Core Insights - Estee Lauder Companies, Inc. reported stronger-than-expected quarterly results, driven by broad-based demand across its prestige beauty portfolio [1] - The company’s second-quarter adjusted earnings per share were 89 cents, exceeding the analyst consensus estimate of 83 cents [1] - Quarterly sales reached $4.229 billion, reflecting a 6% year-over-year increase and surpassing the expected $4.219 billion [1] Financial Performance - The firm raised its fiscal 2026 adjusted earnings forecast to a range of $2.03-$2.23 per share from a previous range of $1.90-$2.10, compared to analysts' estimates of $2.15 [3] - Fiscal 2026 sales forecast was increased to $14.756 billion–$15.042 billion from $14.613 billion–$15.042 billion, against analysts' estimates of $14.934 billion [3] - Following the earnings announcement, Estee Lauder shares gained 5.1%, trading at $101.59 [3] Analyst Ratings - Wells Fargo analyst maintained Estee Lauder with an Equal-Weight rating and lowered the price target from $111 to $105 [4] - Telsey Advisory Group analyst maintained a Market Perform rating with a price target of $105 [4] - Citigroup analyst upgraded Estee Lauder from Neutral to Buy, maintaining a price target of $120 [4]

Financial Performance Highlights - Estée Lauder reported a mixed quarter, beating earnings expectations with an operating income of $401 million, a significant improvement from the $(580) million loss in the prior year, which included $861 million in impairments [3] - Gross margin increased by 40 basis points to 76.5%, and first-half free cash flow surged to $581 million from $114 million a year earlier [3] Revenue Breakdown - Makeup sales declined 1% organically to $1.16 billion, affected by an accrual for returns ahead of the Double Wear relaunch [4] - Skin care sales grew 6% organically to $2.05 billion, driven by brands like La Mer, Estée Lauder, and The Ordinary [4] - Fragrance sales also rose 6% to $812 million, supported by TOM FORD and Le Labo [4] China Market Performance - Sales in Mainland China increased by 13%, marking the second consecutive quarter of double-digit growth, which helped mitigate weaknesses in Northern Asian travel retail [5] Guidance and Outlook - Management raised full-year guidance, projecting organic sales growth of 1% to 3% and adjusted EPS of $2.05 to $2.25 [6] - The company anticipates approximately $100 million in tariff-related headwinds in the second half, which may temper growth expectations [6] - CEO Stéphane de La Faverie highlighted the ongoing transformation of the company, emphasizing the impact of the "Beauty Reimagined" initiative [6] Strategic Initiatives - The company plans to expand M·A·C into Sephora US stores by March 2026 and enhance its digital presence on platforms like Amazon and TikTok Shop [7] Stock Market Reaction - Despite the raised guidance, shares fell 18.7% due to revenue miss and anticipated tariff headwinds, with a forward P/E ratio of 58x [8] - Adjusted operating margin improved by 290 basis points to 14.4% from the prior year [8] - EPS was reported at $0.89, beating estimates of $0.86, while revenue was $4.23 billion, in line with estimates [8]

Core Insights - The Estee Lauder Companies Inc. (EL) reported strong second-quarter fiscal 2026 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][2]. Financial Performance - Adjusted earnings per share were 89 cents, surpassing the Zacks Consensus Estimate of 84 cents, and increased 43% from 62 cents in the same quarter last year [3]. - Quarterly net sales reached $4,229 million, beating the Zacks Consensus Estimate of $4,226 million, and increased by 6% year over year. Organic net sales rose 4% to $4,155 million [3]. Category-Wise Revenue Results - Skin Care sales increased by 6% year over year to $2,054 million, driven by brands like La Mer and Estée Lauder [4]. - Makeup revenues declined by 1% year over year to $1,164 million, primarily due to Estee Lauder's performance, although operating performance improved [5]. - Fragrance category revenues rose by 6% to $812 million, led by luxury brands such as TOM FORD and Le Labo [6]. - Hair Care sales totaled $168 million, up 5% year over year, supported by strong demand for The Ordinary [7]. Regional Revenue Results - Sales in the Americas were stable at $1,218 million, while revenues in the EUKEM region increased by 2% to $1,183 million. Asia-Pacific sales rose by 2% to $900 million, with Mainland China seeing a 13% increase to $928 million [8]. Margin Insights - Adjusted gross margin expanded by 40 basis points year over year to 76.5%, aided by the Profit Recovery and Growth Plan (PRGP), despite challenges from tariffs and inflation [9]. - Operating earnings were reported at $401 million, a significant improvement from a loss of $580 million in the prior year [10]. Restructuring and Future Outlook - The company is advancing its PRGP, which is expected to generate annual gross benefits of $0.80-$1.00 billion, with a net workforce reduction of 5,800-7,000 positions [14]. - EL raised its fiscal 2026 outlook, now forecasting net sales growth of 3-5% and adjusted earnings per share of $2.05-$2.25, reflecting strong first-half performance [15][16].

The Estée Lauder Companies (NYSE:EL) Q2 2026 Earnings call February 05, 2026 08:30 AM ET Company ParticipantsAkhil Shrivastava - EVP and CFODara Mohsenian - Morgan StanleyFilippo Falorni - Director of Equity ResearchRainey Mancini - SVP of Investor RelationsStéphane de La Faverie - President and CEOConference Call ParticipantsBonnie Herzog - Managing Director and Senior Consumer AnalystChris Carey - Senior Equity Analyst and Head of Consumer Staples ResearchLauren Lieberman - Managing Director and Senior U. ...

Financial Data and Key Metrics Changes - The company reported a 4% year-over-year organic sales growth, with a 43% increase in EPS, rising from $0.62 to $0.89 [5][20][23] - Gross margin expanded by 40 basis points to 76.5%, while operating margin increased by 290 basis points to 14.4% [22][27] - The effective tax rate decreased to 39.8% from 42.6% due to lower tax expenses related to stock-based compensation [23] Business Line Data and Key Metrics Changes - Skincare and fragrance segments both grew by 6%, contributing significantly to overall sales growth [20] - Makeup category remains at a break-even level, with ongoing efforts to improve profitability through innovation and distribution strategies [60][62] Market Data and Key Metrics Changes - Retail sales in Mainland China showed double-digit growth, outperforming the prestige beauty market [7][8] - In North America, sales were flat, with improvements noted in market share and volume, particularly in skincare and makeup [34][36][80] Company Strategy and Development Direction - The company is focused on its "Beauty Reimagined" initiative, aiming for operational, leadership, and cultural transformation to enhance consumer-centricity [6][15] - Expansion into high-growth channels such as Amazon and TikTok Shop is a priority, with 12 brands now present on Amazon [9][88] - The company is also investing in travel retail and pharmacy channels to diversify its business [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's turnaround, raising the fiscal 2026 outlook for organic sales growth to a range of 1%-3% [15][26] - Despite challenges in the macroeconomic environment, particularly in Western Europe, management sees opportunities for improvement [16][26] - The company anticipates a stronger Q4 compared to Q3, driven by innovation and consumer engagement strategies [38] Other Important Information - The company is on track for innovation to represent at least 25% of sales, with a goal to increase the percentage of innovations launched in less than a year [12] - Significant progress has been made in cash flow generation, with net cash flows from operating activities improving to $785 million [25] Q&A Session Questions and Answers Question: Insights on Americas performance and growth expectations - Management acknowledged the flat growth in the Americas but highlighted improvements in market share and volume, particularly in skincare and makeup [34][36] Question: State of the travel retail business - Management reported strong momentum in Hainan, with improved conversion rates and market share across multiple brands, despite disruptions in other travel retail areas [44][49] Question: Profitability in the makeup segment - Management noted that makeup profitability was impacted by innovation returns but expects improvements as new products are launched and distribution is optimized [60][62] Question: Promotional environment in China - Management emphasized the importance of maintaining strong performance during promotional periods while also focusing on everyday consumer engagement and experience [71][74]

The Estée Lauder Companies (NYSE:EL) Q2 2026 Earnings call February 05, 2026 08:30 AM ET Speaker6Good day, everyone, and welcome to the Estée Lauder Companies Fiscal 2026 second quarter conference call. Today's webcast is being recorded. For opening remarks and introductions, I would like to turn the call over to the Senior Vice President of Investor Relations, Miss Rainey Mancini.Speaker4Hello. On today's webcast are Stéphane de La Faverie, President and Chief Executive Officer, and Akhil Shrivastava, Exec ...

NEW YORK--(BUSINESS WIRE)--The Estée Lauder Companies Inc. (NYSE: EL) today reported its financial results for the second quarter ended December 31, 2025. "We delivered excellent second quarter results to solidify a strong first half of fiscal 2026,†said Stéphane de La Faverie, President and CEO. "In this pivotal year, Beauty Reimagined has invigorated our business as we execute the biggest operational, leadership, and cultural transformation in our history. On its one-year anniversary, we rai. ...

Core Insights - The company is experiencing a significant transformation, focusing on long-term growth and cultural change, with a strong emphasis on building a consumer-centric beauty brand [2][5] - Despite positive retail sales growth in mainland China at 13% and a slight increase in the Americas by 1%, the company's stock price fell nearly 20% due to lower-than-expected earnings forecasts [1][3] - The company has adjusted its full-year net sales forecast to a range of 1% to 3%, up from a previous outlook of flat to 3% [3] Geographical Performance - Mainland China reported a second consecutive quarter of double-digit retail sales growth at 13% [1] - The Americas saw a modest increase in retail sales of 1% [1] - In Europe, consumer sentiment remains subdued, particularly in France and Germany, while Spain and Italy showed strong performance [4] Strategic Initiatives - The company is implementing the "Beauty Reimagined" strategy and a Profit Recovery and Growth Plan to improve its market position [4][5] - The CEO highlighted the importance of diversifying distribution channels, including partnerships with Amazon and TikTok, and entering Sephora U.S. with the MAC brand [7][8] Market Challenges - The company anticipates tariff-related headwinds to impact profitability by approximately $100 million in fiscal 2026, primarily in the second half [2] - There has been a slowdown in consumer consumption in Latin America recently, attributed partly to tariffs [5] Department Store Dynamics - Department stores remain a crucial channel for luxury brands, accounting for around 30% of retail, although this varies by brand [6][8] - The company is actively supporting department stores like Saks during their transition, which owes Lauder $16 million [6][7]

Company Overview - Estee Lauder is a prominent player in the global beauty industry with a market capitalization of approximately $41.57 billion, known for its prestige beauty products [1][5] - The company has returned to organic sales growth, driven by its "Beauty Reimagined" initiative, which has improved profitability and margins [1][5] Stock Performance - Deutsche Bank analyst Steve Powers set a new price target for Estee Lauder at $128, indicating a potential increase of about 10.91% from the current stock price of $115.41 [2][5] - The stock price is currently $115.31, reflecting a slight increase of 0.60% or $0.69, with trading between $115.03 and $116.34 today [2] Competitive Landscape - Estee Lauder's growth contrasts with e.l.f. Beauty, which operates with a value-driven, digital-first model and has achieved its 27th consecutive quarter of net sales growth [3][5] - The cosmetics industry is evolving with digital engagement, changing consumer preferences, and a focus on value, innovation, and brand differentiation [4]

Core Insights - e.l.f. Beauty and Estée Lauder represent contrasting segments of the beauty market, with e.l.f. being a fast-growing mass-market player and Estée Lauder a large prestige company undergoing a cyclical recovery [1] Company Overview - e.l.f. Beauty focuses on affordable pricing, rapid product launches, and strong social media engagement, with brands like e.l.f. Cosmetics and Naturium [2] - Estée Lauder is a global leader in prestige beauty, offering a diversified portfolio across various categories, including skincare and makeup, supported by a broad distribution network [2] Market Position and Strategy - e.l.f. Beauty has a market capitalization of approximately $4.76 billion and is gaining market share through value-driven innovation [3] - Estée Lauder, with a market capitalization of $38.7 billion, is focused on stabilizing sales and rebuilding margins through its Beauty Reimagined strategy [3] Competitive Advantages - e.l.f. Beauty's competitive edge lies in its digitally native marketing approach, leveraging social media and influencer campaigns to drive product discovery while maintaining low advertising costs [5] - Estée Lauder benefits from a strong global prestige beauty portfolio, with flagship brands that support long-term demand despite industry volatility [11] Financial Performance - The Zacks Consensus Estimate for e.l.f. Beauty suggests a 19.2% year-over-year increase in sales for the current fiscal year, while earnings are expected to decrease by 15.9% [16] - For Estée Lauder, the consensus estimates imply a 4.5% increase in sales and a 42.4% increase in earnings for the current fiscal year [19] Stock Performance - Over the past year, e.l.f. Beauty shares have decreased by 39.1%, while Estée Lauder shares have increased by 43.3%, outperforming the industry's growth of 8.6% [21] Valuation - e.l.f. Beauty trades at a forward price-to-earnings multiple of 23.71, which is below its median level and the industry's multiple [22] - Estée Lauder has a higher forward P/E of 42.48, indicating a more expensive valuation compared to e.l.f. Beauty [22] Investment Outlook - e.l.f. Beauty's strong brand momentum and value-focused growth model are notable, but Estée Lauder's diversified business and recovery potential make it a more attractive choice at this stage [25]