Estée Lauder raises fiscal 2027 profit forecast as sales rise 7%

Estée Lauder (EL) raised its fiscal 2027 outlook after first-quarter net sales rose 7%, the company said on Nov. 2 in its results release.

Shares were little changed in regular trading as of 9:39 a.m. ET, from a regular-session close of $109.23.

Here’s how the company did:

• Net sales: $3.72 billion vs. $3.48 billion a year earlier
• Diluted earnings per share: 64 cents vs. 13 cents a year earlier
• Adjusted diluted earnings per share: 72 cents vs. 32 cents a year earlier

Organic net sales, a non-GAAP measure that excludes currency effects, rose 6% for the quarter ended Sept. 30.

Operating income was $408 million, up from $169 million a year earlier. Adjusted operating margin reached 12.1%, up from 7.3%.

The company’s net sales growth came across nearly all product categories and every geographic region, according to the release.

Net income swung from a profit of $89.0 million in the third quarter of fiscal 2026 to a loss of $116.0 million in the fourth quarter, according to its SEC filings.

Raised fiscal 2027 outlook

The company now expects organic net sales growth of 4.0% to 5.5% for the year ending June 30, 2027, up from the 3% to 5% range it gave on Aug. 19.

It expects adjusted operating margin of 12.9% to 13.7%, up from 12.7% to 13.5%.

Adjusted diluted EPS is forecast at $3.20 to $3.45, up from $3.10 to $3.35, a 28% to 38% increase over fiscal 2026.

Operating cash flow is expected between $1.4 billion and $1.5 billion, up from $1.3 billion to $1.4 billion.

The company completed its acquisition of the remaining equity interest in Mountain Valley Springs India Private Limited, owner of the Forest Essentials brand, on Oct. 5. The company expects the brand to have no material impact on its fiscal 2027 net sales or diluted EPS.

“We are raising our fiscal 2027 outlook, reflecting both our strong start and our conviction in the future we are creating,” said President and CEO Stéphane de La Faverie.

Segment results

Fragrance net sales rose 19% to $861 million from $721 million, and Skin Care net sales rose 5% to $1.65 billion.

Makeup net sales rose 2% to $1.05 billion, and Hair Care net sales fell 1% to $128 million.

By region, The Americas posted net sales of $1.23 billion, up 5%. Asia/Pacific rose 9% to $952 million, and Mainland China rose 15% to $614 million.

Asia/Pacific operating income increased 73% to $259 million from $150 million.

Costs, cash and dividend

Restructuring and other charges fell to $40 million from $89 million a year earlier.

Net cash flows used for operating activities narrowed to $166 million from $340 million. Free cash flow was negative $235 million, compared with negative $436 million a year earlier.

Cash and cash equivalents stood at $3.20 billion, compared with $2.22 billion a year earlier.

The company also announced a quarterly dividend of 35 cents per share, payable Dec. 15 to stockholders of record at the close of business on Nov. 30.

The company will hold a Capital Markets Experience in Shanghai and webcast its presentations on Nov. 4.