The Estée Lauder Cos. Shows Signs of Improvement

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]