Estee Lauder is entering the next era of its turnaround.
The beauty conglomerate has spent the past several years working to transform its business, stepping up investments in consumer-facing operations and expanding into higher-growth sales channels. The company has also cut costs, in part through layoffs.
These efforts have contributed to five consecutive quarters of organic sales growth and margin expansion, Chief Executive Stephane de La Faverie said Monday. Now, Estee Lauder is looking beyond stabilization, working to build a stronger foundation for sustained growth.
"We are becoming a faster, more agile and more disciplined organization," he said on a call with analysts.
Estee Lauder shares gave up their premarket gains, recently trading about 1% lower at $108, after the company raised its outlook for the year and logged higher profit and sales in the latest quarter.
The owner of beauty brands such as MAC, Smashbox and Jo Malone reported net sales of $3.72 billion in its fiscal first quarter, up 6.7% from a year earlier and ahead of Wall Street models. Growth was broad-based, the company said, with three out of four categories as well as every geographic region notching higher sales.
Skin care--Estee Lauder's largest division--logged sales of $1.65 billion, marking a 4.8% increase from a year earlier. The company's fragrance division was its fastest-growing, with sales jumping 19% to $861 million.
De La Faverie said Estee Lauder is winning over new customers and gaining market share, thanks to investments the company has made in experiential retail across both department and free-standing stores, as well as efforts to expand its online presence in higher-growth channels such as Amazon.com and TikTok Shop.
Looking ahead, Estee Lauder raised its outlook for organic net sales growth to between 4% and 5.5%, up from a prior forecast of 3% to 5%.
The company also guided for adjusted earnings of $3.20 to $3.45 a share, compared with a previous view of $3.10 to $3.35 a share. Analysts are looking for adjusted earnings of $3.32 a share.
For its three months ended Sept. 30, Estee Lauder reported a profit of $233 million, or 64 cents a share, up from $47 million, or 13 cents a share, a year earlier. On an adjusted basis, quarterly earnings of 72 cents a share topped analyst expectations for 51 cents a share, according to FactSet.
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