New York, May 1, 2026, 10:14 EDT
- Estée Lauder bumped up its fiscal 2026 profit forecast following a better-than-expected third quarter.
- Estée Lauder, which owns Clinique, M.A.C, and La Mer, is now projecting 9,000 to 10,000 layoffs as part of its restructuring plan.
- The company is pushing ahead with a possible deal with Puig while also working to revive growth in China, fragrances, and digital sales.
Estée Lauder Companies Inc. bumped up its full-year profit outlook Friday and announced a wider restructuring effort, targeting a net reduction of 9,000 to 10,000 jobs while the cosmetics giant intensifies cost-cutting in its turnaround push. Shares jumped roughly 7% at the open.
This latest update lands as Estée Lauder improves its earnings forecast and accelerates a shift away from its traditional retail approach. The company noted that over 70% of its expanded job cuts will target demonstration staff at underperforming department stores and standalone shops—moves designed to steer focus toward channels showing more growth.
This is also shaping up as a test for Chief Executive Stéphane de La Faverie’s “Beauty Reimagined” strategy. Estée Lauder has struggled with softening demand across the Americas, choppy travel retail, and a drawn-out slump in prestige beauty markets in parts of Asia. Now, the possible merger with Spain’s Puig—the group behind Jean Paul Gaultier and Byredo—throws yet another variable into the mix. Reuters
Net sales for the fiscal third quarter ended March 31 hit $3.71 billion, up 5%. Organic net sales—excluding currency swings and select one-offs—added 2% to reach $3.61 billion. Adjusted diluted earnings climbed to 91 cents a share, compared with 65 cents in the prior year.
Estée Lauder lifted its fiscal 2026 adjusted diluted EPS outlook to $2.35–$2.45, compared with the previous $2.05–$2.25 range. The company is also projecting organic sales growth around 3%, nudging to the top end of its earlier 1%–3% guidance.
“Our third quarter results extend strong year-to-date performance, driven by Beauty Reimagined,” de La Faverie said in the company’s release. Fragrance posted double-digit gains across the first nine months of the fiscal year. Three of the company’s four regions saw growth, with Mainland China taking the lead. El Companies
The company lifted its outlook for annual gross benefits from its restructuring program, now targeting $1.0 billion to $1.2 billion before taxes, compared to the previous estimate of $800 million to $1.0 billion. Related restructuring and other charges are projected at $1.5 billion to $1.7 billion, also before taxes.
Reuters, referencing Estée Lauder’s most recent annual report, says the upper limit on job cuts would hit about 17.5% of the company’s workforce—roughly 57,000 staff as of June 30, 2025. “The increase in planned job cuts could be an indication that in light of merger plans, Estée Lauder will be able to shed more positions on its side while retaining Puig employees,” eMarketer analyst Sky Canaves said. Reuters
Fragrance sales jumped 13% as reported and 10% organically, hitting $628 million, with Le Labo, Kilian Paris, Balmain Beauty and Tom Ford all contributing. Skincare and makeup, by comparison, were mostly unchanged on an organic basis.
China played a role, too. Estée Lauder reported that sales in Mainland China climbed 11% as reported, and 6% organically during the quarter. The company said it picked up prestige-beauty market share there for the third consecutive fiscal quarter, thanks in part to La Mer, Tom Ford, Le Labo, and The Ordinary.
The landscape is moving quickly now. Back in March, Reuters reported that Estée Lauder and Puig were in talks over a possible tie-up, a deal that could build a $40 billion luxury beauty player and boost their standing in the fragrance business against L’Oréal. RBC Capital Markets analyst Nik Modi saw the logic, telling Reuters Estée Lauder faces a “big gap” in fragrance compared with both L’Oréal and LVMH. Reuters
But there’s not much buffer in the outlook for any new surprises. Estée Lauder’s forecast counts on tariffs, consumer mood, and Middle East business conditions holding steady past May 2026; the company projects around $100 million in tariff-related drag for fiscal 2026 profits, with Middle East disruption trimming roughly 2 percentage points off fourth-quarter sales growth.
The company booked an $84 million loss contingency, net of what it expects to recover from insurance, related to a tentative deal to resolve a consolidated securities class action in New York federal court. That hit dragged reported operating margin down to 6.7%, from 8.6%. Adjusted operating margin, though, improved to 15.0%.
This week, Estée Lauder revealed it has taken a minority stake in 111SKIN, the luxury skincare label developed by Dr. Yannis Alexandrides. Terms of the deal weren’t made public. The move lines up with Estée Lauder’s ongoing shift toward upscale, science-driven skincare, even as the company trims expenses in other areas.
