Abstract
The Estée Lauder Companies will report fiscal Q2 2026 results on February 05, 2026 Pre-Market, with investors watching whether improving margins and EPS momentum continue amid mixed ratings since October 21, 2025.
Market Forecast
Consensus tracking from the company’s latest guidance implies fiscal Q2 2026 revenue at USD 4.22 billion, adjusted EPS at USD 0.83, and EBIT at USD 536.22 million, with year-over-year growth of 6.31%, 159.69%, and 96.74%, respectively. Margin expectations point to a sequentially improving gross profit margin, while the net profit margin will depend on continued cost control and normalized inventory; explicit YoY margin guidance is not issued. The core Skin Care, Makeup, and Fragrance franchises are expected to lead revenue, with travel retail normalization and holiday demand shaping the outlook. Skin Care appears the most promising segment, supported by premium brand momentum; last quarter Skin Care revenue was USD 1.58 billion and benefited from improving sell-through, with momentum expected to continue year-over-year.
Last Quarter Review
Last quarter, Estée Lauder posted revenue of USD 3.48 billion, a gross profit margin of 73.31%, GAAP net profit attributable to the parent company of USD 47.00 million, a net profit margin of 1.35%, and adjusted EPS of USD 0.32, with year-over-year growth in adjusted EPS of 128.57%. A notable highlight was the strong sequential recovery in net profit, with quarter-on-quarter growth at 108.61%, driven by operating expense discipline and improved channel inventory alignments. Main business highlights included Skin Care at USD 1.58 billion, Makeup at USD 1.03 billion, Fragrance at USD 0.72 billion, and Hair Care at USD 0.13 billion, indicating broad-based recovery across categories.
Current Quarter Outlook (with major analytical insights)
Main Business Momentum
Skin Care, Makeup, and Fragrance remain the company’s primary revenue engines in fiscal Q2 2026. The holiday season sell-through and ongoing travel retail normalization should support improved mix and pricing, sustaining gross margin above 70.00%. Management’s cost actions and moderated promotional intensity are likely to translate into a healthier net profit margin relative to last quarter’s 1.35%, though the degree of improvement will hinge on regional retail inventory behavior in North America and Asia. We expect adjusted EPS to map to the company’s forecast of USD 0.83, reflecting operating leverage on mid-single-digit revenue growth.
Most Promising Segment
Skin Care shows the clearest path to sustained growth due to premium brand strength and improving replenishment at key retail partners. With last quarter revenue at USD 1.58 billion, Skin Care benefited from better sell-through and targeted innovation, and it stands to gain from Chinese consumer demand stabilization and travel corridors aiding duty-free channels. The segment’s margin profile is attractive relative to Makeup and Fragrance, supporting the company-level gross margin resilience. We expect Skin Care’s year-over-year growth contribution to align with the overall revenue growth rate of 6.31%, with upside if travel retail improves faster than anticipated.
Stock Price Drivers This Quarter
Three themes are likely to influence the share price reaction around the print: the cadence of travel retail recovery, the effectiveness of cost controls in lifting EBIT margin, and guidance for the second half of fiscal 2026. A delivery near the forecast ranges—USD 4.22 billion in revenue and USD 0.83 in EPS—should validate progress, while any signs of inventory build or tariff-related headwinds could pressure multiples. Investors will also scrutinize the gross margin trajectory after last quarter’s 73.31%, with positive commentary on mix-shift and promotion discipline serving as a potential catalyst.
Analyst Opinions
Across recent institutional notes since October 21, 2025, views are mixed, with a balance of Buy and Hold and fewer explicit Sell calls. Notable institutions include Bank of America Securities maintaining a Buy stance and Deutsche Bank keeping a Buy rating with a USD 103.00 price target, contrasted by Berenberg Bank and Jefferies maintaining Hold ratings and Telsey Advisory reiterating Hold. The majority tilt leans constructive on margin recovery and EPS trajectory, with Deutsche Bank highlighting EBIT improvement as a key lever, and Bank of America emphasizing improving category momentum into fiscal Q2 2026. Overall, the dominant view expects revenue around USD 4.22 billion and adjusted EPS near USD 0.83, with the stock reaction sensitive to travel retail commentary and second-half guidance strength.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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