Estée Lauder Raises 2027 Outlook After Sales Grow 7% to $3.715 Billion
Key Facts
Estée Lauder reported net sales of $3.715 billion in the first quarter of fiscal 2027, up 7% year over year, while organic sales rose 6% to $3.696 billion. That marked an improvement from the same period in the prior fiscal year, when the company recorded net sales of $3.481 billion and organic sales of $3.480 billion. The company reported results on Nov. 2 for the three months ended Sept. 30, 2026. The figures came in a quarter that saw adjusted profit margins rise, alongside varied growth across its product categories. The company also raised its fiscal 2027 outlook ranges for organic sales, adjusted operating margin and adjusted earnings per share.
Adjusted gross margin was 75.7%, compared with 73.3% in the year-earlier fiscal 2026 quarter, while adjusted operating margin rose to 12.1% from 7.3%. The expansion in both margins reflects improved profitability during the quarter, alongside sales growth. Chief Executive Stéphane de La Faverie said, "Growth is accelerating, profitability is strengthening significantly, and the impact of our reimagined beauty transformation is becoming more evident." In its statement, the company linked the quarter to its ongoing transformation, while the results showed improvement in operating metrics from a year earlier. The company did not cite a lower adjusted tax rate as the reason for raising its outlook; instead, it attributed the increase to strong first-quarter performance, while remaining cautious about prevailing conditions.
Fragrance led category growth, with sales rising 20% during the quarter, followed by skin care, up 4%, and makeup, up 1%. The company attributed skin care growth mainly to La Mer and The Ordinary, while it said M·A·C was a key driver for makeup. The figures highlight differing growth rates among categories, with fragrance ahead of skin care and makeup. For the coming period, the company pointed to continued growth in fragrance and skin care, and a return to growth in makeup over the full fiscal year. It also said improved travel retail performance would support its sales outlook for the first half.
Estée Lauder raised its fiscal 2027 organic sales growth outlook to a range of 4.0% to 5.5%, from the previous range of 3% to 5%. It also raised its adjusted operating margin outlook to 12.9%–13.7%, from 12.7%–13.5% previously. The adjusted diluted earnings-per-share range is now $3.20–$3.45, compared with $3.10–$3.35. The company said the higher outlook reflects strong first-quarter performance, while it continues to take a cautious approach because of geopolitical and macroeconomic uncertainty. The revised outlook therefore combines higher growth and profitability ranges with a warning about volatile external conditions.
The company attributed its improved first-half sales outlook to more product launches earlier in fiscal 2027, improving travel retail trends as the year began, and a lower comparison base for that business in the first half. It said it expects fragrance and skin care to continue growing, with makeup returning to growth over the full fiscal year. Regarding regional tensions, the company said that, based on conditions at the time of its statement, it did not expect the conflict in the Middle East to have a material effect on fiscal 2027 results. It added that it would continue to monitor the situation closely, while remaining cautious about geopolitical and macroeconomic uncertainty. The information provided did not include a specific later date for a company event or financial update.