Core Insights - Estée Lauder Companies reported a 3% organic sales growth in Q1 of fiscal year 2026, a significant recovery compared to a 13% decline in the previous quarter [1] - The company's net sales increased by 4% to $3.5 billion, with organic net sales also growing by 3% [1] - Gross margin improved by 100 basis points from 72.4% to 73.4%, driven by profit recovery and efficiency improvements [1] Financial Performance - Operating margin reached 4.9%, a notable improvement from -3.6% in the same period last year [1] - Adjusted operating margin increased by 300 basis points from 4.3% to 7.3%, attributed to profit recovery and growth initiatives [1] Market Performance - The Asia-Pacific region achieved a 9% organic net sales growth, driven by strong performance in the fragrance category and inventory optimization [2] - The mainland China market saw a 9% increase, with all categories gaining market share, particularly brands like La Mer, Le Labo, and Tom Ford [2] - Growth in mainland China was supported by innovative products and targeted marketing activities that enhanced online sales [2] Strategic Outlook - Fiscal year 2026 is positioned as a transformative year for the company, with an outlook of organic net sales growth expected to be flat to 3% [2] - Adjusted operating margin is projected to be between 9.4% and 9.9% for the full fiscal year [2] - The CEO emphasized the positive momentum from operational changes and the company's confidence in achieving its fiscal year 2026 outlook [2]