NEW YORK, February 5, 2026, 14:56 (EST) — Regular session.
Shares of The Estée Lauder Companies dropped roughly 21% Thursday, closing at $94.45, down $25.16. Investors digested a full-year forecast that signaled slower growth in its largest market. The stock traded in a wide range, fluctuating between $90.80 and $120.98 during the session.
The scale of the decline is significant given Estée Lauder’s positioning as a turnaround bet—investors were expecting smoother execution, not another sluggish year. Thursday’s selloff zeroed in on the Americas, raising questions about the company’s ability to defend margins amid investments aimed at reigniting growth.
Chief executive Stéphane de La Faverie told Reuters the company is “navigating the complexity and volatility” in the U.S., while noting that Latin America saw slowing consumption after a strong start. Robert Ottenstein, an analyst at Evercore ISI, said the Americas remain a key focus, with sales improving sequentially to flat, though U.S. market share gains didn’t lead to retailer orders. The stock has surged about 40% in 2025. 1
Clinique and M.A.C owner Estée Lauder reported fiscal Q2 net sales of $4.229 billion with adjusted EPS at 89 cents, well above the 44 cents in reported earnings. The company raised its fiscal 2026 outlook, factoring in a roughly $100 million tariff impact, mainly in H2. It projects adjusted EPS between $2.05 and $2.25 and an operating margin ranging from 9.8% to 10.2%. Estée Lauder anticipates U.S. import tariffs could reach as high as 39% on select goods. Q3 margins are expected to shrink by about 50 basis points, driven by increased consumer investments and tariff costs. The company reaffirmed its Profit Recovery and Growth Plan, forecasting restructuring expenses between $1.2 billion and $1.6 billion and cutting 5,800 to 7,000 jobs. A quarterly dividend of 35 cents per share will be paid on March 16. 2
“Adjusted” results leave out items like restructuring and other charges. “Organic” sales remove currency fluctuations and some one-off factors, offering a clearer picture of underlying demand.
The company filed a Form 8-K on Thursday, including the earnings release plus its full-year net sales and EPS projections. 3
Shares of other U.S.-listed beauty firms also slipped. Coty lost around 9%, while e.l.f. Beauty dipped close to 8%.
But this trade carries plenty of risks. Estée Lauder’s outlook is based on the assumption that geopolitics and consumer sentiment hold steady. It calls out potential pitfalls like retailer destocking, tighter working capital, fiercer competition, and the difficulty of managing outsourcing and restructuring without hurting service levels. Plus, any further changes to trade rules could shift the tariff calculations once again. 4
As the session winds down, traders eye whether U.S. retailer orders finally align with the company’s market-share assertions. They’re also assessing if the spending on new launches can boost sell-through without causing another margin slip.
The company’s fiscal third-quarter earnings report and conference call are set for May 1 at 8:30 a.m. ET. 5
