Estée Lauder (EL) Stock Surges 7% on Strong Q4 Earnings Beat and Improved Margins

Key Highlights

• Fourth-quarter revenue increased 6.3% year-over-year to $3.63 billion, surpassing analyst projections of $3.55 billion
• Adjusted earnings per share of $0.39 exceeded the consensus estimate of $0.32
• Net loss contracted significantly to $116 million from $546 million in the prior-year period
• Workforce reduction of 10,000 positions completed, reaching the upper limit of guidance
• Operating margin forecast increased to 12.7%-13.5% range from previous 12.5%-13% projection

Shares of Estée Lauder climbed approximately 7% during Wednesday’s premarket session, reaching $90.81, following the cosmetics powerhouse’s quarterly earnings report that exceeded Wall Street forecasts and demonstrated meaningful progress in its ongoing transformation efforts.

The Estée Lauder Companies Inc., EL

Revenue for the company’s fiscal fourth quarter, which concluded on June 30, increased 6.3% to reach $3.63 billion. This performance surpassed the Street’s projection of $3.55 billion. On an adjusted basis, earnings per share registered at $0.39, beating the analyst consensus of $0.32.

The company’s net loss for the quarter contracted to $116 million, equivalent to $0.32 per share, compared with a loss of $546 million, or $1.51 per share, during the comparable quarter last year.

The skin care division delivered robust growth, posting an 8.7% increase to $1.85 billion in sales. The fragrance category surged 10% to reach $618 million. Makeup revenues advanced 2.9% to $1.01 billion. Hair care represented the only underperforming segment, declining 0.7% to $140 million.

These quarterly figures capped off a fiscal year that broke a three-year streak of declining annual revenues, a downturn that had erased approximately $100 billion in shareholder value since the company reached its post-pandemic valuation peak in early 2022.

Transformation Efforts Accelerate

Chief Executive Stéphane de La Faverie, who assumed leadership in 2025, has prioritized improving profitability metrics. The organization reported achieving $1.2 billion in aggregate gross benefits through its profit recovery and expansion initiative, matching the upper boundary of its previously communicated target range.

Estée Lauder verified the completion of a net workforce reduction totaling 10,000 roles, likewise at the maximum of its guided parameters. Management indicated these personnel adjustments will generate a 50% improvement in corporate employee productivity. Aggregate cumulative restructuring charges landed marginally above the top end of the $1.5 billion to $1.7 billion guidance range.

“We concluded the fiscal year with strong momentum, as organic sales growth reached 5% for our fourth straight quarter of expansion alongside enhanced profitability,” de La Faverie stated.

Forward Guidance Enhanced

Looking ahead to the coming fiscal year, Estée Lauder retained its organic revenue growth projection of 3% to 5%, supported by sustained momentum in the fragrance and skin care categories, coupled with an anticipated rebound in the makeup segment.

Management elevated its adjusted operating margin forecast to a band of 12.7% to 13.5%, representing an increase from the preliminary range of 12.5% to 13%.

The company also reiterated its fiscal 2027 revenue targets.

Management has been broadening its appeal to younger demographics through partnerships with Amazon and TikTok Shop, while simultaneously accelerating innovation cycles across its diverse brand stable, which encompasses La Mer, Jo Malone London, MAC, Smashbox and Kilian Paris.

As of the August 18 market close, EL shares were trading at $84.27.