The stock is down about 2 percent today, its fourth straight down day, and it has now slipped about 4 percent from its high earlier this month. We think this is mostly about pre-earnings jitters, as investors wait for Wednesday's results to see if the company's turnaround plan is actually working.
Our view
The business is in a tough spot as it tries to win back shoppers in China and cut costs. We'd wait to see if those profit margins actually start climbing again before getting more comfortable, so for now, owners should just sit tight.
Estée Lauder partners with University of Leeds for shade matching
Estée Lauder has launched a research partnership with the University of Leeds to study color science and how people perceive their own skin tones. The goal is to solve a common frustration in the beauty industry by making it easier for customers to find the right shades for products like foundation and concealer. While this is a small research step, it is part of the company's effort to use technology to keep its high-end brands competitive. For a business trying to win back customers in a crowded market, better matching tools could help reduce product returns and improve digital sales.
The company will share its full-year results on August 19. This will be an important check on the recovery plan aimed at cutting costs and fixing issues in the Asian market. Management will also provide a look at what they expect for the coming year.
New fragrance Glimmer launched to reach younger buyers
The company is launching a new fragrance named Glimmer to attract younger customers. While a single product launch rarely changes the outlook for a company this size, it shows the ongoing effort to refresh the brand lineup. The campaign features actress Hailee Steinfeld as the face of the brand.
Board or executive changes disclosed in new filing
A new filing shows changes to the leadership team or the board of directors. This comes as the company works through a multi-year plan to fix its supply chain and return to growth. Leadership stability is a key factor as they try to turn around sales in China and clear out unsold inventory in Asia.
Madeleine Boyd will lead a newly integrated team to manage how the company's various brands talk to customers. This is part of a broader effort to make the company's marketing more effective. For a business trying to win back shoppers in a weak economy, better communication across its many brands is a helpful step.
Analysts have recently adjusted their expectations as the company prepares to report its latest quarterly earnings. Most analysts are split, with 20 recommending a buy and 22 holding, while the average target price suggests an 8% upside.
Average target$91+8%vs $84.61 today
TodayAvg price
Low $80High $111
Hold46 analysts
4Bearish
22Neutral
20Bullish
FirmRatingPrice TargetDate
Seaport Global
—
$95
8/14/2026
Jefferies
Hold
$80→$88
7/28/2026
Cowen & Co.
—
$90
7/21/2026
Barclays
Equal Weight
$75→$80
7/21/2026
UBS
Neutral
$85→$86
7/16/2026
Goldman Sachs
Buy
$100
6/22/2026
Bernstein
Market Perform
$82
6/11/2026
Piper Sandler
Overweight
$95
5/15/2026
Barclays
Equal Weight
$72→$75
5/5/2026
UBS
Neutral
$75→$85
5/4/2026
Telsey Advisory
Market Perform
$105→$90
5/4/2026
Morgan Stanley
—
$85→$90
5/4/2026
Estée Lauder earnings
Management has a perfect record of clearing the bars they set for themselves over the last two years. They consistently report profits that come in higher than what analysts expect.
Earnings history
EstimateBeatMiss
Estée Lauder past earnings results
Expected
Actual
Surprise
EPS
$0.65
$0.91
+40.4%
Revenue
$3.69B
$3.71B
+0.6%
Key highlights
Profit recovery plan expanding: The company increased its expected job cuts to between 9,000 and 10,000 positions, up from a previous high of 7,000, to help fuel a massive reorganization of its department store business. This expanded plan is now expected to save between $1.0 billion and $1.2 billion annually as the company tries to fix its profit margins.
Mainland China gaining momentum: Sales in Mainland China grew 6% on an organic basis, which excludes the impact of currency swings and buyouts, marking the third straight quarter that the company grew faster than the rest of the luxury beauty market there. This turnaround is vital because China is a major profit driver that had been struggling with slow consumer spending.
Fragrance leads product growth: Fragrance sales grew 10% this quarter led by high-end brands like Le Labo and Tom Ford, making it the strongest performing category. This growth helped offset flat results in skin care and makeup, where some brands like Clinique saw sales drop by high single digits.
Cash flow improving sharply: Free cash flow, which is the cash a company has left after paying for its operations and equipment, jumped to $891 million compared to $276 million a year ago. Management is using this extra cash to pay down debt from the $2.8 billion Tom Ford acquisition and to fund its ongoing restructuring.
Financial outlook raised: For the full year of 2026, the company now expects sales growth of 3% and adjusted profit margins of up to 11.0%. Looking further ahead to 2027, management gave an early forecast for sales growth between 3% and 5% as it expects the global luxury beauty market to speed up.
Our take: This was a pivotal quarter that proves the company is finally turning the corner. Strong growth in China and a major expansion of the cost-cutting plan suggest management is successfully leanng into more profitable channels. While the restructuring is expensive, these results strengthen the case that the business is returning to its historical health.
Estée Lauder’s next earnings date
Q4 2026
AUG
19
Expectation
EPS
$0.32
Revenue
$3.55B
Metrics we are tracking
Metric
Expectations
Status
Organic Sales Growth
Sustained positive growth for two consecutive quarters
2% in Q3 2026
Operating Margin
Returning to 14% or higher by FY2026
15.0% (Adjusted) in Q3 2026
Inventory Turnover
Improving to 3.0x or higher annually
1.8x as of FY2025
China Market Share
Holding steady or growing against local competitors
