Estée Lauder has shifted to offense from playing defense, translating its turnaround plan into solid growth.
CEO Stéphane de La Faverie said Monday that the impact of Estée Lauder's strategy, dubbed Beauty Reimagined, became "increasingly evident" across the business during the fiscal first quarter. Management added that Estée Lauder has moved past merely "restoring growth," signaling it has officially transitioned out of recovery mode.
On the back of these solid earnings, Estée Lauder raised its outlook for fiscal 2027, saying it now expects adjusted earnings to range from $3.20 and $3.45 a share, up from a prior outlook of $3.10 to $3.35. The company anticipates organic net sales to grow between 4% to 5.5% in fiscal 2027, up from a previous guidance range of 3% to 5%.
Investors cheered the solid earnings, sending shares of the beauty and cosmetic giant up 2.5% to $112.01 in premarket trading Monday. The stock was heading to close at its highest level since Feb. 24, according to Dow Jones Market Data. Shares have risen 4.3% this year as of the closing bell Friday.
Though Estée Lauder saw solid growth across its product categories in the fiscal first quarter, hair care sales slightly faltered. The figure slid 0.8% to $128 million, down from $129 million a year ago. Management said a decline in net sales from the hair care brand Aveda contributed to this decline.
Meanwhile, skin care sales -- Estée Lauder's main revenue driver -- grew 4.8% to $1.65 billion during the fiscal first quarter, while fragrance sales climbed 19% to $861 million. Sales for makeup products rose 1.8% to $1.05 billion.
Estée Lauder posted adjusted earnings of 72 cents a share in the quarter, well above Wall Street's calls for 51 cents, on net sales of $3.72 billion, surpassing analysts' consensus estimates of $3.65 billion.
As part of broader efforts to boost profitability, de la Faverie launched Beauty Reimagined last year, combining investments in higher-growth sales channels with cost-cutting strategies, including layoffs.
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