With a market cap of $38.5 billion. The Estée Lauder Companies Inc. (EL) is a global prestige beauty leader with a diversified portfolio spanning skincare, makeup, fragrance, and haircare. Founded in 1946 and headquarters in New York City, the company owns and manages a collection of iconic brands, including Estée Lauder, MAC, Clinique, La Mer, Bobbi Brown, and Jo Malone London, which are sold across department stores, specialty retailers, travel retail, and digital channels worldwide. Estée Lauder is se ...

Key Takeaways ELF is gaining share with affordable pricing, rapid innovation and a digitally native marketing model.EL is working to stabilize sales and rebuild margins through its Beauty Reimagined transformation plan.ELF reflects high-growth execution and EL diversified scale and recovery potential.e.l.f. Beauty, Inc. (ELF) and The Estee Lauder Companies Inc. (EL) are two influential players in global beauty, operating at different ends of the market while competing across several overlapping categories. ...

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 Viewpoint - Estée Lauder reported its largest loss in two decades, with a net sales decline of 8% to $14.326 billion and a net profit drop of 390%, resulting in a loss of $1.133 billion for the fiscal year 2025 [2][4]. Financial Performance - For fiscal year 2025, Estée Lauder's net sales were $14.326 billion, down 8% year-over-year, and net profit plummeted from $390 million to a loss of $1.133 billion [2]. - The stock price fell nearly 15% following the earnings report, closing at $91.23, down from $374.2 at the beginning of 2022 [2]. - The company anticipates a net sales growth of 2% to 5% and an adjusted earnings per share of $1.90 to $2.10 for fiscal year 2026, representing a year-over-year increase of 26% to 39% [9]. Product Category Performance - All major product categories, except for fragrance, experienced declines in net sales. Skin care and scalp care dropped by 12% and 10%, respectively, while color cosmetics fell by 6% [6]. - The fragrance category remained stable, with brands like Le Labo contributing to double-digit growth [11]. - The skin care segment, previously a strong performer, saw a 22% decline in operating profit, primarily due to underperformance from core brands Estée Lauder and La Mer [6]. Market Trends - Consumer preferences have shifted towards cost-effective and ingredient-safe products, impacting Estée Lauder's high-end positioning [7]. - The Chinese fragrance market is still in its infancy, with a penetration rate of only 5%, compared to over 40% in Western markets, indicating significant growth potential [11]. - The overall market for high-end cosmetics in China is projected to decline, with a compound annual growth rate of -3% from 2021 to 2024 [7]. Strategic Initiatives - The company is undergoing significant operational changes, including a global workforce reduction of approximately 7,000 positions, with over 3,200 already cut [9]. - Estée Lauder plans to enhance its product innovation, aiming for new products to account for over 25% of sales in fiscal year 2026 [8][12]. - The management remains optimistic about achieving organic sales growth in fiscal year 2026 despite current challenges [4].

Core Viewpoint - Estée Lauder reported its largest loss in two decades, with a net sales decline of 8% to $14.326 billion and a net profit drop of 390%, resulting in a loss of $1.133 billion for the fiscal year 2025 [1] Financial Performance - For fiscal year 2025, Estée Lauder's net sales were $14.326 billion, down 8% year-over-year, and net profit plummeted from a profit of $390 million to a loss of $1.133 billion [1] - The stock price fell nearly 15% following the earnings report, closing at $91.23, down from $374.2 at the beginning of 2022 [1] - The company anticipates a net sales growth of 2% to 5% and an adjusted earnings per share of $1.90 to $2.10 for fiscal year 2026, representing a year-over-year increase of 26% to 39% [9] Product Category Performance - Except for the fragrance category, which saw stable revenue, all other major categories experienced declines: skincare down 12%, scalp care down 10%, and makeup down 6% [7] - The skincare segment, previously a strong performer, faced significant declines, particularly from core brands Estée Lauder and La Mer [7] - The makeup category's decline was attributed to poor performance from M·A·C and a $159 million expense related to a talc lawsuit settlement [7] Market Trends and Consumer Behavior - Consumers are increasingly focused on product cost-effectiveness and ingredient efficacy, impacting Estée Lauder's premium positioning [8] - From 2021 to 2024, the compound annual growth rate for high-end beauty in China is projected to decline by 3%, with the market size shrinking from 257.8 billion yuan to 236.4 billion yuan [8] - The fragrance market in China is still in its infancy, with a penetration rate of only 5%, compared to 40% in Western markets, indicating significant growth potential [11] Strategic Changes and Future Outlook - Starting from Q1 of fiscal year 2026, Estée Lauder will report performance for mainland China as an independent region [5] - The company is undergoing significant restructuring, including a global layoff of approximately 7,000 positions, with over 3,200 already cut [9] - The CEO expressed confidence in achieving organic sales growth in fiscal year 2026 and aims to increase the proportion of innovative product sales to over 25% [9]

Core Viewpoint - Estée Lauder reported its largest loss in two decades for the fiscal year 2025, with net sales declining by 8% to $14.326 billion and a net profit drop of 390%, resulting in a loss of $1.133 billion [1][2] Group 1: Financial Performance - For fiscal year 2025, Estée Lauder's net sales were $14.326 billion, down 8% year-over-year, and net profit fell from $390 million to a loss of $1.133 billion [1] - The stock price dropped nearly 15% following the earnings report, with current shares at $87.72, down from $374.2 at the beginning of 2022 [1] - Morgan Stanley maintains a "neutral" bearish rating on Estée Lauder, predicting a potential decline of over 20% in the next 12 months [1] Group 2: Product Category Performance - All major product categories except for fragrance saw declines, with skincare and scalp care down 12% and 10% respectively, and makeup down 6% [2] - The fragrance category remained stable, with brands like Le Labo contributing to double-digit growth [5][6] - The skincare segment, previously a stronghold, faced significant declines attributed to underperformance of key brands like Estée Lauder and La Mer [2] Group 3: Market Trends and Consumer Behavior - Consumers are increasingly focused on cost-effectiveness and product efficacy, impacting Estée Lauder's high-end positioning [3] - The Chinese high-end beauty market is experiencing a compound annual growth rate decline of 3% from 2021 to 2024, with a market size reduction from 257.8 billion to 236.4 billion [3] - Emerging brands are capturing market share from traditional giants by offering innovative products and marketing strategies [3] Group 4: Strategic Changes and Future Outlook - Estée Lauder is undergoing significant operational changes, including a global workforce reduction of approximately 7,000 positions, with over 3,200 already cut [4] - The company projects a net sales growth of 2% to 5% for fiscal year 2026, with adjusted earnings per share expected to rise by 26% to 39% [4] - The company plans to enhance its product innovation, aiming for innovative products to account for over 25% of sales in fiscal year 2026 [3][4] Group 5: Fragrance Market Potential - The fragrance market in China is still in its infancy, with a penetration rate of only 5%, compared to over 40% in Western markets [5] - The fragrance segment is expected to grow at a compound annual growth rate of 21.78% from 2021 to 2026, outpacing most other beauty categories [5] - Despite current success, the fragrance business faces challenges from established luxury brands and shifting consumer preferences [7]

Core Viewpoint - Estée Lauder is facing significant challenges in its recovery path, with a decline in net sales and operating income amid economic downturns and geopolitical factors [1][3]. Financial Performance - For the fiscal year 2025, Estée Lauder reported a net sales decline of 8% year-over-year, totaling $14.33 billion (approximately ¥1028.01 billion) [1][2]. - The company's gross profit decreased by 5% to $10.60 billion, with a gross margin of 74.0% [2]. - Operating income turned into a loss of $785 million, marking a significant decline from a profit of $970 million in the previous year [2][6]. - The diluted net loss per share was $3.15, compared to earnings of $1.08 per share in the prior year [2]. Business Segment Performance - The only category to show growth was the fragrance segment, which remained flat with a slight increase, while skincare, makeup, and hair care categories experienced declines of 12%, 6%, and 10% respectively [4][6]. - The skincare segment's decline was attributed to decreased sales of brands like Estée Lauder and La Mer, alongside a drop in Asian travel retail sales [7][11]. - The makeup segment's downturn was primarily due to poor performance from brands like M·A·C and Too Faced [7][8]. Regional Performance - All regions reported declines in net sales, with the EMEA region experiencing the largest drop of 12%, followed by Asia/Pacific at 7% and the Americas at 4% [10][11]. - In mainland China, net sales fell by 6%, influenced by a challenging retail environment and low consumer sentiment [11][14]. Strategic Initiatives - Estée Lauder is undergoing a restructuring plan (PRGP) aimed at restoring profitability, which has already led to over 3,200 job cuts, with projections of total cuts reaching between 5,800 to 7,000 positions [19][22]. - The company anticipates that the restructuring will incur pre-tax costs between $1.6 billion to $3.3 billion [19]. Future Outlook - Despite current challenges, Estée Lauder's management expressed confidence in achieving organic sales growth in fiscal year 2026 and aims to rebuild operational profitability [3][22]. - The company plans to report its financials based on a new geographical structure starting Q1 of fiscal year 2026, which will include China as a separate reporting region [11][19].