US Market News
2月前
The Estée Lauder Companies Reports Fiscal 2026 Third Quarter ResultsMay 1, 2026 6:00 AM
Business Wire
Raises Full-Year Fiscal 2026 Outlook on Organic Net Sales and Adjusted Profitability, Reflecting Strong Year-to-Date Results:
– Double-Digit Net Sales Growth in Fragrance
– Net Sales Growth in Three of Four Geographic Regions, Led by Mainland China
– Beauty Reimagined Execution on Track, PRGP Ahead of Expectations
Shares Preliminary View on Fiscal 2027:
– Net Sales Growth of 3% to 5%; Adjusted Operating Margin of 12.5% to 13.0%
The Estée Lauder Companies Inc. (NYSE: EL) today reported its financial results for the third quarter ended March 31, 2026.
“Our third quarter results extend strong year-to-date performance, driven by Beauty Reimagined,” said Stéphane de La Faverie, President and CEO. “In the first nine months of fiscal 2026, organic sales for Fragrance rose double-digits, while three of four regions grew, led by high single-digit growth in Mainland China where we outperformed prestige beauty to gain share. With momentum across all five action plan priorities of Beauty Reimagined, today we raised our fiscal 2026 outlook, now expecting organic sales growth at the high-end of the prior range and adjusted operating margin expansion to approach 300 basis points, bolstered in part by adjusted gross margin expansion.”
de La Faverie emphasized, “Fiscal 2026 is promising to be the pivotal year we intended, one in which we restore organic sales growth and expand our adjusted operating margin for the first time in four years. Looking ahead to fiscal 2027, we are confident in our improving trajectory and realizing the benefits of One ELC, especially its One Operating Ecosystem which will be fully deployed. Our preliminary view is to accelerate organic sales growth and for adjusted operating margin to approach 13%, albeit in an uncertain geopolitical and macroeconomic environment.”
FISCAL 2026 THIRD QUARTER SELECT FINANCIAL RESULTS (unaudited)1,2,3
Three Months Ended
March 31
Percentage
Change
($ in millions, except per share data)
2026
2025
Net Sales
$
3,712
$
3,550
5
%
Organic Net Sales, Non-GAAP1,2
$
3,611
$
3,550
2
%
Other Financial Results:
Gross Profit
$
2,836
$
2,661
7
%
Gross Margin
76.4
%
75.0
%
Adjusted Gross Profit, Non-GAAP1,3
$
2,836
$
2,661
7
%
Adjusted Gross Margin, Non-GAAP1,3
76.4
%
75.0
%
Operating Income
$
249
$
306
(19
)%
Operating Margin
6.7
%
8.6
%
Adjusted Operating Income, Non-GAAP1,3
$
557
$
403
38
%
Adjusted Operating Margin, Non-GAAP1,3
15.0
%
11.4
%
Diluted Net Earnings Per Common Share
$
.24
$
.44
(45
)%
Adjusted Diluted Net Earnings Per Common Share, Non-GAAP1,3
$
.91
$
.65
40
%
1See pages 20 - 22 for reconciliation between GAAP and Adjusted Non-GAAP measures.
2Organic net sales represents net sales excluding returns associated with restructuring and other activities; non-comparable impacts of acquisitions, divestitures and brand closures; as well as the impact from foreign currency translation. The Company believes that the Non-GAAP measure of organic net sales growth provides year-over-year sales comparisons on a consistent basis.
3Adjusted Non-GAAP measures are calculated based on Net Sales adjusted only for Returns associated with restructuring and other activities.
As Reported Net sales increased 5% to $3.7 billion. Organic net sales increased 2%.
As Reported and Adjusted Gross margin expanded 140 basis points, to 76.4% from 75.0%, reflecting net benefits from the Company’s Profit Recovery and Growth Plan (“PRGP”), which helped to offset the unfavorable impacts from incremental tariffs and inflation. This also reflects a favorable comparison to the prior-year period—which included an in-period charge for under-absorbed manufacturing overhead costs—as well as improved sales leverage.
As Reported Operating margin contracted 190 basis points, to 6.7% from 8.6% in the prior-year period, reflecting the increase in restructuring and other charges of $127 million as well as the unfavorable impact of an $84 million loss contingency, net of the estimated probable insurance recoveries, related to a potential settlement of a securities class action recorded in the fiscal 2026 third quarter. Adjusted Operating margin expanded 360 basis points, to 15.0% from 11.4%, driven by gross margin expansion and operating leverage, including net benefits from the Company’s PRGP—which helped to reduce non-consumer-facing expenses, despite a more normalized level of employee incentive costs, and provided funding for increased consumer-facing investments4.
Effective tax rate was 50.3%, compared with 34.0% in the prior-year period. The increase was primarily driven by the estimated unfavorable impact of recently enacted U.S. tax legislation. Adjusted effective tax rate was 31.8%, compared with 30.8%.
As Reported Diluted net earnings per common share decreased to $.24, or 45%, compared with $.44 in the prior-year period. Adjusted diluted net earnings per common share increased to $.91, or 40%, compared with $.65. The disruptions to the Company’s business from the conflict in the Middle East had a dilutive impact to fiscal 2026 third quarter reported and adjusted diluted net earnings per common share of $.01 and $.02, respectively.
For the nine months ended March 31, 2026:
Net cash flows provided by operating activities increased to $1.2 billion, an improvement compared to $0.7 billion in the prior-year period, primarily reflecting higher net earnings, excluding non-cash items. The improvement also reflects the favorable change in operating assets and liabilities, despite the increase in restructuring payments.
Capital expenditures decreased to $306 million from $395 million in the prior-year period, reflecting the Company’s strategic focus on prioritizing consumer-facing investments to fuel growth while optimizing its overall investments.
Free Cash Flow5 was $891 million, compared with $276 million in the prior-year period, reflecting strong cash flows from operations as well as the timing of capital expenditures. The Company continues to focus on improving Free Cash Flow through operational efficiencies and the optimization of its investments.
The Company paid $300 million in deferred consideration associated with the fiscal 2023 acquisition of the TOM FORD brand—which includes a $150 million early payment made in the fiscal 2026 third quarter for an obligation originally due in July 2026—and $381 million in Dividends.
4Consumer-facing investments includes co-operative advertising, selling, advertising and promotional expenses, as well as store operating costs.
5Free Cash Flow is defined as net cash flows from operating activities less capital expenditures. See page 24 for the reconciliation between GAAP and Adjusted Non-GAAP measures.
BEAUTY GAINS AND OPERATIONAL HIGHLIGHTS6
Achieved prestige beauty share gains for the fiscal 2026 third quarter in some key markets:
Mainland China: the Company estimates it outperformed prestige beauty for the third consecutive quarter of fiscal 2026, driven by brands including La Mer, TOM FORD, Le Labo and The Ordinary
Japan: Share gains overall, owing to Makeup and led by M·A·C
Korea: Share gains in Makeup, driven by M·A·C and Clinique
U.S.7: Volume share gains, driven by every category. The Ordinary gained value share in Skin Care, while Clinique, M·A·C, Bobbi Brown Cosmetics, and Estée Lauder gained value share in Makeup and the Company delivered value share gains in Hair Care.
Western Europe: Share gains in Fragrance in France and Spain, in Skin Care in Germany, and in Hair Care in the U.K.
Launched breakthrough, on-trend and commercial innovations:
Estée Lauder released Revitalizing Supreme+ Sculpting Face Serum—a firming serum for the face and neck—in January 2026 and debuted its next-generation of Double Wear Stay-in-Place Longwear Matte Foundation in February 2026, featuring longer wear, more shades, and skin-care benefits and supported by the global “Made for More” commercial innovation
La Mer extended its Night Collection with The NEW Rejuvenating Night Eye Cream—powered by the brand’s proprietary ingredient complex to target multiple signs of visible eye aging—in March 2026
M·A·C reinforced its position in matte lip innovation with Powder Kiss Hazy Matte Lipstick and captured the multi-use makeup trend with Powder Kiss Lip + Cheek Mousse, both launched in January 2026
TOM FORD launched Figue Érotique Eau de Parfum, expanding its well-loved Audacious Fruits collection in January 2026; further fueled its momentum in cushion foundation in Asia with Architecture Radiance Hydrating Foundation launched in March 2026; and relaunched its iconic Runway Eye Color Quad with newly elevated modern luxury packaging in March 2026
KILIAN PARIS launched Her Majesty in January 2026, broadening the brand’s olfactory range with its first chypre scent
BALMAIN Beauty debuted Destin de Balmain Eau de Parfum, marking the brand’s entrance into prestige fragrance with a refillable, bold floral-fruity scent in March 2026
Jo Malone London launched a commercial innovation with the “Two Sisters, One Perfect Pear” campaign, spotlighting the English Pear & Freesia and English Pear & Sweat Pea scents, in March 2026
Expanded consumer coverage:
Continued expansion on:
Amazon from January 2026 through April 2026, with a total portfolio of 12 brands across 10 markets
TikTok Shop from January 2026 through April 2026, with a total portfolio of 12 brands across seven markets
Amplified specialty-multi distribution, with M·A·C’s launch in select U.S. Sephora locations as well as online and in Sephora at Kohl’s in March 2026
Announced in March 2026 that the Company has entered into an agreement, subject to regulatory approvals, to acquire the remaining interest in Forest Essentials, the Indian beauty brand grounded in the science of modern Luxurious Ayurveda
Broadened Fragrance distribution, including four net new freestanding stores opened globally in the fiscal 2026 third quarter, led by Le Labo and TOM FORD, and 27 net new freestanding stores opened globally for the nine months ended March 31, 2026, led by Le Labo and Jo Malone London
Reimagined the way the Company works, strategically leveraging leading external organizations to advance its organizational transformation and fully establishing its One ELC operating model:
Announced its strategic partnership with Shopify Inc. in October 2025 to modernize its digital technology infrastructure and deliver best-in-class omnichannel consumer experiences; the Company’s first store—a TOM FORD freestanding store—went live in the United Kingdom in January 2026, followed by two brand.com sites going live in the U.S. in March 2026
Entered into a global strategic agreement with Accenture in November 2025 for Enterprise Business Services in connection with the transformation of its global operating model
Announced the appointment of WPP as the Company’s first global media partner in April 2026, establishing a unified, enterprise-led approach to media buying designed to enable greater scale and precision
Continued to deliver the PRGP ahead of expectations, and for fiscal 2027: i) actions still planned to be substantially completed and ii) a vast majority of the full run-rate benefits still expected to be realized during the fiscal year. Including approvals through April 29, 2026, the Company increased the size of the restructuring program component of the PRGP, with approvals for specific initiatives, in total, still expected to be completed by the end of fiscal 2026. See the PROFIT RECOVERY AND GROWTH PLAN (“PRGP”) section for more information.
Other items:
In April 2026, the Company reached an agreement in principle to settle the consolidated securities class action litigation in the U.S. District Court for the Southern District of New York alleging violations of the Securities Exchange Act of 1934. The Company recorded an $84 million loss contingency, net of estimated insurance recoveries, in its fiscal 2026 third-quarter consolidated statements of earnings (loss).
Announced in April 2026 the Company’s minority investment in 111Skin, a luxury skin care brand, with proprietary formulas designed to support skin repair and resilience at the cellular level
6Since the Company’s last earnings announcement, including some previously disclosed.
7Source, excluding direct-to-consumer data: Circana, LLC, US Prestige Beauty Total Department/Specialty, Dollar Share Growth of Corporation, three-months ended March 31, 2026.
FISCAL 2026 THIRD QUARTER RESULTS BY PRODUCT CATEGORY AND BY REGION
Results by Product Category
(Unaudited)
Three Months Ended March 31
Net Sales
Percentage Change1
Operating
Income (Loss)
Percentage
Change
($ in millions)
2026
2025
Reported
Basis
Impact of
Foreign
Currency
Translation
Organic
Net Sales
(Non-GAAP)
2026
2025
Reported
Basis
Skin Care
$
1,856
$
1,807
3
%
(3
)%
—
%
$
444
$
361
23
%
Makeup
1,072
1,035
4
(3
)
—
(3
)
14
(100
+)
Fragrance
628
557
13
(3
)
10
21
32
(34
)
Hair Care
128
126
2
(2
)
—
(5
)
(13
)
62
Other
28
25
12
—
12
16
9
78
Subtotal
$
3,712
$
3,550
5
%
(3
)%
2
%
$
473
$
403
17
%
Returns/charges
associated with
restructuring and
other activities
—
—
(224
)
(97
)
Total
$
3,712
$
3,550
5
%
(3
)%
2
%
$
249
$
306
(19
)%
Non-GAAP Adjustments to As Reported Operating Income:
Returns/charges associated with restructuring and other activities
224
97
Skin Care - Securities class action litigation settlement
27
—
Makeup - Securities class action litigation settlement
35
—
Fragrance - Securities class action litigation settlement
13
—
Hair Care - Securities class action litigation settlement
9
—
Adjusted Operating Income - Non-GAAP
$
557
$
403
38
%
1Percentages are calculated on an individual basis.
The product category net sales commentary below reflects organic net sales, excluding the favorable impacts from foreign currency translation. In addition to the Operational Highlights above, below are the drivers of the Company’s performance.
Skin Care
Skin Care net sales were virtually flat, primarily driven by growth from La Mer and The Ordinary, partially offset by declines from Clinique and Origins
La Mer net sales increased high single digits, primarily due to hero products, such as The Treatment Lotion product franchise, as well as innovation, including The NEW Rejuvenating Night Eye Cream and The Broad Spectrum SPF 50 UV Protecting Fluid
Double-digit net sales growth from The Ordinary benefited from targeted expanded consumer reach and growth in existing distribution, including innovation such as Volufiline 92% + Pal-Isoleucine 1% Targeted Plumping Serum
Net sales from Clinique decreased high-single digits, primarily reflecting a decline in the serum subcategory, as the results in the prior-year period benefited from the launch of Moisture Surge Active Glow Serum
Origins net sales declined double digits, primarily due to softness in the moisturizer subcategory and from the Mega-Mushroom product franchise
Skin Care operating income increased, primarily due to higher reported net sales, partially offset by the increase in consumer-facing investments to support key activations, new product launches and targeted expanded consumer reach
Makeup
Makeup net sales were virtually flat, primarily driven by growth from Estée Lauder, partially offset by declines from Clinique and Too Faced
Net sales from Estée Lauder increased double digits, fueled by the February 2026 launch of its next-generation Double Wear Stay-in-Place Longwear Matte Foundation, supported by the global “Made for More” campaign
Net sales from Clinique decreased double digits, primarily due to the decline in the foundation subcategory, as the results in the prior-year period benefited from the launch of Even Better Clinical Vitamin Makeup
Too Faced net sales declined double digits, primarily reflecting continued retail softness for the brand and the impact of closures of certain specialty-multi retailer-operated shop-in-shop doors
Makeup operating results declined to a loss from income in the prior-year period, including the unfavorable allocation of $35 million associated with a potential settlement of a securities class action recorded in the fiscal 2026 third quarter. Excluding this impact, operating income increased, primarily driven by the increase in reported net sales as well as net benefits from the PRGP—which helped to reduce cost of sales—partially offset by the increase in consumer-facing investments to support key activations and new product launches.
Fragrance
Fragrance net sales increased 10%, driven by double-digit growth from the Company’s Luxury Brands—which grew across all geographic regions—led by Le Labo, KILIAN PARIS, BALMAIN Beauty and TOM FORD
Net sales growth from Le Labo was primarily driven by its Classic Collection, including innovation such as the fiscal 2026 launches of Violette 30 and perfuming hand creams, as well as targeted expanded consumer reach
KILIAN PARIS net sales increased, reflecting the success of existing products, such as the Angels’ Share and Love, don’t be shy product franchises, and benefiting from the launches of Angels’ Share on the Rocks and Her Majesty
The launch of BALMAIN Beauty’s prestige fragrance, Destin de Balmain Eau de Parfum, drove the brand’s net sales growth as well as The Americas’ overall double-digit growth in Fragrance
Net sales from TOM FORD increased, reflecting the continued success of the Private Blend and Signature product franchises, including Oud Wood and Ombré Leather, as well as targeted expanded consumer reach. Innovation, including the extension of Soleil Neige, Figue Érotique and the North America pre-launch of Taormina Orange, also contributed to growth and created a halo effect that benefited existing product sales
Fragrance operating income declined, including the unfavorable allocation of $13 million associated with a potential settlement of a securities class action recorded in the fiscal 2026 third quarter. Excluding this impact, operating income increased modestly, primarily due to the increase in gross profit as a result of the increase in sales, partially offset by increased consumer-facing investments to support key activations, distribution expansion and new product launches.
Hair Care
Hair Care net sales were flat, primarily due to growth from The Ordinary, reflecting the success of Multi-Peptide Serum for Hair Density and distribution expansion, offset by declines from Bumble and bumble and Le Labo
Hair Care operating results improved but remained in a loss position, including the unfavorable allocation of $9 million associated with a potential settlement of a securities class action recorded in the fiscal 2026 third quarter. Excluding this impact, operating results improved to income, primarily reflecting net benefits from the PRGP—which helped to reduce non-consumer-facing expenses—as well as disciplined expense management.
Results by Geographic Region
(Unaudited)
Three Months Ended March 31
Net Sales
Percentage Change1
Operating
Income
Percentage
Change
($ in millions)
2026
2025
Reported
Basis
Impact of
Foreign
Currency
Translation
Organic
Net Sales
(Non-GAAP)
2026
2025
Reported
Basis
The Americas
$
1,076
$
1,063
1
%
(1
)%
—
%
$
21
$
67
(69
)%
EUKEM
859
785
9
(7
)
3
32
28
14
Asia/Pacific
1,003
1,006
—
—
(1
)
261
232
13
Mainland China
774
696
11
(5
)
6
159
76
100
+
Subtotal
$
3,712
$
3,550
5
%
(3
)%
2
%
$
473
$
403
17
%
Returns/charges
associated with
restructuring and other
activities
—
—
(224
)
(97
)
Total
$
3,712
$
3,550
5
%
(3
)%
2
%
$
249
$
306
(19
)%
Non-GAAP Adjustments to As Reported Operating Income:
Returns/charges associated with restructuring and other activities
224
97
The Americas - Securities class action litigation settlement
84
—
Adjusted Operating Income - Non-GAAP
$
557
$
403
38
%
1Percentages are calculated on an individual basis.
The geographic region net sales commentary below reflects organic net sales, excluding the favorable impacts from foreign currency translation. In addition to the Operational Highlights above, below are the drivers of the Company’s performance.
Organic Net Sales - increased 2%, led by:
Mid-single-digit net sales growth in Mainland China, fueled by strong performance during key shopping moments, with increased consumer-facing investments supporting key activations and new product launches to drive sales growth
Double-digit net sales growth across the Company’s Priority Emerging Markets in its EUKEM and The Americas geographic regions, collectively—with growth across all product categories—benefiting from targeted expanded consumer reach, successful activations and innovation
Operating Results - increased, due to:
Mainland China - operating income increased, primarily driven by higher net sales and a favorable year-over-year impact associated with the timing of recognition of local government subsidies, partially offset by increased consumer-facing investments to support key activations, new product launches and targeted expanded consumer reach
Asia/Pacific - operating income increased, primarily driven by higher gross profit and lower non-consumer-facing expenses. Gross profit increased due to lower cost of sales, reflecting net benefits from the PRGP and the change in mix of business. Non-consumer-facing expenses also decreased, including net benefits from the PRGP and despite a more normalized level of employee incentive costs. These favorable impacts were partially offset by higher consumer-facing investments to support key activations and new product launches.
EUKEM - operating income increased, primarily due to higher gross profit driven by the increase in net sales, partially offset by (i) the increase in non-consumer-facing expenses, including a more normalized level of employee incentive costs and (ii) increased consumer-facing investments to drive sales growth as well as to support new product launches and targeted expanded consumer reach
The Americas - operating income decreased, including the unfavorable impact of an $84 million loss contingency associated with a potential settlement of a securities class action recorded in the fiscal 2026 third quarter. Excluding this impact, operating income increased, reflecting net benefits from the PRGP—which helped to reduce non-consumer-facing expenses, despite a more normalized level of employee incentive costs—as well as higher reported net sales.
QUARTERLY DIVIDEND
Today, the Company announced a quarterly dividend of $.35 per share on its Class A and Class B Common Stock, payable in cash on June 15, 2026 to stockholders of record at the close of business on May 29, 2026.
PROFIT RECOVERY AND GROWTH PLAN (“PRGP”)
Actions under the Company’s PRGP are still expected to be substantially completed in fiscal 2027, with a vast majority of the full run-rate benefits still expected to be realized during fiscal 2027. Approvals for specific initiatives under the restructuring program component of the PRGP, in total, are still expected to be completed by the end of fiscal 2026. The overall plan is designed to further transform the Company’s operating model to fund a return to sales growth in fiscal 2026 and restore a solid double-digit adjusted operating margin over the next few years as well as continue to mitigate impacts from external volatility.
Restructuring Program Component of the PRGP
Relating specifically to the restructuring program component of the PRGP, through March 31, 2026, the Company has recognized total cumulative charges under the restructuring component of the PRGP of $1.1 billion, consisting primarily of employee-related costs. For the three and nine months ended March 31, 2026, the Company recognized charges of $0.2 billion and $0.5 billion, respectively.
Reflecting the approved initiatives through April 29, 2026, and the identification of incremental opportunities, the Company has revised its expectations for restructuring and other charges, gross benefits and the net reduction in positions.
Once all initiatives are approved and fully implemented, the restructuring program component of the PRGP is now expected to result in restructuring and other charges totaling between $1.5 billion and $1.7 billion, before taxes, an increase from $1.2 billion and $1.6 billion. This consists of employee-related costs, asset-related costs, contract terminations and other costs associated with implementing these initiatives. The restructuring program is now expected to yield annual gross benefits of between $1.0 billion and $1.2 billion, before taxes— an increase from $0.8 billion and $1.0 billion—to help restore operating margin, offset inflation and fuel increased reinvestments in consumer-facing areas to drive sustainable sales growth.
The Company now estimates a final net reduction in positions of 9,000 to 10,000, an increase from 5,800 to 7,000. Over 70% of the increase is attributable to the reduction in point-of-sale demonstration roles at select unproductive doors in its department store and freestanding store channels, as the Company continues to evolve its focus towards high-growth channels. This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas. Approvals for specific initiatives under this restructuring program, in total, are still expected to be completed by the end of fiscal 2026. The restructuring program’s focus includes the (i) reorganization and rightsizing of certain areas, (ii) simplification and acceleration of processes, (iii) outsourcing of select services and (iv) evolution of go-to-market footprint and selling models, all to help rebuild operating margin and also fuel reinvestment in consumer-facing areas to drive sustainable sales growth.
OUTLOOK FOR FISCAL 2026 FULL YEAR
The Company is raising its fiscal 2026 full-year outlook while remaining cautious amid ongoing geopolitical and macroeconomic uncertainty, including business disruptions in the Middle East and continued headwinds in key markets, particularly in the West.
Reflecting the Company’s strong performance through the nine-months-ended March 31, 2026, its fiscal 2026 full-year outlook now assumes:
Organic net sales growth of approximately 3%, at the high-end of its prior range
Adjusted operating margin to range between 10.7% to 11.0%
Adjusted diluted net earnings per common share to range between $2.35 and $2.45
The Company continues to closely monitor evolving trade policies and enacted tariffs, actively evaluating developments and mitigation strategies to reduce the potential impacts of tariffs. The Company has implemented a range of actions, including leveraging available trade programs and further optimizing its regional manufacturing footprint to bring production closer to the consumer—including through its facility in Japan. These efforts, combined with increased supply chain agility, are helping to offset more than half of the expected impacts and better position the Company to adapt quickly as trade policies continue to evolve.
Based on information available and net of planned mitigation actions through April 24, 2026, the Company continues to expect tariff-related headwinds to impact fiscal 2026 profitability by approximately $100 million. The Company capitalizes product costs, including tariffs, in inventory and defers their recognition in cost of sales until the related inventory is sold—currently a deferral period of approximately six months. Accordingly, tariff rate reductions in the second half of fiscal 2026 are not expected to benefit fiscal 2026. This assumption does not reflect any subsequent or future changes, including potential refunds. The Company continues to evaluate additional strategies, including further PRGP initiatives.
Reconciliation between GAAP and Non-GAAP - Net Sales Growth
(Unaudited)
Current - May 1, 2026
Prior - February 5, 2026
Twelve Months Ending
Twelve Months Ending
June 30, 2026(1)
June 30, 2026(2)
As Reported - GAAP
4
%
3% - 5
%
Impact of foreign currency translation
1
2
Returns associated with restructuring and other activities(3)
—
—
Organic, Non-GAAP
3
%
1% - 3
%
(1)Represents forecast, using spot rates as of March 31, 2026.
(2)Represents forecast, using spot rates as of December 31, 2025.
(3)The net sales growth impact of returns associated with restructuring and other activities includes approvals to date (as of each forecast date). Additional returns associated with restructuring and other activities are anticipated as initiatives are approved in fiscal 2026.
Reconciliation between GAAP and Non-GAAP - Diluted Net Earnings (Loss) Per Common Share (“EPS”)
(Unaudited)
Current - May 1, 2026
Prior - February 5, 2026
Twelve Months Ending
Twelve Months Ending
June 30
June 30
2026(1)
2025
Growth
2026(2)
2025
Growth
Forecasted/As Reported EPS - GAAP
$.69 - $.83
$
(3.15
)
100
+%
$.98 - $1.22
$
(3.15
)
100
+%
Non-GAAP
Restructuring and other charges(3)
1.44 - 1.48
1.06
1.03 - 1.07
1.06
Securities class action litigation settlement
.18
—
—
—
Goodwill and other intangible asset impairments
—
2.78
—
2.78
U.S. deferred tax asset valuation allowance adjustment
—
.48
—
.48
Talcum litigation settlement agreements(4)
—
.34
—
.34
Forecasted/Adjusted EPS - Non-GAAP
$2.35 - $2.45
$
1.51
56% - 62
%
$2.05 - $2.25
$
1.51
36% - 49
%
Impact of foreign currency translation
(.02
)
(.02
)
Forecasted/Adjusted Constant Currency EPS - Non-GAAP
$2.33 - $2.43
$
1.51
54% - 61
%
$2.03 - $2.23
$
1.51
35% - 48
%
(1)Represents forecast, using spot rates as of March 31, 2026.
(2)Represents forecast, using spot rates as of December 31, 2025.
(3)The diluted net earnings per common share impact of restructuring and other charges includes approvals to date (as of each forecast date). Additional restructuring and other charges are anticipated as initiatives are approved in fiscal 2026.
(4)No assumptions included in the fiscal 2026 forecast.
Business disruptions in the Middle East, including domestic markets and travel retail locations in the region, are assumed to have a greater impact on the Company’s fiscal 2026 fourth quarter results relative to the third quarter, which benefited from shipments for key shopping moments made prior to the onset of the conflict. For the fiscal 2026 fourth quarter the Company expects an unfavorable impact of approximately 2% to its sales growth and a dilutive impact to diluted net earnings per common share of $.06.
The Company’s fiscal 2026 full-year outlook assumes the following:
Organic net sales growth at the high-end of the previously communicated range of 1% to 3%
Adjusted gross margin of approximately 75.0%
Adjusted operating margin of 10.7% to 11.0%
An adjusted effective tax rate of approximately 36% for the full year, reflecting the Company’s estimated geographical mix of earnings
A dilutive impact of $.07 to fiscal 2026 full-year diluted net earnings per common share related to potential business disruptions in the Middle East
Diluted weighted-average shares outstanding of approximately 365 million shares
Net cash flows provided by operating activities to range between $1.4 billion and $1.5 billion, an increase from fiscal 2025, primarily reflecting higher earnings, excluding non-cash items, and the Company’s continued focus on managing working capital, partially offset by higher restructuring payments that are expected to peak in fiscal 2026
Capital expenditures to be approximately 4% of projected sales, reflecting a more efficient and normalized level of expenditures, along with the Company’s focus on optimizing its investments overall as it prioritizes consumer-facing investments to fuel growth
No deterioration in the geopolitical landscape or related impacts, including tariffs and consumer sentiment as well as business disruptions in the Middle East beyond May 2026
PRELIMINARY VIEW FOR FISCAL 2027 FULL YEAR
The Company is encouraged by strong progress across Beauty Reimagined and its PRGP, as its execution continues to transform its operating model, enabling better cost leverage and driving efficiencies across the organization. Together with the revised expectations for fiscal 2026, this progress is reflected in the Company’s preliminary view on full-year fiscal 2027. While the Company is currently in the process of finalizing its plan, its preliminary view on fiscal 2027 assumes the following:
Global prestige beauty growth to accelerate
As Reported and Organic net sales growth to range between 3% to 5%, with share gains for the Company at the mid- to high-end; no impact from foreign currency translation8
Adjusted operating margin of 12.5% to 13.0%, excluding potential tariff refunds
No business disruptions from the conflict in the Middle East
No deterioration in the geopolitical landscape or related impacts, including tariffs and consumer sentiment
The Company plans to provide additional details on its full-year fiscal 2027 view in August 2026, when it reports its fiscal 2026 results, including any revisions to the above-noted assumptions based on changes in the geopolitical and macroeconomic environment, as well as movements in foreign currency exchange rates.
8Using spot rates of: 1.171 for the EUR, 1.351 for the GBP, 6.828 for the CNY and 1,479 for the KRW
The Company continues to monitor the effects of the global macro environment, including the risk of recession; currency volatility; inflationary pressures; supply chain challenges; social and political issues; competitive pressures; legal and regulatory matters, including the imposition of tariffs and sanctions; geopolitical tensions; and global security issues. The Company is also mindful of inflationary pressures (including those caused by tariffs) on its cost base and is monitoring the impact on consumer preferences, the impact of changes being made in the organization, including those related to Beauty Reimagined and the PRGP—as well as the transition to the Company’s One ELC operating model—along with the potential impact of changes expected to be made as part of the PRGP on suppliers, retailers and others, and challenges relating to successfully outsourcing select services.
CONFERENCE CALL AND WEBCAST DETAILS
The Estée Lauder Companies will host a conference call at 8:30 a.m. (ET) today, May 1, 2026 to discuss its results for the fiscal 2026 third quarter. The dial-in number for the call is 877-883-0383 in the U.S. or 412-902-6506 internationally (conference ID number: 2037646).
The call will also be webcast live at http://www.elcompanies.com/investors/events-and-presentations.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this press release, in particular those in “Outlook” and “Preliminary View,” as well as remarks by the CEO and other members of management, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may address the Company’s expectations regarding sales, earnings or other future financial performance and liquidity, other performance measures, product introductions, entry into new geographic regions, information technology initiatives, new methods of sale, the Company’s long-term strategy, restructuring and other charges and resulting cost savings, and future operations or operating results. These statements may contain words like “expect,” “will,” “will likely result,” “would,” “believe,” “estimate,” “planned,” “plans,” “intends,” “may,” “should,” “could,” “anticipate,” “estimate,” “project,” “projected,” “forecast,” and “forecasted” or similar expressions. Although the Company believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, actual results may differ materially from the Company’s expectations. Factors that could cause actual results to differ from expectations include, without limitation:
(1)
increased competitive activity from companies in the skin care, makeup, fragrance and hair care businesses;
(2)
the Company’s ability to develop, produce and market new products on which future operating results may depend and to successfully address challenges in the Company’s business;
(3)
consolidations, restructurings, bankruptcies and reorganizations in the retail industry causing a decrease in the number of stores that sell the Company’s products, an increase in the ownership concentration within the retail industry, ownership of retailers by the Company’s competitors or ownership of competitors by the Company’s customers that are retailers and the Company’s inability to collect receivables;
(4)
destocking and tighter working capital management by retailers;
(5)
the success, or changes in timing or scope, of new product launches and the success, or changes in timing or scope, of advertising, sampling and merchandising programs;
(6)
shifts in the preferences of consumers as to how they perceive value and where and how they shop;
(7)
social, political and economic risks to the Company’s foreign or domestic manufacturing, distribution and retail operations, including changes in foreign investment and trade policies and regulations of the host countries and of the United States;
(8)
changes in the laws, regulations and policies (including the interpretations and enforcement thereof) that affect, or will affect, the Company’s business, including those relating to its products or distribution networks, changes in accounting standards, tax laws and regulations, environmental or climate change laws, regulations or accords, trade rules and customs regulations, and the outcome and expense of legal or regulatory proceedings, and any action the Company may take as a result;
(9)
foreign currency fluctuations affecting the Company’s results of operations and the value of its foreign assets, the relative prices at which the Company and its foreign competitors sell products in the same markets and the Company’s operating and manufacturing costs outside of the United States;
(10)
changes in global or local conditions, including those due to volatility in the global credit and equity markets, government economic policies, natural or man-made disasters, real or perceived epidemics, supply chain challenges, inflation, or increased energy costs, that could affect consumer purchasing, the willingness or ability of consumers to travel and/or purchase the Company’s products while traveling, the financial strength of the Company’s customers, suppliers or other contract counterparties, the Company’s operations, the cost and availability of capital which the Company may need for new equipment, facilities or acquisitions, the returns that the Company is able to generate on its pension assets and the resulting impact on funding obligations, the cost and availability of raw materials and the assumptions underlying the Company’s critical accounting estimates;
(11)
shipment delays, commodity pricing, depletion of inventory and increased production costs resulting from disruptions of operations at any of the facilities that manufacture the Company’s products or at the Company’s distribution or inventory centers, including disruptions that may be caused by the implementation of information technology initiatives, or by restructurings;
(12)
real estate rates and availability, which may affect the Company’s ability to increase or maintain the number of retail locations at which the Company sells its products and the costs associated with the Company’s other facilities;
(13)
changes in product mix to products which are less profitable;
(14)
the Company’s ability to acquire, develop or implement new information technology, including operational technology and websites, on a timely basis and within the Company’s cost estimates; to maintain continuous operations of its new and existing information technology; and to secure the data and other information that may be stored in such technologies or other systems or media;
(15)
the Company’s ability to capitalize on opportunities for improved efficiency, such as publicly-announced strategies and restructuring and cost-savings initiatives, and to integrate acquired businesses and realize value therefrom;
(16)
consequences attributable to local or international conflicts around the world, as well as from any terrorist action, retaliation and the threat of further action or retaliation;
(17)
the timing and impact of acquisitions, investments and divestitures; and
(18)
additional factors as described in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
The Company assumes no responsibility to update forward-looking statements made herein or otherwise.
The Estée Lauder Companies Inc. is one of the world’s leading manufacturers, marketers and sellers of quality skin care, makeup, fragrance and hair care products, and is a steward of luxury and prestige brands globally. The Company’s products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced, Dr.Jart+, the DECIEM family of brands, including The Ordinary and NIOD, and BALMAIN Beauty.
ELC-F
ELC-E
CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
(Unaudited)
Three Months Ended
March 31
Percentage
Change
Nine Months Ended
March 31
Percentage
Change
($ in millions, except per share data)
2026
2025
2026
2025
Net sales(A)
$
3,712
$
3,550
5
%
$
11,422
$
10,915
5
%
Cost of sales(A)
876
889
(1
)
2,797
2,774
1
Gross profit
2,836
2,661
7
8,625
8,141
6
Gross margin
76.4
%
75.0
%
75.5
%
74.6
%
Operating expenses
Selling, general and administrative
2,279
2,258
1
7,202
7,141
1
Restructuring and other charges(A)
224
97
100
+
520
375
39
Securities class action litigation settlement(B)
84
—
100
84
—
100
Impairment of goodwill and other intangible assets(C)
—
—
—
—
861
(100
)
Talcum litigation settlement agreements(D)
—
—
—
—
159
(100
)
Total operating expenses
2,587
2,355
10
7,806
8,536
(9
)
Operating expense margin
69.7
%
66.3
%
68.3
%
78.2
%
Operating income (loss)
249
306
(19
)
819
(395
)
100
+
Operating income (loss) margin
6.7
%
8.6
%
7.2
%
(3.6
)%
Interest expense
82
87
(6
)
253
269
(6
)
Interest income and investment income, net
15
27
(44
)
66
85
(22
)
Other components of net periodic benefit cost
3
5
(40
)
11
10
10
Earnings (loss) before income taxes
179
241
(26
)
621
(589
)
100
+
Provision (benefit) for income taxes
90
82
10
323
(2
)
100
+
Net earnings (loss)
$
89
$
159
(44
)%
$
298
$
(587
)
100
+%
Net earnings (loss) per common share
Basic
$
.25
$
.44
(44
)%
$
.82
$
(1.63
)
100
+%
Diluted
$
.24
$
.44
(45
)%
$
.82
$
(1.63
)
100
+%
Weighted-average common shares outstanding
Basic
362.7
360.3
362.0
359.9
Diluted
365.4
361.4
364.5
359.9
(A) Included in net sales, cost of sales and restructuring and other charges are the impacts of returns and charges associated with the restructuring program component of the PRGP and the Post-COVID Business Acceleration Program (the “PCBA Program”). Additional information about the restructuring program component of the PRGP and the PCBA Program is included in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
(B) On December 7, 2023 and January 22, 2024, purported securities class action complaints were filed in the United States District Court for the Southern District of New York against the Company and its then Chief Executive Officer and Chief Financial Officer. The actions were consolidated on February 20, 2024. On March 22, 2024, plaintiffs filed a consolidated amended complaint alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on alleged materially false and misleading statements between February 3, 2022 and October 31, 2023. On March 31, 2025, the Court denied defendants’ motion to dismiss. On April 2, 2026, the parties reached an agreement in principle to settle the securities class action litigation. In light of these discussions, the Company recorded a loss contingency of $84 million, net of the estimated probable insurance recoveries, in the consolidated statements of earnings (loss) relating to a potential settlement of the securities class action.
(C) During the fiscal 2025 second quarter, the TOM FORD brand experienced lower-than-expected growth within key geographic regions and channels, including in mainland China, Asia travel retail and Hong Kong SAR. Also during the fiscal 2025 second quarter, the Too Faced reporting unit experienced lower-than-expected results in key geographic regions and channels. As a result, the Company made revisions to the internal forecasts relating to its TOM FORD brand and Too Faced reporting unit. Additionally, there were increases in the weighted average cost of capital for the TOM FORD brand and Too Faced reporting unit as compared to the prior-year annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2024. The Company concluded that the changes in circumstances in the TOM FORD brand and Too Faced reporting unit, along with increases in the weighted average cost of capital, triggered the need for interim impairment reviews of the TOM FORD trademark and the Too Faced trademark and goodwill. These changes in circumstances were also an indicator that the carrying amounts of Too Faced’s long-lived assets, including customer lists, may not be recoverable. After performing the relevant impairment assessments, the Company recorded $773 million and $75 million of trademark intangible asset impairment charges for TOM FORD and Too Faced, respectively, as well as a $13 million goodwill impairment charge related to Too Faced.
For the nine months ended March 31, 2025, charges related to goodwill and other intangible asset impairments were $861 million ($674 million, net of tax), with an impact of $1.87 per common share.
(D) From the end of August 2024 through October 2024, the Company entered into agreements with certain plaintiff law firms to resolve over 200 pending cosmetic talcum powder matters and establish a framework for resolving potential future claims from January 1, 2025 through December 31, 2029, subject to annual caps (the “talcum litigation settlement agreements”). In connection with these agreements, the Company recorded a charge of $159 million in the fiscal 2025 first quarter, representing its best estimate of probable losses for current and potential future claims.
Results by Product Category
(Unaudited)
Nine Months Ended March 31
Net Sales
Percentage Change1
Operating
Income (Loss)
Percentage
Change
($ in millions)
2026
2025
Reported
Basis
Impact of
Foreign
Currency
Translation
Organic
Net Sales
(Non-GAAP)
2026
2025
Reported
Basis
Skin Care
$
5,485
$
5,257
4
%
(2
)%
3
%
$
1,085
$
784
38
%
Makeup
3,266
3,223
1
(2
)
(1
)
—
(382
)
100
Fragrance
2,161
1,931
12
(2
)
10
212
(354
)
100
+
Hair Care
425
424
—
(1
)
—
1
(34
)
100
+
Other
84
80
5
—
5
38
(25
)
100
+
Subtotal
$
11,421
$
10,915
5
%
(2
)%
3
%
$
1,336
$
(11
)
100
+%
Returns/charges
associated with
restructuring and
other activities
1
—
(517
)
(384
)
Total
$
11,422
$
10,915
5
%
(2
)%
3
%
$
819
$
(395
)
100
+%
Non-GAAP Adjustments to As Reported Operating Income (Loss):
Returns/charges associated with restructuring and other activities
517
384
Skin Care - Securities class action litigation settlement
27
—
Makeup - Securities class action litigation settlement
35
—
Fragrance - Securities class action litigation settlement
13
—
Hair Care - Securities class action litigation settlement
9
—
Makeup - Goodwill and other intangible asset impairments
—
258
Fragrance - Other intangible asset impairments
—
549
Other - Other intangible asset impairments
—
54
Makeup - Talcum litigation settlement agreements
—
159
Adjusted Operating Income - Non-GAAP
$
1,420
$
1,009
41
%
1Percentages are calculated on an individual basis.
Results by Geographic Region
(Unaudited)
Nine Months Ended March 31
Net Sales
Percentage Change1
Operating
Income (Loss)
Percentage
Change
($ in millions)
2026
2025
Reported
Basis
Impact of
Foreign
Currency
Translation
Organic
Net Sales
(Non-GAAP)
2026
2025
Reported
Basis
The Americas
$
3,468
$
3,469
—
%
—
%
—
%
$
212
$
(789
)
100
+%
EUKEM
2,943
2,738
7
(6
)
2
194
183
6
Asia/Pacific
2,776
2,700
3
—
3
611
460
33
Mainland China
2,234
2,008
11
(2
)
9
319
135
100
+
Subtotal
$
11,421
$
10,915
5
%
(2
)%
3
%
$
1,336
$
(11
)
100
+%
Returns/charges
associated with
restructuring and
other activities
1
—
(517
)
(384
)
Total
$
11,422
$
10,915
5
%
(2
)%
3
%
$
819
$
(395
)
100
+%
Non-GAAP Adjustments to As Reported Operating Income (Loss):
Returns/charges associated with restructuring and other activities
517
384
The Americas - Securities class action litigation settlement
84
—
The Americas - Goodwill and other intangible asset impairments
—
861
The Americas - Talcum litigation settlement agreements
—
159
Adjusted Operating Income - Non-GAAP
$
1,420
$
1,009
41
%
1Percentages are calculated on an individual basis.
This earnings release includes some non-GAAP financial measures relating to charges associated with restructuring and other activities and adjustments as well as organic net sales. Included herein are reconciliations between the non-GAAP financial measures and the most directly comparable GAAP measures for certain consolidated statements of earnings (loss) accounts before and after these items. The Company uses certain non-GAAP financial measures, among other financial measures, to evaluate its operating performance, which represent the manner in which the Company conducts and views its business. Management believes that excluding certain items that are not comparable from period-to-period, or do not reflect the Company’s underlying ongoing business, provides transparency for such items and helps investors and others compare and analyze operating performance from period-to-period. In the future, the Company expects to incur charges or adjustments similar in nature to those presented herein; however, the impact to the Company’s results in a given period may be highly variable and difficult to predict. The Company’s non-GAAP financial measures may not be comparable to similarly titled measures used by, or determined in a manner consistent with, other companies. While the Company considers the non-GAAP measures useful in analyzing its results, they are not intended to replace, or act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP.
The Company operates on a global basis, with the majority of its net sales generated outside the United States. Accordingly, fluctuations in foreign currency exchange rates can affect the Company’s results of operations. Therefore, the Company presents certain net sales information excluding the effect of foreign currency rate fluctuations to provide a framework for assessing the performance of its underlying business outside the United States. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. The Company calculates constant currency information by translating current-period results using prior-year period monthly average foreign currency exchange rates and adjusting for the period-over-period impact of foreign currency cash flow hedging activities.
Reconciliation between GAAP and Non-GAAP Net Sales
(Unaudited)
Three Months Ended
March 31
Percentage
Change
Nine Months Ended
March 31
Percentage
Change
($ in millions)
2026
2025
2026
2025
Net Sales
$
3,712
$
3,550
5
%
$
11,422
$
10,915
5
%
Non-GAAP Adjustments
Returns associated with restructuring and other activities
—
—
(1
)
—
Adjusted Net Sales, Non-GAAP
3,712
3,550
11,421
10,915
Impact of foreign currency translation
(101
)
—
(200
)
—
Organic Net Sales, Non-GAAP
$
3,611
$
3,550
2
%
$
11,221
$
10,915
3
%
Reconciliation of Certain Consolidated Statements of Earnings (Loss) Accounts
Before and After Returns, Charges and Other Adjustments
(Unaudited)1
Three Months Ended
March 31
Percentage
Change
Nine Months Ended
March 31
Percentage
Change
($ in millions, except per share data)
2026
2025
2026
2025
Gross Profit
$
2,836
$
2,661
7
%
$
8,625
$
8,141
6
%
Non-GAAP Adjustments
Restructuring and other activities
—
—
(3
)
9
Adjusted Gross Profit, Non-GAAP
2,836
2,661
7
%
8,622
8,150
6
%
Impact of foreign currency translation
(75
)
—
(144
)
—
Adjusted Gross Profit, Non-GAAP constant currency
$
2,761
$
2,661
4
%
$
8,478
$
8,150
4
%
Gross Margin
76.4
%
75.0
%
75.5
%
74.6
%
Non-GAAP Adjustments
Restructuring and other activities
—
—
—
0.1
Adjusted Gross Margin, Non-GAAP
76.4
%
75.0
%
75.5
%
74.7
%
Operating Income (Loss)
$
249
$
306
(19
)%
$
819
$
(395
)
100
+%
Non-GAAP Adjustments
Restructuring and other charges
224
97
517
384
Securities class action litigation settlement
84
—
84
—
Goodwill and other intangible asset impairments
—
—
—
861
Talcum litigation settlement agreements
—
—
—
159
Adjusted Operating Income, Non-GAAP
557
403
38
%
1,420
1,009
41
%
Impact of foreign currency translation
(14
)
—
(22
)
—
Adjusted Operating Income, Non-GAAP constant currency
$
543
$
403
35
%
$
1,398
$
1,009
39
%
Operating Margin
6.7
%
8.6
%
7.2
%
(3.6
)%
Non-GAAP Adjustments
Restructuring and other charges
6.0
2.8
4.4
3.4
Securities class action litigation settlement
2.3
—
0.7
—
Goodwill and other intangible asset impairments
—
—
—
7.9
Talcum litigation settlement agreements
—
—
—
1.5
Adjusted Operating Margin, Non-GAAP
15.0
%
11.4
%
12.4
%
9.2
%
Provision (benefit) for Income Taxes
$
90
$
82
10
%
$
323
$
(2
)
100
+%
Effective Tax Rate ("ETR")
50.3
%
34.0
%
52.0
%
0.3
%
Tax Impact on Non-GAAP adjustments
Restructuring and other charges
47
22
108
84
Securities class action litigation settlement
18
—
18
—
Goodwill and other intangible asset impairments
—
—
—
187
Talcum litigation settlement agreements
—
—
—
35
Adjusted Provision for Income Taxes, Non-GAAP
$
155
$
104
$
449
$
304
Adjusted ETR, Non-GAAP
31.8
%
30.8
%
36.7
%
37.3
%
Diluted Net Earnings (Loss) Per Common Share
$
.24
$
.44
(45
)%
$
.82
$
(1.63
)
100
+%
Non-GAAP Adjustments
Restructuring and other charges
.49
.21
1.12
.83
Securities class action litigation settlement
.18
—
.18
—
Goodwill and other intangible asset impairments
—
—
—
1.88
Talcum litigation settlement agreements
—
—
—
.34
Adjusted Diluted Net Earnings Per Common Share, Non-GAAP2
$
.91
$
.65
40
%
$
2.12
$
1.42
50
%
Impact of foreign currency translation
(.03
)
—
(.04
)
—
Adjusted Diluted Net Earnings Per Common Share, Non-GAAP constant currency2
$
.88
$
.65
37
%
$
2.08
$
1.42
47
%
1Percentages are calculated on an individual basis.
2For the nine months ended March 31, 2025 the effects of potentially dilutive stock options, performance share units, and restricted stock units of approximately 1.2 million shares were excluded from the computation of As Reported and adjustments to Non-GAAP diluted loss per common share as they were anti-dilutive due to the net loss incurred during the period. These shares were added to the weighted-average common shares outstanding to calculate Non-GAAP diluted earnings per common share.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, except where noted)
March 31, 2026
June 30,
2025
March 31, 2025
($ in millions)
(Audited)
ASSETS
Cash and cash equivalents
$
3,126
$
2,921
$
2,631
Accounts receivable, net
1,746
1,530
1,792
Inventory and promotional merchandise
1,917
2,074
1,959
Prepaid expenses and other current assets
707
544
635
Total current assets
7,496
7,069
7,017
Property, plant and equipment, net
2,845
3,172
3,059
Operating lease right-of-use assets
1,786
1,952
1,875
Other assets
7,537
7,699
7,935
Total assets
$
19,664
$
19,892
$
19,886
LIABILITIES AND EQUITY
Current debt
$
502
$
3
$
3
Accounts payable
1,324
1,497
1,214
Operating lease liabilities
401
406
399
Other accrued liabilities
3,684
3,529
3,348
Total current liabilities
5,911
5,435
4,964
Long-term debt
6,810
7,314
7,298
Long-term operating lease liabilities
1,587
1,744
1,682
Other noncurrent liabilities
1,363
1,534
1,597
Total noncurrent liabilities
9,760
10,592
10,577
Total equity
3,993
3,865
4,345
Total liabilities and equity
$
19,664
$
19,892
$
19,886
SELECT CASH FLOW DATA
(Unaudited)
Nine Months Ended
March 31
($ in millions)
2026
2025
Net earnings (loss)
$
298
$
(587
)
Adjustments to reconcile net earnings (loss) to net cash flows from operating activities:
Depreciation and amortization
598
619
Deferred income taxes
(22
)
(334
)
Impairment of goodwill and other intangible assets
—
861
Other items
313
277
Changes in operating assets and liabilities:
Increase in accounts receivable, net
(228
)
(77
)
Decrease in inventory and promotional merchandise
135
215
Increase in other assets, net
(104
)
(33
)
Increase (decrease) in accounts payable and other liabilities, net
207
(270
)
Net cash flows provided by operating activities
$
1,197
$
671
Other Investing and Financing Uses:
Capital expenditures
$
(306
)
$
(395
)
Repayments of long-term debt, net
(3
)
(503
)
Dividends paid to stockholders
(381
)
(492
)
Payment of deferred consideration
(300
)
—
Supplemental cash flow information:
Cash paid for interest
$
229
$
243
Cash paid for income taxes
431
468
Reconciliation of Certain Consolidated Statements of Cash Flows Accounts
Cash Flows from Operating Activities to Free Cash Flow
(Unaudited)
Nine Months Ended
March 31
($ in millions)
2026
2025
Net cash flows provided by operating activities
$
1,197
$
671
Less: capital expenditures
(306
)
(395
)
Free cash flow
$
891
$
276
View source version on businesswire.com: https://www.businesswire.com/news/home/20260501773674/en/
Investors: Rainey Mancini
rmancini@estee.com
Media: Brendan Riley
briley@estee.com
Original: The Estée Lauder Companies Reports Fiscal 2026 Third Quarter Results
US Market News
5月前
The Estée Lauder Companies Reports Fiscal 2026 Second Quarter ResultsFebruary 5, 2026 6:00 AM
Business Wire
Delivered Strong Fiscal 2026 Second Quarter and First Half Results across Sales, Margins and EPS
Raising Fiscal 2026 Full-Year Outlook
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 raise our fiscal 2026 outlook confident in the strength of our turnaround, even as our second half reflects previously-expected headwinds and now-greater consumer-facing investments, as we expect to restore organic sales growth and expand our operating margin for the first time in four years.”
FISCAL 2026 SECOND QUARTER SELECT FINANCIAL RESULTS (unaudited)1,2,3
Three Months Ended
December 31
Percentage
Change
($ in millions, except per share data)
2025
2024
Net Sales
$
4,229
$
4,004
6
%
Organic Net Sales, Non-GAAP1,2
$
4,155
$
4,004
4
%
Other Financial Results:
Gross Profit
$
3,235
$
3,047
6
%
Gross Margin
76.5
%
76.1
%
Adjusted Gross Profit, Non-GAAP1,3
$
3,235
$
3,047
6
%
Adjusted Gross Margin, Non-GAAP1,3
76.5
%
76.1
%
Operating Income (Loss)
$
401
$
(580
)
100
+%
Operating Margin
9.5
%
(14.5
)%
Adjusted Operating Income, Non-GAAP1,3
$
608
$
462
32
%
Adjusted Operating Margin, Non-GAAP1,3
14.4
%
11.5
%
Diluted Net Earnings (Loss) Per Common Share
$
.44
$
(1.64
)
100
+%
Adjusted Diluted Net Earnings Per Common Share, Non-GAAP1,3
$
.89
$
.62
43
%
1See pages 18 and 19 for reconciliation between GAAP and Adjusted Non-GAAP measures.
2Organic net sales represents net sales excluding returns associated with restructuring and other activities; non-comparable impacts of acquisitions, divestitures and brand closures; as well as the impact from foreign currency translation. The Company believes that the Non-GAAP measure of organic net sales growth provides year-over-year sales comparisons on a consistent basis.
3Adjusted Non-GAAP measures are calculated based on Net Sales adjusted only for Returns associated with restructuring and other activities.
As Reported Net sales increased 6% to $4.2 billion. Organic net sales increased 4%.
As Reported and Adjusted Gross margin expanded 40 basis points, to 76.5% from 76.1%, reflecting net benefits from the Company’s Profit Recovery and Growth Plan (“PRGP”), largely offset by the impact of incremental tariffs, changes in the Company’s mix of business and inflation. The PRGP benefits were driven by operational efficiencies, including a more competitive approach to procurement and expense optimization, as well as lower excess and obsolescence.
As Reported Operating margin was 9.5%, an improvement from (14.5)% in the prior-year period, which was unfavorably impacted by $861 million of goodwill and other intangible asset impairments. Adjusted Operating margin expanded 290 basis points, to 14.4% from 11.5%, reflecting net benefits from the Company’s PRGP. These net benefits helped to reduce non-consumer-facing expenses, despite the normalization of employee incentive costs, and provided funding for increased consumer-facing investments4.
Effective tax rate was 51.4%, compared with 9.2% in the prior-year period. The increase was primarily driven by the fiscal 2025 second quarter pre-tax loss and the discrete tax impact of goodwill and other intangible asset impairments. It also reflects the estimated unfavorable impact of recently enacted U.S. tax legislation and a higher effective tax rate on foreign operations due to the establishment of new valuation allowances on certain foreign deferred tax assets. The favorable year-over-year impact associated with previously issued stock-based compensation partially offset these increases. Adjusted effective tax rate was 39.8%, compared with 42.6%.
Diluted net earnings (loss) per common share increased to net earnings of $.44, compared with a net loss of $(1.64) in the prior-year period. Adjusted diluted net earnings per common share increased to $.89, or 43%, compared with $.62.
For the six months ended December 31, 2025:
Net cash flows provided by operating activities increased to $785 million, an improvement compared to $387 million in the prior-year period, primarily reflecting higher earnings, excluding non-cash items.
Capital expenditures decreased to $204 million from $273 million in the prior-year period, reflecting the Company’s strategic focus on prioritizing consumer-facing investments to fuel growth while optimizing its overall investments.
Free Cash Flow5 was $581 million, compared with $114 million in the prior-year period, reflecting strong cash flows from operations as well as the timing of capital expenditures. The Company continues to focus on improving Free Cash Flow through operational efficiencies and the optimization of its investments.
The Company paid $150 million in deferred consideration associated with the fiscal 2023 acquisition of the TOM FORD brand and $255 million in Dividends.
4Consumer-facing investments includes co-operative advertising, selling, advertising and promotional expenses, as well as store operating costs.
5Free Cash Flow is defined as net cash flows from operating activities less capital expenditures. See page 21 for the reconciliation between GAAP and Adjusted Non-GAAP measures.
BEAUTY GAINS AND OPERATIONAL HIGHLIGHTS6
Achieved prestige beauty share gains for the fiscal 2026 second quarter in some key markets:
Mainland China: Second consecutive quarter of double-digit retail sales growth and continued share gains, driven by every category, led by La Mer, TOM FORD, and Le Labo. For calendar year 2025, the Company gained share in every category and across brick-and-mortar and online.
Japan: Share gains overall driven by Makeup, led by M·A·C and Bobbi Brown Cosmetics, and Fragrance, led by Le Labo, KILIAN PARIS, and Editions de Parfums Frédéric Malle. For calendar year 2025, the Company gained share in Fragrance to further solidify its #1 rank in the category.
U.S.7: Volume share gains in total prestige beauty, as the Company also gained value share in Skin Care and Hair Care. For calendar year 2025, the Company gained volume share in total prestige beauty, while Clinique and The Ordinary drove the Company’s value share gains in Skin Care, ranking #1 and #2 brands in the category, respectively, and Estée Lauder and Le Labo gained value share in Makeup and Fragrance, respectively. In direct-to-consumer, Fragrance rose mid-single-digits.
Western Europe: Share gains in Fragrance in each of France, Spain and the U.K.
6Since the Company’s last earnings announcement, including some previously disclosed.
7Source, excluding direct-to-consumer data: Circana, LLC, US Prestige Beauty Total Department/Specialty, Dollar Share Growth of Corporation, three-months ended December 31, 2025.
Launched breakthrough, on-trend and commercial innovations:
Limited edition holiday products, collections, and campaigns across brands, including, but not limited to: “Gift M·A·C”, La Mer’s “A Sparkling Season”, Jo Malone London’s “Fun & Games”, and The Ordinary’s “Slowvember”
Estée Lauder further extended its longevity portfolio, powered by patented visible age-reversal technology, with Re-Nutriv Ultimate Lift Rejuvenating Oil, developed in the Company’s China Innovation Labs, and launched in Mainland China in December 2025
La Mer debuted The New Lip Treatment, innovated to improve lip texture and replenish lips’ moisture barrier, offered in a variety of bare and buildable shades, launched in November 2025
The Ordinary expanded its offerings targeting visible signs of aging, at accessible pricing, with Volufiline 92% + Pal-Isoleucine 1% Targeted Plumping Serum in November 2025
TOM FORD introduced a solid-to-liquid lip formula in November 2025, and launched its winter Soleil Neige collection in December 2025, which included Soleil Neige Eau de Parfum, and a corresponding makeup collection of eyeshadow, illuminator, lip color, and blush
Ranked highly during the 11.11 Global Shopping Festival: Estée Lauder #1 in Prestige Beauty on Tmall and store livestreams on Douyin; La Mer #1 in Luxury on Tmall; Jo Malone London #1 in Prestige Fragrance on Tmall
Expanded consumer coverage:
Continued expansion on:
Amazon from October 2025 through January 2026, bringing the total portfolio to 12 brands across 10 markets
TikTok Shop from October 2025 through January 2026, bringing the total portfolio to 12 brands across seven markets
Amplified specialty-multi distribution, announcing in October 2025 M·A·C’s planned March 2026 launch in select U.S. Sephora locations as well as online and in Sephora at Kohl’s
Broadened Fragrance distribution, including nine net new freestanding stores opened globally in the fiscal 2026 second quarter, led by Jo Malone London and Le Labo
Reimagined the way the Company works, strategically leveraging leading external organizations to advance its organizational transformation:
Announced its strategic partnership with Shopify Inc. in October 2025 to modernize its digital technology infrastructure and deliver best-in-class omnichannel consumer experiences, with the Company’s first store—a TOM FORD freestanding store—going live in the United Kingdom in January 2026
Entered into a global strategic agreement with Accenture in November 2025 for Enterprise Business Services (“EBS”) in connection with the transformation of its global operating model. See the Profit Recovery and Growth Plan (“PRGP”) section on page 8 for further details.
Other highlights:
Announced in November 2025 its first investment in a Latin American brand with a minority interest in the Mexican luxury fragrance brand XINÚ, reinforcing the Company’s focus on fostering local entrepreneurship and innovation
Launched in December 2025 the Jo Malone London AI Scent Advisor, an AI-powered digital experience using Google’s Gemini and Google Cloud’s Vertex AI to provide personalized fragrance recommendations through conversational, natural-language interactions
Announced in February 2026 a pioneering collaboration in the U.S. between Clinique and ACUVUE, a globally trusted contact lens brand, uniting two global leaders around a mission to advance eye education in beauty and vision by highlighting to consumers that they can wear contacts and eye makeup confidently
FISCAL 2026 SECOND QUARTER RESULTS BY PRODUCT CATEGORY AND BY REGION
Results by Product Category
(Unaudited)
Three Months Ended December 31
Net Sales
Percentage Change1
Operating
Income (Loss)
Percentage
Change
($ in millions)
2025
2024
Reported
Basis
Impact of
Foreign
Currency
Translation
Organic
Net Sales
(Non-GAAP)
2025
2024
Reported
Basis
Skin Care
$
2,054
$
1,921
7
%
(1
)%
6
%
$
454
$
306
48
%
Makeup
1,164
1,150
1
(2
)
(1
)
18
(211
)
100
+
Fragrance
812
744
9
(3
)
6
105
(446
)
100
+
Hair Care
168
159
6
(1
)
5
18
(3
)
100
+
Other
31
30
3
—
3
13
(45
)
100
+
Subtotal
$
4,229
$
4,004
6
%
(2
)%
4
%
$
608
$
(399
)
100
+%
Returns/charges
associated with
restructuring and
other activities
—
—
(207
)
(181
)
Total
$
4,229
$
4,004
6
%
(2
)%
4
%
$
401
$
(580
)
100
+%
Non-GAAP Adjustments to As Reported Operating Income (Loss):
Returns/charges associated with restructuring and other activities
207
181
Makeup - Goodwill and other intangible asset impairments
—
258
Fragrance - Other intangible asset impairments
—
549
Other - Other intangible asset impairments
—
54
Adjusted Operating Income - Non-GAAP
$
608
$
462
32
%
1Percentages are calculated on an individual basis.
The product category net sales commentary below reflects organic net sales, excluding the favorable impacts from foreign currency translation. In addition to the Operational Highlights above, below are the drivers of the Company’s performance.
Skin Care
Skin Care net sales increased 6%, primarily driven by growth from La Mer, Estée Lauder and The Ordinary.
Net sales growth from La Mer was fueled by strong performance during key shopping moments and holiday—supported by increased consumer-facing investments—reflecting growth from The Treatment Lotion and Crème de la Mer product franchises as well as The Renewal Oil.
Net sales from Estée Lauder increased, similarly benefiting from performance during key shopping moments and holiday, as well as innovation across the Revitalizing Supreme+, Re-Nutriv and Advanced Night Repair product franchises.
Net sales from The Ordinary increased, benefitting from targeted expanded consumer reach and existing distribution growth, as well as successful consumer activations, including those supporting the launch of Volufiline 92% + Pal-Isoleucine 1% Targeted Plumping Serum
Skin Care operating income increased, primarily due to the increase in net sales as well as net benefits from the PRGP— which helped to reduce non-consumer-facing expenses—partially offset by increased consumer-facing investments to support key activations and new product launches.
Makeup
Makeup net sales decreased 1%, primarily driven by Estée Lauder, partially offset by M·A·C.
Net sales from Estée Lauder declined, primarily due to an accrual for estimated returns of the existing Double Wear Stay-in-Place Long Wear Matte Foundation ahead of the launch of its next-generation of Double Wear matte innovation, which launched in February 2026.
M·A·C net sales increased, primarily driven by initial shipments for the March 2026 launch in select U.S. Sephora locations as well as online and in Sephora at Kohl’s. The growth also reflects continued success from the lip subcategory, fueled by its hero product Lip Pencil as well as Lipglass Air.
Makeup operating results improved to income from a loss in the prior-year period, which included $258 million of goodwill and other intangible asset impairments relating to TOM FORD and Too Faced.
Fragrance
Fragrance net sales increased 6%, driven by high-single-digit growth from the Company’s Luxury Brands—which grew across all geographic regions—led by TOM FORD, Le Labo and KILIAN PARIS.
Net sales from TOM FORD increased, fueled by innovation—including Oud Voyager, Figue Érotique and Soleil Neige—which created a halo effect that benefited existing Private Blend and Signature product sales. Net sales also benefited from targeted expanded consumer reach.
Net sales growth from Le Labo was primarily driven by its Classic Collection, including growth from the juice subcategory, as well as body with the launch of perfuming hand creams. Targeted expanded consumer reach also contributed to growth.
KILIAN PARIS net sales increased, primarily reflecting the success of existing products—such as the Angels’ Share Collection product franchise— as well as the launch of Angels’ Share on the Rocks and targeted expanded consumer reach.
Fragrance operating results improved to income from a loss in the prior-year period, which included a $549 million other intangible asset impairment charge relating to TOM FORD. These results also reflect the increase in net sales, partially offset by increased consumer-facing investments to support key activations, distribution expansion and new product launches.
Hair Care
Hair Care net sales returned to growth, increasing 5%, primarily driven by distribution expansion and the success of Multi-Peptide Serum for Hair Density from The Ordinary, as well as initial shipments for Bumble and bumble’s SalonCentric launch in February 2026.
Hair Care operating results improved to income from a loss in the prior-year period, primarily driven by the increase in net sales as well as net benefits from the PRGP, which helped to reduce non-consumer-facing expenses.
Results by Geographic Region
(Unaudited)
Three Months Ended December 31
Net Sales
Percentage Change1
Operating
Income (Loss)2
Percentage
Change
($ in millions)
2025
2024
Reported
Basis
Impact of
Foreign
Currency
Translation
Organic
Net Sales
(Non-GAAP)
2025
2024
Reported
Basis
The Americas
$
1,218
$
1,209
1
%
—
%
—
%
$
104
$
(771
)
100
+%
EUKEM
1,183
1,085
9
(7
)
2
156
145
8
Asia/Pacific
900
888
1
1
2
200
152
32
Mainland China
928
822
13
—
13
148
75
97
Subtotal
$
4,229
$
4,004
6
%
(2
)%
4
%
$
608
$
(399
)
100
+%
Returns/charges
associated with
restructuring and other
activities
—
—
(207
)
(181
)
Total
$
4,229
$
4,004
6
%
(2
)%
4
%
$
401
$
(580
)
100
+%
Non-GAAP Adjustments to As Reported Operating Income (Loss):
Returns/charges associated with restructuring and other activities
207
181
The Americas - Goodwill and other intangible asset impairments
—
861
Adjusted Operating Income - Non-GAAP
$
608
$
462
32
%
1Percentages are calculated on an individual basis.
2As previously disclosed, operating results by geographic region for the fiscal 2025 second quarter (quarter-to-date period) have been adjusted to reflect the correction of a regional misclassification in the amounts furnished in the Form 8-K on October 2, 2025 related to a one-time charge during the fiscal 2025 first quarter. The misclassification was offset in the fiscal 2025 first quarter furnished amounts. No other periods were impacted and there is no impact on the consolidated financial results or results by product category.
The geographic region net sales commentary below reflects organic net sales, excluding the (favorable)/unfavorable impacts from foreign currency translation. In addition to the Operational Highlights above, below are the drivers of the Company’s performance.
Organic Net Sales - increased 4%, led by:
Double-digit net sales growth in Mainland China, primarily reflecting strong performance during the 11.11 Global Shopping Festival and holiday, as well as innovation, with activations supported by increased consumer-facing investments. These results drove growth online and, to a lesser extent, in brick-and-mortar.
Double-digit net sales growth across the Company’s Priority Emerging Markets in its EUKEM and The Americas geographic regions, collectively—with growth across all product categories—benefiting from targeted expanded consumer reach, successful activations and innovation.
Operating Results - increased to income compared to a loss in the prior-year period, driven by:
The Americas - operating results increased to income from a loss in the prior-year period, which included $861 million of goodwill and other intangible asset impairments relating to TOM FORD and Too Faced.
Mainland China - operating income increased, primarily driven by higher net sales and a favorable comparison to the prior-year period—which was unfavorably impacted by a change in policy relating to local government subsidies—partially offset by increased consumer-facing investments to support go-to-market campaigns, innovation and targeted expanded consumer reach.
Asia/Pacific - operating income increased, primarily due to net benefits from the PRGP, which helped to reduce non-consumer-facing expenses.
EUKEM - operating income increased due to foreign currency translation. On an as reported basis, this reflects higher gross profit due to the increase in net sales, offset in part by increased consumer-facing investments to drive sales growth as well as to support innovation and targeted expanded consumer reach.
QUARTERLY DIVIDEND
Today, the Company announced a quarterly dividend of $.35 per share on its Class A and Class B Common Stock, payable in cash on March 16, 2026 to stockholders of record at the close of business on February 27, 2026.
PROFIT RECOVERY AND GROWTH PLAN (“PRGP”)
In November 2025, the Company approved initiatives under the restructuring program component of the PRGP and entered into an agreement with Accenture for Enterprise Business Services (“EBS”) in connection with the transformation of its global operating model. See below for additional details.
Actions under the Company’s PRGP are still expected to be substantially completed in fiscal 2027, with a majority of the full run-rate benefits still expected to be realized during fiscal 2027. The plan is designed to further transform the Company’s operating model to fund a return to sales growth in fiscal 2026 and restore a solid double-digit adjusted operating margin over the next few years, as well as continue to mitigate impacts from external volatility.
Restructuring Program Component of the PRGP
The Company entered into a strategic agreement for EBS in connection with the transformation of its global operating model through the (i) consolidation of certain service providers, (ii) expansion of outsourced services, and (iii) redesign and standardization of the related end-to-end business processes, leveraging advanced technology to improve productivity. These actions will primarily result in other charges, including professional services related to the design, implementation and execution of the initiative. These charges include transition and transformation support, process design, and costs to support the global project management office for this initiative. These actions will also result in employee severance through a net reduction in workforce and contract termination charges. The Company expects these initiatives to yield net benefits, ramping up over time, as the transition progresses, normalized service levels are achieved and operational scale and efficiencies are realized. The Company remains on track to achieve the overall PRGP savings.
Relating specifically to the restructuring program component of the PRGP, once fully implemented, the Company still expects to take restructuring and other charges of between $1.2 billion and $1.6 billion, before taxes, consisting of employee-related costs, asset-related costs, contract terminations and other costs associated with implementing these initiatives. The restructuring program is still expected to yield annual gross benefits of between $0.8 billion and $1.0 billion, before taxes, to help restore operating margin and also fuel reinvestment in consumer-facing areas to drive sustainable sales growth.
The Company still estimates a net reduction in positions of 5,800 to 7,000, including approvals to date. This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas. Approvals for specific initiatives under this restructuring program, in total, are expected to be completed by the end of fiscal 2026. The restructuring program’s focus includes the (i) reorganization and rightsizing of certain areas, (ii) simplification and acceleration of processes, (iii) outsourcing of select services and (iv) evolution of go-to-market footprint and selling models.
Through December 31, 2025, the Company has recognized total cumulative charges under the restructuring component of the PRGP of $904 million, consisting primarily of employee-related costs. For the three and six months ended December 31, 2025, the Company recognized charges of $207 million and $294 million, respectively.
Through January 30, 2026, the Company has approved initiatives totaling cumulative charges of $1.2 billion and a net reduction of over 6,000 positions. Inclusive of approvals through January 30, 2026, and relative to the high end of the total expected ranges, the Company has approved initiatives that account for over 80% of the expected gross benefits, over 75% of the expected charges and over 80% of the expected net reduction in positions.
OUTLOOK FOR FISCAL 2026 FULL YEAR
The Company is raising its fiscal 2026 full-year outlook, reflecting solid performance in the fiscal 2026 first half while remaining cautious amid ongoing macroeconomic uncertainty and continued headwinds in key areas of its business. Accordingly, the Company is tightening the range on net sales and raising its outlook for adjusted diluted net earnings per common share and adjusted operating margin.
The Company continues to closely monitor evolving trade policies and enacted tariffs, actively evaluating developments and mitigation strategies to reduce the potential impacts of tariffs. The Company has implemented a range of actions, including leveraging available trade programs and further optimizing its regional manufacturing footprint to bring production closer to the consumer—including through its facility in Japan. These efforts, combined with increased supply chain agility, are helping to offset more than half of the expected impacts and better position the Company to adapt quickly as trade policies continue to evolve.
In terms of enacted tariffs, the Company’s assumption continues to reflect the following incremental rates on its most material flow of goods:
For U.S. imports: (i) from Switzerland a 39% rate, (ii) from Canada a 35% rate, (iii) from China a 30% rate, (iv) from Mexico a 25% rate, (v) from both the European Union and Japan a 15% rate and (vi) from the U.K. a 10% rate
For Canada imports from the U.S., a 25% rate
For China imports from the U.S., a 10% rate
Based on information available and net of planned mitigation actions through January 29, 2026, the Company continues to expect tariff-related headwinds to impact fiscal 2026 profitability by approximately $100 million, mostly in the second half. This assumption does not reflect any subsequent or future changes. The Company continues to evaluate additional strategies, including further PRGP initiatives and potential pricing actions.
Reconciliation between GAAP and Non-GAAP - Net Sales Growth
(Unaudited)
Twelve Months Ending
June 30, 2026(1)
As Reported - GAAP
3% - 5
%
Impact of foreign currency translation
2
Returns associated with restructuring and other activities(2)
—
Organic, Non-GAAP
1% - 3
%
(1)Represents forecast, using spot rates as of December 31, 2025.
(2)The net sales growth impact of returns associated with restructuring and other activities includes approvals to date. Additional returns associated with restructuring and other activities are anticipated as initiatives are approved in fiscal 2026.
Reconciliation between GAAP and Non-GAAP - Diluted Net Earnings (Loss) Per Common Share (“EPS”)
(Unaudited)
Twelve Months Ending
June 30
2026(1)
2025
Growth
Forecasted/As Reported EPS - GAAP
$.98 - $1.22
$
(3.15
)
100
+%
Non-GAAP
Restructuring and other charges(2)
1.03 - 1.07
1.06
Goodwill and other intangible asset impairments
—
2.78
U.S. deferred tax asset valuation allowance adjustment
—
.48
Talcum litigation settlement agreements(3)
—
.34
Forecasted/Adjusted EPS - Non-GAAP
$2.05 - $2.25
$
1.51
36% - 49
%
Impact of foreign currency translation
(.02
)
Forecasted/Adjusted Constant Currency EPS - Non-GAAP
$2.03 - $2.23
$
1.51
35% - 48
%
(1)Represents forecast, using spot rates as of December 31, 2025.
(2)The diluted net earnings per common share impact of restructuring and other charges includes approvals to date. Additional restructuring and other charges are anticipated as initiatives are approved in fiscal 2026.
(3)No assumptions included in the fiscal 2026 forecast.
The Company’s fiscal 2026 full-year outlook reflects the following:
Organic net sales growth to range between 1% and 3%:
For the full year, at mid-point of the outlook range, growth across nearly all geographic regions—led by mid-single-digit growth in Mainland China, while The Americas is expected to be flat.
For the fiscal 2026 second half, an increase of low-single-digits—with higher growth expected in the fourth quarter relative to the third quarter, reflecting an incremental transitory headwind from the change of duty-free retailers servicing the Beijing and Shanghai airports, including the related online businesses. The Company also anticipates continued retail sales momentum in Hainan, while negative trends are expected to persist in the rest of Northern Asian travel retail.
As of January 29, 2026, an unfavorable impact of approximately $100 million on profitability, mostly in the second half, from currently enacted incremental tariffs, net of the Company’s planned mitigation strategies
Adjusted operating margin of 9.8% to 10.2%, reflecting expansion in the fiscal 2026 second half:
The Company expects contraction in the third quarter of approximately 50 basis points, owing to (i) the timing of consumer-facing investments to support second-half innovation, with a higher year-over-year increase expected in the third quarter and (ii) tariff headwinds.
An adjusted effective tax rate of approximately 36% for the full year, reflecting the Company’s estimated geographical mix of earnings
Diluted weighted-average shares outstanding of approximately 365 million shares
Net cash flows provided by operating activities to be between $1.1 billion and $1.2 billion, a decline from fiscal 2025 and reflecting higher restructuring payments that are expected to peak in fiscal 2026, partially offset by the Company’s continued focus on managing working capital
Capital expenditures to be approximately 4% of projected sales, reflecting a more efficient and normalized level of expenditures, along with the Company’s focus on optimizing its investments overall as it prioritizes consumer-facing investments to fuel growth
No deterioration in the geopolitical landscape or related impacts, including tariffs and consumer sentiment
The Company continues to monitor the effects of the global macro environment, including the risk of recession; currency volatility; inflationary pressures; supply chain challenges; social and political issues; competitive pressures; legal and regulatory matters, including the imposition of tariffs and sanctions; geopolitical tensions; and global security issues. The Company is also mindful of inflationary pressures (including those caused by tariffs) on its cost base and is monitoring the impact on consumer preferences, the impact of changes being made in the organization, including those related to Beauty Reimagined and the PRGP, as well as the potential impact of changes expected to be made as part of the PRGP on suppliers, retailers and others, and challenges relating to successfully outsourcing select services.
CONFERENCE CALL AND WEBCAST DETAILS
The Estée Lauder Companies will host a conference call at 8:30 a.m. (ET) today, February 5, 2026 to discuss its results for the fiscal 2026 second quarter. The dial-in number for the call is 877-883-0383 in the U.S. or 412-902-6506 internationally (conference ID number: 1156365).
The call will also be webcast live at http://www.elcompanies.com/investors/events-and-presentations and will be available for replay until February 19, 2026.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this press release, in particular those in “Outlook,” as well as remarks by the CEO and other members of management, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may address the Company’s expectations regarding sales, earnings or other future financial performance and liquidity, other performance measures, product introductions, entry into new geographic regions, information technology initiatives, new methods of sale, the Company’s long-term strategy, restructuring and other charges and resulting cost savings, and future operations or operating results. These statements may contain words like “expect,” “will,” “will likely result,” “would,” “believe,” “estimate,” “planned,” “plans,” “intends,” “may,” “should,” “could,” “anticipate,” “estimate,” “project,” “projected,” “forecast,” and “forecasted” or similar expressions. Although the Company believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, actual results may differ materially from the Company’s expectations. Factors that could cause actual results to differ from expectations include, without limitation:
(1)
increased competitive activity from companies in the skin care, makeup, fragrance and hair care businesses;
(2)
the Company’s ability to develop, produce and market new products on which future operating results may depend and to successfully address challenges in the Company’s business;
(3)
consolidations, restructurings, bankruptcies and reorganizations in the retail industry causing a decrease in the number of stores that sell the Company’s products, an increase in the ownership concentration within the retail industry, ownership of retailers by the Company’s competitors or ownership of competitors by the Company’s customers that are retailers and the Company’s inability to collect receivables;
(4)
destocking and tighter working capital management by retailers;
(5)
the success, or changes in timing or scope, of new product launches and the success, or changes in timing or scope, of advertising, sampling and merchandising programs;
(6)
shifts in the preferences of consumers as to how they perceive value and where and how they shop;
(7)
social, political and economic risks to the Company’s foreign or domestic manufacturing, distribution and retail operations, including changes in foreign investment and trade policies and regulations of the host countries and of the United States;
(8)
changes in the laws, regulations and policies (including the interpretations and enforcement thereof) that affect, or will affect, the Company’s business, including those relating to its products or distribution networks, changes in accounting standards, tax laws and regulations, environmental or climate change laws, regulations or accords, trade rules and customs regulations, and the outcome and expense of legal or regulatory proceedings, and any action the Company may take as a result;
(9)
foreign currency fluctuations affecting the Company’s results of operations and the value of its foreign assets, the relative prices at which the Company and its foreign competitors sell products in the same markets and the Company’s operating and manufacturing costs outside of the United States;
(10)
changes in global or local conditions, including those due to volatility in the global credit and equity markets, government economic policies, natural or man-made disasters, real or perceived epidemics, supply chain challenges, inflation, or increased energy costs, that could affect consumer purchasing, the willingness or ability of consumers to travel and/or purchase the Company’s products while traveling, the financial strength of the Company’s customers, suppliers or other contract counterparties, the Company’s operations, the cost and availability of capital which the Company may need for new equipment, facilities or acquisitions, the returns that the Company is able to generate on its pension assets and the resulting impact on funding obligations, the cost and availability of raw materials and the assumptions underlying the Company’s critical accounting estimates;
(11)
shipment delays, commodity pricing, depletion of inventory and increased production costs resulting from disruptions of operations at any of the facilities that manufacture the Company’s products or at the Company’s distribution or inventory centers, including disruptions that may be caused by the implementation of information technology initiatives, or by restructurings;
(12)
real estate rates and availability, which may affect the Company’s ability to increase or maintain the number of retail locations at which the Company sells its products and the costs associated with the Company’s other facilities;
(13)
changes in product mix to products which are less profitable;
(14)
the Company’s ability to acquire, develop or implement new information technology, including operational technology and websites, on a timely basis and within the Company’s cost estimates; to maintain continuous operations of its new and existing information technology; and to secure the data and other information that may be stored in such technologies or other systems or media;
(15)
the Company’s ability to capitalize on opportunities for improved efficiency, such as publicly-announced strategies and restructuring and cost-savings initiatives, and to integrate acquired businesses and realize value therefrom;
(16)
consequences attributable to local or international conflicts around the world, as well as from any terrorist action, retaliation and the threat of further action or retaliation;
(17)
the timing and impact of acquisitions, investments and divestitures; and
(18)
additional factors as described in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
The Company assumes no responsibility to update forward-looking statements made herein or otherwise.
The Estée Lauder Companies Inc. is one of the world’s leading manufacturers, marketers and sellers of quality skin care, makeup, fragrance and hair care products, and is a steward of luxury and prestige brands globally. The Company’s products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced, Dr.Jart+, the DECIEM family of brands, including The Ordinary and NIOD, and BALMAIN Beauty.
ELC-F
ELC-E
CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
(Unaudited)
Three Months Ended
December 31
Percentage
Change
Six Months Ended
December 31
Percentage
Change
($ in millions, except per share data)
2025
2024
2025
2024
Net sales(A)
$
4,229
$
4,004
6
%
$
7,710
$
7,365
5
%
Cost of sales(A)
994
957
4
1,921
1,885
2
Gross profit
3,235
3,047
6
5,789
5,480
6
Gross margin
76.5
%
76.1
%
75.1
%
74.4
%
Operating expenses
Selling, general and administrative
2,627
2,585
2
4,923
4,883
1
Restructuring and other charges(A)
207
181
14
296
278
6
Impairment of goodwill and other intangible assets(B)
—
861
(100
)
—
861
(100
)
Talcum litigation settlement agreements(C)
—
—
—
—
159
(100
)
Total operating expenses
2,834
3,627
(22
)
5,219
6,181
(16
)
Operating expense margin
67.0
%
90.6
%
67.7
%
83.9
%
Operating income (loss)
401
(580
)
100
+
570
(701
)
100
+
Operating income (loss) margin
9.5
%
(14.5
)%
7.4
%
(9.5
)%
Interest expense
85
90
(6
)
171
182
(6
)
Interest income and investment income, net
21
23
(9
)
51
58
(12
)
Other components of net periodic benefit cost
4
3
33
8
5
60
Earnings (loss) before income taxes
333
(650
)
100
+
442
(830
)
100
+
Provision (benefit) for income taxes
171
(60
)
100
+
233
(84
)
100
+
Net earnings (loss)
$
162
$
(590
)
100
+%
$
209
$
(746
)
100
+%
Net earnings (loss) per common share
Basic
$
.45
$
(1.64
)
100
+%
$
.58
$
(2.07
)
100
+%
Diluted
$
.44
$
(1.64
)
100
+%
$
.57
$
(2.07
)
100
+%
Weighted-average common shares outstanding
Basic
362.1
360.0
361.7
359.8
Diluted
364.8
360.0
364.2
359.8
(A) Included in net sales, cost of sales and restructuring and other charges are the impacts of returns and charges associated with the restructuring program component of the PRGP and the Post-COVID Business Acceleration Program (the “PCBA Program”). Additional information about the restructuring program component of the PRGP and the PCBA Program is included in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
(B) During the fiscal 2025 second quarter, the TOM FORD brand experienced lower-than-expected growth within key geographic regions and channels, including in mainland China, Asia travel retail and Hong Kong SAR. Also during the fiscal 2025 second quarter, the Too Faced reporting unit experienced lower-than-expected results in key geographic regions and channels. As a result, the Company made revisions to the internal forecasts relating to its TOM FORD brand and Too Faced reporting unit. Additionally, there were increases in the weighted average cost of capital for the TOM FORD brand and Too Faced reporting unit as compared to the prior-year annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2024. The Company concluded that the changes in circumstances in the TOM FORD brand and Too Faced reporting unit, along with increases in the weighted average cost of capital, triggered the need for interim impairment reviews of the TOM FORD trademark and the Too Faced trademark and goodwill. These changes in circumstances were also an indicator that the carrying amounts of Too Faced’s long-lived assets, including customer lists, may not be recoverable. After performing the relevant impairment assessments, the Company recorded $773 million and $75 million of trademark intangible asset impairment charges for TOM FORD and Too Faced, respectively, as well as a $13 million goodwill impairment charge related to Too Faced.
For the three and six months ended December 31, 2024, charges related to goodwill and other intangible asset impairments were $861 million ($674 million, net of tax), with an impact of $1.87 per common share.
(C) From the end of August 2024 through October 2024, the Company reached agreements with certain plaintiff law firms (collectively, the “talcum litigation settlement agreements”) for: (i) the resolution of pending cosmetic talcum powder matters handled by those firms as well as (ii) a process for resolving potential future cosmetic talcum powder claims expected to be brought on behalf of plaintiffs by those firms from January 1, 2025 through December 31, 2029, with annual capped amounts per year for each participating law firm. To account for the talcum litigation settlement agreements, the Company recorded a charge of $159 million in the fiscal 2025 first quarter for the amount agreed to settle the current claims and an estimated amount for potential future claims.
Results by Product Category
(Unaudited)
Six Months Ended December 31
Net Sales
Percentage Change1
Operating
Income (Loss)
Percentage
Change
($ in millions)
2025
2024
Reported
Basis
Impact of
Foreign
Currency
Translation
Organic
Net Sales
(Non-GAAP)
2025
2024
Reported
Basis
Skin Care
$
3,629
$
3,450
5
%
(1
)%
4
%
$
641
$
423
52
%
Makeup
2,194
2,188
—
(2
)
(1
)
3
(396
)
100
+
Fragrance
1,533
1,374
12
(2
)
10
191
(386
)
100
+
Hair Care
297
298
—
—
(1
)
6
(21
)
100
+
Other
56
55
2
—
2
22
(34
)
100
+
Subtotal
$
7,709
$
7,365
5
%
(1
)%
3
%
$
863
$
(414
)
100
+%
Returns/charges
associated with
restructuring and
other activities
1
—
(293
)
(287
)
Total
$
7,710
$
7,365
5
%
(1
)%
3
%
$
570
$
(701
)
100
+%
Non-GAAP Adjustments to As Reported Operating Income (Loss):
Returns/charges associated with restructuring and other activities
293
287
Makeup - Goodwill and other intangible asset impairments
—
258
Fragrance - Other intangible asset impairments
—
549
Other - Other intangible asset impairments
—
54
Makeup - Talcum litigation settlement agreements
—
159
Adjusted Operating Income - Non-GAAP
$
863
$
606
42
%
1Percentages are calculated on an individual basis.
Results by Geographic Region
(Unaudited)
Six Months Ended December 31
Net Sales
Percentage Change1
Operating
Income (Loss)
Percentage
Change
($ in millions)
2025
2024
Reported
Basis
Impact of
Foreign
Currency
Translation
Organic
Net Sales
(Non-GAAP)
2025
2024
Reported
Basis
The Americas
$
2,392
$
2,406
(1
)%
—
%
(1
)%
$
191
$
(856
)
100
+%
EUKEM
2,084
1,953
7
(5
)
1
162
155
5
Asia/Pacific
1,773
1,694
5
1
5
350
228
54
Mainland China
1,460
1,312
11
—
11
160
59
100
+
Subtotal
$
7,709
$
7,365
5
%
(1
)%
3
%
$
863
$
(414
)
100
+%
Returns/charges
associated with
restructuring and other
activities
1
—
(293
)
(287
)
Total
$
7,710
$
7,365
5
%
(1
)%
3
%
$
570
$
(701
)
100
+%
Non-GAAP Adjustments to As Reported Operating Income (Loss):
Returns/charges associated with restructuring and other activities
293
287
The Americas - Goodwill and other intangible asset impairments
—
861
The Americas - Talcum litigation settlement agreements
—
159
Adjusted Operating Income - Non-GAAP
$
863
$
606
42
%
1Percentages are calculated on an individual basis.
This earnings release includes some non-GAAP financial measures relating to charges associated with restructuring and other activities and adjustments, as well as organic net sales. Included herein are reconciliations between the non-GAAP financial measures and the most directly comparable GAAP measures for certain consolidated statements of earnings (loss) accounts before and after these items. The Company uses certain non-GAAP financial measures, among other financial measures, to evaluate its operating performance, which represent the manner in which the Company conducts and views its business. Management believes that excluding certain items that are not comparable from period-to-period, or do not reflect the Company’s underlying ongoing business, provides transparency for such items and helps investors and others compare and analyze operating performance from period-to-period. In the future, the Company expects to incur charges or adjustments similar in nature to those presented herein; however, the impact to the Company’s results in a given period may be highly variable and difficult to predict. The Company’s non-GAAP financial measures may not be comparable to similarly titled measures used by, or determined in a manner consistent with, other companies. While the Company considers the non-GAAP measures useful in analyzing its results, they are not intended to replace, or act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP.
The Company operates on a global basis, with the majority of its net sales generated outside the United States. Accordingly, fluctuations in foreign currency exchange rates can affect the Company’s results of operations. Therefore, the Company presents certain net sales information excluding the effect of foreign currency rate fluctuations to provide a framework for assessing the performance of its underlying business outside the United States. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. The Company calculates constant currency information by translating current-period results using prior-year period monthly average foreign currency exchange rates and adjusting for the period-over-period impact of foreign currency cash flow hedging activities.
Reconciliation between GAAP and Non-GAAP Net Sales
(Unaudited)
Three Months Ended
December 31
Percentage
Change
Six Months Ended
December 31
Percentage
Change
($ in millions)
2025
2024
2025
2024
Net Sales
$
4,229
$
4,004
6
%
$
7,710
$
7,365
5
%
Non-GAAP Adjustments
Returns associated with restructuring and other activities
—
—
(1
)
—
Adjusted Net Sales, Non-GAAP
4,229
4,004
7,709
7,365
Impact of foreign currency translation
(74
)
—
(99
)
—
Organic Net Sales, Non-GAAP
$
4,155
$
4,004
4
%
$
7,610
$
7,365
3
%
Reconciliation of Certain Consolidated Statements of Earnings (Loss) Accounts
Before and After Returns, Charges and Other Adjustments
(Unaudited)1
Three Months Ended
December 31
Percentage
Change
Six Months Ended
December 31
Percentage
Change
($ in millions, except per share data)
2025
2024
2025
2024
Gross Profit
$
3,235
$
3,047
6
%
$
5,789
$
5,480
6
%
Non-GAAP Adjustments
Restructuring and other activities
—
—
(3
)
9
Adjusted Gross Profit, Non-GAAP
3,235
3,047
6
%
5,786
5,489
5
%
Impact of foreign currency translation
(51
)
—
(69
)
—
Adjusted Gross Profit, Non-GAAP constant currency
$
3,184
$
3,047
4
%
$
5,717
$
5,489
4
%
Gross Margin
76.5
%
76.1
%
75.1
%
74.4
%
Non-GAAP Adjustments
Restructuring and other activities
—
—
—
0.1
Adjusted Gross Margin, Non-GAAP
76.5
%
76.1
%
75.1
%
74.5
%
Operating Income (Loss)
$
401
$
(580
)
100
+%
$
570
$
(701
)
100
+%
Non-GAAP Adjustments
Restructuring and other charges
207
181
293
287
Goodwill and other intangible asset impairments
—
861
—
861
Talcum litigation settlement agreements
—
—
—
159
Adjusted Operating Income, Non-GAAP
608
462
32
%
863
606
42
%
Impact of foreign currency translation
(11
)
—
(8
)
—
Adjusted Operating Income, Non-GAAP constant currency
$
597
$
462
29
%
$
855
$
606
41
%
Operating Margin
9.5
%
(14.5
)%
7.4
%
(9.5
)%
Non-GAAP Adjustments
Restructuring and other charges
4.9
4.5
3.8
3.9
Goodwill and other intangible asset impairments
—
21.5
—
11.7
Talcum litigation settlement agreements
—
—
—
2.2
Adjusted Operating Margin, Non-GAAP
14.4
%
11.5
%
11.2
%
8.2
%
Provision (benefit) for Income Taxes
$
171
$
(60
)
100
+%
$
233
$
(84
)
100
+%
Effective Tax Rate ("ETR")
51.4
%
9.2
%
52.7
%
10.1
%
Tax Impact on Non-GAAP adjustments
Restructuring and other charges
44
40
61
62
Goodwill and other intangible asset impairments
—
187
—
187
Talcum litigation settlement agreements
—
—
—
35
Adjusted Provision for Income Taxes, Non-GAAP
$
215
$
167
$
294
$
200
Adjusted ETR, Non-GAAP
39.8
%
42.6
%
40.0
%
41.9
%
Diluted Net Earnings (Loss) Per Common Share
$
.44
$
(1.64
)
100
+%
$
.57
$
(2.07
)
100
+%
Non-GAAP Adjustments
Restructuring and other charges
.45
.39
.64
.63
Goodwill and other intangible asset impairments
—
1.87
—
1.87
Talcum litigation settlement agreements
—
—
—
.34
Adjusted Diluted Net Earnings Per Common Share, Non-GAAP2
$
.89
$
.62
43
%
$
1.21
$
.77
58
%
Impact of foreign currency translation
(.02
)
—
(.01
)
—
Adjusted Diluted Net Earnings Per Common Share, Non-GAAP constant currency2
$
.87
$
.62
40
%
$
1.20
$
.77
56
%
1Percentages are calculated on an individual basis.
2For the three and six months ended December 31, 2024 the effects of potentially dilutive stock options, performance share units, and restricted stock units of approximately 1.1 million shares and 1.2 million shares, respectively, were excluded from the computation of As Reported and adjustments to Non-GAAP diluted loss per common share as they were anti-dilutive due to the net loss incurred during the periods. These shares were added to the weighted-average common shares outstanding to calculate Non-GAAP diluted earnings per common share.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, except where noted)
December 31,
2025
June 30,
2025
December 31,
2024
($ in millions)
(Audited)
ASSETS
Cash and cash equivalents
$
3,082
$
2,921
$
2,586
Accounts receivable, net
1,657
1,530
1,611
Inventory and promotional merchandise
1,895
2,074
2,002
Prepaid expenses and other current assets
524
544
697
Total current assets
7,158
7,069
6,896
Property, plant and equipment, net
2,966
3,172
3,049
Operating lease right-of-use assets
1,860
1,952
1,891
Other assets
7,650
7,699
7,924
Total assets
$
19,634
$
19,892
$
19,760
LIABILITIES AND EQUITY
Current debt
$
3
$
3
$
4
Accounts payable
1,260
1,497
1,133
Operating lease liabilities
413
406
397
Other accrued liabilities
3,595
3,529
3,497
Total current liabilities
5,271
5,435
5,031
Long-term debt
7,319
7,314
7,276
Long-term operating lease liabilities
1,655
1,744
1,706
Other noncurrent liabilities
1,358
1,534
1,578
Total noncurrent liabilities
10,332
10,592
10,560
Total equity
4,031
3,865
4,169
Total liabilities and equity
$
19,634
$
19,892
$
19,760
SELECT CASH FLOW DATA
(Unaudited)
Six Months Ended
December 31
($ in millions)
2025
2024
Net earnings (loss)
$
209
$
(746
)
Adjustments to reconcile net earnings (loss) to net cash flows from operating
activities:
Depreciation and amortization
397
415
Deferred income taxes
11
(292
)
Impairment of goodwill and other intangible assets
—
861
Other items
192
193
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, net
(126
)
79
Decrease in inventory and promotional merchandise
179
132
Decrease (increase) in other assets, net
25
(47
)
Decrease in accounts payable and other liabilities, net
(102
)
(208
)
Net cash flows provided by operating activities
$
785
$
387
Other Investing and Financing Uses:
Capital expenditures
$
(204
)
$
(273
)
Repayments of long-term debt, net
(2
)
(502
)
Dividends paid to stockholders
(255
)
(366
)
Payment of deferred consideration
(150
)
—
Supplemental cash flow information:
Cash paid for interest
$
168
$
179
Cash paid for income taxes
295
327
Reconciliation of Certain Consolidated Statements of Cash Flows Accounts
Cash Flows from Operating Activities to Free Cash Flow
Six Months Ended
December 31
($ in millions)
2025
2024
Net cash flows provided by operating activities
$
785
$
387
Less: capital expenditures
(204
)
(273
)
Free cash flow
$
581
$
114
View source version on businesswire.com: https://www.businesswire.com/news/home/20260205919487/en/
Investors: Rainey Mancini
rmancini@estee.com
Media: Brendan Riley
briley@estee.com
Original: The Estée Lauder Companies Reports Fiscal 2026 Second Quarter Results
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