Quick Overview

  • The beauty giant exceeded Q3 earnings projections with adjusted EPS of $0.91 compared to analyst expectations of $0.65
  • Quarterly revenue reached $3.71 billion, marking a 5% increase from the previous year
  • The company elevated its full-year adjusted EPS forecast to $2.35–$2.45, surpassing the $2.22 analyst consensus
  • An additional workforce reduction of up to 3,000 positions was announced, expanding total cuts to 9,000–10,000 roles
  • Shares of EL climbed approximately 13% during Friday’s premarket session

Shares of Estée Lauder rallied approximately 13% in premarket activity Friday morning following the release of third-quarter financial results that exceeded Wall Street projections and an upward revision to annual guidance.


EL Stock Card
The Estée Lauder Companies Inc., EL

The company delivered adjusted earnings per share of $0.91, significantly above the analyst consensus of $0.65. Quarterly revenue totaled $3.71 billion, surpassing the $3.69 billion estimate while representing a 5% increase from $3.55 billion in the same period last year. Organic net sales advanced 2% on a year-over-year basis.

Fragrance products powered the quarterly performance, with organic net sales in the segment climbing 10%. High-end brands such as Le Labo, KILIAN PARIS, BALMAIN Beauty, and TOM FORD each achieved double-digit revenue increases.

Skin care revenues remained essentially unchanged, while makeup and hair care divisions each recorded flat organic growth during the quarter.

Chinese Market Shows Strength

Regional performance highlighted Mainland China with 6% organic growth. This marked the third straight quarter where the company exceeded the broader prestige beauty market in that territory.

Priority Emerging Markets delivered double-digit expansion, while three of the company’s four geographic regions recorded positive growth.

Adjusted operating margin widened by 360 basis points to reach 15.0%, compared to 11.4% in the year-ago quarter. Adjusted gross margin increased 140 basis points to 76.4%.

Vital Knowledge analysts highlighted operating margins as the report’s most impressive element, emphasizing that aggressive expense management played a central role.

Workforce Reduction Expands

Accompanying the earnings announcement, Estée Lauder revealed intentions to eliminate up to 3,000 additional positions across its global operations. This expansion increases the total planned workforce reduction to between 9,000 and 10,000 employees, up from an earlier target of up to 7,000.

At the upper end of this range, the reductions would account for roughly 17.5% of the company’s 57,000-person workforce as of June 2025.

Over 70% of these additional eliminations will affect department store personnel, reflecting the company’s strategic pivot toward digital platforms and specialty retail partners such as Ulta, Sephora, Amazon, and TikTok Shop.

The restructuring initiative targets cost savings reaching as high as $1.2 billion.

CEO Stéphane de La Faverie attributed the quarterly gains to the “Beauty Reimagined” strategic initiative, highlighting improved results in luxury markets across China and Europe.

The company continues discussions regarding a potential merger with Puig, which owns Jean Paul Gaultier. One analyst suggested the expanded workforce reduction target might indicate preparation for position eliminations on Estée Lauder’s end in anticipation of a possible transaction.

Full-year adjusted EPS projections were elevated to $2.35–$2.45, up from the previous range of $2.05–$2.25. Management also anticipates organic net sales growth toward the upper end of its prior 1%–3% guidance range.

Looking ahead to fiscal 2027, Estée Lauder provided preliminary expectations calling for organic net sales growth of 3%–5% and an adjusted operating margin between 12.5%–13.0%.

Management emphasized that current projections assume stable geopolitical conditions, including tariff policies and consumer confidence levels, along with no additional business interruptions in the Middle East beyond May 2026.