substantial recovery from a net loss of $156 million in the same quarter last year[49] - Adjusted operating income, excluding restructuring and litigation charges, was $255 million, a 77% increase from $144 million in the previous year[54] - The effective tax rate for the quarter was 56.9%, compared to 13.3% in the same quarter last year[54] Sales Performance by Category - Skin Care net sales grew by 3%, primarily due to strong performance from La Mer and Estée Lauder, benefiting from the Asia travel retail business[14] - Fragrance net sales surged by 13%, driven by strong growth from Luxury Brands such as Le Labo and TOM FORD, supported by expanded consumer reach[18] Regional Sales Performance - The Americas reported net sales of $1,174 million, a decrease of 2% compared to the previous year, with operating income increasing significantly to $87 million from a loss of $85 million[22] - EUKEM net sales increased by 4% to $901 million, while operating income decreased by 40% to $6 million due to increased consumer-facing investments[22][28] - Asia/Pacific net sales rose by 8% to $873 million, with operating income increasing to $150 million, reflecting strong growth in the global travel retail business[22][28] - Mainland China experienced a 9% increase in net sales to $532 million, with operating income at $12 million, despite challenges in the prior year[22][28] Product Development and Distribution - The Company launched several new products, including Advanced Night Repair Eye Lift + Sculpt Eye Cream and Re-Nutriv Ultimate Diamond Age Reversal Treatment Lotion, enhancing its product offerings[9] - The Company expanded its online distribution, launching brands on Amazon in Mexico and Canada, and increasing presence on TikTok Shop globally[10] - The Company opened a global Fragrance Atelier in Paris, focusing on next-generation perfume artistry and innovation[10] Restructuring and Future Outlook - The company expects restructuring charges between $1.2 billion and $1.6 billion, with annual gross benefits projected between $0.8 billion and $1.0 billion once fully implemented[30] - A net reduction of 5,800 to 7,000 positions is anticipated as part of the restructuring program, with over 4,000 positions already approved[31][33] - The company has recognized cumulative restructuring charges of $697 million through September 30, 2025, with $87 million recognized in the fiscal 2026 first quarter[32] - Fiscal 2026 full-year outlook reaffirms net sales growth of 2% to 5%, with organic growth expected to be between 0% and 3%[39] - The company anticipates tariff-related headwinds to impact fiscal 2026 profitability by approximately $100 million, with ongoing evaluations of mitigation strategies[36] Cash Flow and Assets - The company reported a net cash flow used for operating activities of $340 million for the three months ended September 30, 2025, an improvement from $670 million in the prior year[58] - Total assets decreased to $19,329 million as of September 30, 2025, down from $21,317 million a year earlier, reflecting a decline of approximately 9.3%[56] - Total current liabilities decreased to $5,083 million from $5,486 million, a reduction of about 7.3% year-over-year[56] - Capital expenditures for the three months ended September 30, 2025, were $96 million, compared to $141 million in the same period last year, indicating a decrease of approximately 31.9%[58] - Inventory and promotional merchandise decreased slightly to $2,062 million from $2,255 million, a decline of about 8.6% year-over-year[56] - Long-term debt remained stable at $7,320 million, showing a slight increase from $7,311 million a year ago[56] - Total equity increased to $3,890 million from $5,084 million, reflecting a decrease of approximately 23.5% year-over-year[56] Dividend Announcement - The quarterly dividend announced is $0.35 per share, payable on December 15, 2025[27]

Core Viewpoint - The cosmetics industry is undergoing a strategic transformation from basic moisturizing to efficacy-driven and scientific approaches, with peptides emerging as key active ingredients in anti-aging skincare products [3][4]. Market Size and Growth Trends - The global peptide cosmetics market is rapidly growing, with projections indicating a market size of $2.566 billion in 2024, expected to reach $5.716 billion by 2031, reflecting a compound annual growth rate (CAGR) of 12.3% during the forecast period [6][8]. - In 2024, over 55 million consumers are expected to use peptide skincare products, with 68% targeting wrinkle reduction and skin tightening [9]. Regional Market Performance - The Asia-Pacific region is the largest market for peptide cosmetics, accounting for 36% of global sales, with South Korea alone selling over 12.7 million units in 2023 [10][11]. - North America follows closely, representing 34% of global sales, with the U.S. having over 16.2 million active peptide skincare users [12][13]. - Europe contributes 28% of global sales, with Germany, the UK, and France leading the market [11][12]. Segment Market Performance - Serums are the largest segment, accounting for 38% of global sales, with over 480 peptide serums launched in 2023 [15]. - Moisturizing repair creams hold a 26% market share, while anti-aging creams account for 17% [15]. - Eye creams represent 11% of the segment, with 95 peptide SKUs recorded in 2023 [15]. Sales Channel Performance - Online sales dominate the market, accounting for 46% of total sales, with over 37 million peptide products sold through e-commerce platforms in 2023 [16]. - Specialty cosmetics stores contribute 27% to global sales, while supermarkets account for 18% [16]. Capital Flow and Investment Trends - In 2023, the global peptide cosmetics market attracted over $1.12 billion in funding, primarily directed towards R&D, clinical trials, and sustainable packaging [18][19]. - North America received over $360 million in investments, focusing on biotechnology-based peptide platforms [18]. Product Innovation - Over 110 new peptide products were launched globally between 2023 and 2024, showcasing a trend towards multi-peptide formulations and precision delivery systems [20]. - Brands are increasingly integrating AI for personalized skincare solutions, with over 145 brands utilizing AI skin diagnostic systems [20]. Competitive Landscape - The competitive landscape is shifting, with L'Oréal leading the market, followed by Estée Lauder and emerging brands like Han Shu [21][22]. - Han Shu's Red Waist 2.0 series achieved remarkable sales, emphasizing innovative raw material development and effective marketing strategies [22][25]. Raw Material Market Expansion - The peptide manufacturing market is projected to reach $2.574 billion by 2025, with a CAGR of 5.4% from 2025 to 2035 [26]. - There is a growing trend towards sustainable sourcing of peptides, with plant-based peptides gaining traction [26]. Challenges and Development - High costs and stability issues remain significant challenges, with 41% of brands reporting delays in product launches due to packaging and preservation difficulties [27]. - Regulatory fragmentation is also a concern, with only 27 countries having established guidelines for peptide ingredients [27]. Conclusion - The global peptide cosmetics market is in a phase of high growth and innovation, driven by technological advancements and evolving consumer demands, with a competitive landscape characterized by both established leaders and emerging players [29][31].

Estee Lauder swung to a fiscal first-quarter profit and reiterated its sales-growth projections for the fiscal year as the cosmetics giant regained market share in the key Chinese market. ...

Core Insights - The Estée Lauder Companies reported improved financial results, with net sales increasing by 4% to $3.5 billion in the first quarter ended September 30, surpassing estimates of $3.38 billion [2] - Net earnings rose to $47 million, a significant recovery from a loss of $156 million in the previous year, with adjusted diluted net earnings per share increasing to 32 cents, exceeding analysts' expectations of 18 cents [3] Financial Performance - Organic net sales grew by 3%, indicating a return to growth after a challenging previous year [2] - The company has implemented a restructuring program, resulting in cumulative charges of $852 million and a net reduction of over 4,000 positions [4] Strategic Initiatives - The Beauty Reimagined strategy aims to restore organic sales growth and improve profitability, with a focus on gaining market share in key areas [4] - Despite positive quarterly results, the company maintained its full-year outlook, forecasting sales growth between flat and 3% for fiscal 2026 [5][6] Market Performance - Skin care net sales increased by 3%, driven by La Mer and Estée Lauder, particularly in Asia travel retail [8] - Fragrance sales rose by 13%, while makeup and hair care sales declined by 2% and 7%, respectively [8] Regional Insights - The company experienced a 9% sales growth in mainland China, outperforming the market, while North America faced challenges with a low-single-digit decline [10] - The launch of MAC Cosmetics at Sephora in early 2026 is part of the company's strategy to diversify its retail offerings in the U.S. [11] E-commerce Expansion - The company is expanding its presence on Amazon, recently launching in Mexico, which is identified as a key growth market [12]

Core Insights - Estee Lauder exceeded Wall Street expectations for first-quarter sales, indicating that CEO Stephane de La Faverie's turnaround strategy is starting to take effect, resulting in a share price increase of approximately 6% [1] Financial Performance - The company reported first-quarter sales that surpassed analyst forecasts, suggesting a positive trend in revenue generation [1] Leadership Impact - CEO Stephane de La Faverie's efforts to revitalize the company are showing early signs of success, as reflected in the improved sales figures [1]

Core Viewpoint - Estee Lauder Companies, Inc. is launching a new digital commerce initiative in partnership with Shopify to enhance online-to-store shopping experiences and improve consumer engagement [2][3][5]. Group 1: Partnership and Strategy - Estee Lauder has partnered with Shopify to create a unified online-to-store shopping architecture aimed at accelerating product rollouts and enhancing personalization [2]. - This initiative aligns with Estee Lauder's "Beauty Reimagined" strategy, focusing on smarter consumer engagement and expanding its omnichannel presence [3]. Group 2: Technology and Implementation - The partnership will leverage real-time analytics, artificial intelligence, and Shopify's commerce engine to enhance brand consistency and agility across Estee Lauder's luxury beauty labels [4]. - The initial rollout of this initiative is expected to begin in the first quarter of calendar 2026, supporting direct-to-consumer operations and standalone stores [6]. Group 3: Market Performance - Estee Lauder's stock was up 1.04% at $99.79 during premarket trading, nearing its 52-week high of $104.53 [7].