The Estée Lauder Companies Inc. (NYSE:EL) stock jumped in Wednesday premarket trading after the beauty company reported fiscal fourth-quarter 2026 results that beat Wall Street estimates.
Adjusted earnings were 39 cents per share, beating the analyst estimate of 32 cents. The Middle East conflict reduced adjusted earnings by 5 cents per share. However, tariff refunds provided a 7-cent benefit.
Sales rose 6% year over year to $3.63 billion, beating the $3.54 billion analyst estimate. Organic net sales increased 5%.
CEO Stéphane de La Faverie said Estée Lauder had “reignited growth,” with organic sales rising 3% in fiscal 2026 and accelerating to 5% in the fourth quarter, marking a fourth straight quarter of growth.
Looking ahead, the company expects organic sales growth to accelerate in fiscal 2027 and raised its adjusted operating margin outlook, signaling confidence that its recovery can gain further momentum.
Sales Growth Broadens Across Regions
Business disruptions related to the Middle East conflict reduced consolidated sales growth by about 1 percentage point. The disruptions also cut Europe, the U.K. and emerging markets, or EUKEM, growth by about 2 percentage points.
Sales increased across all product categories except Hair Care and across every geographic region.
The Americas returned to growth, led by North America. Major campaigns, shipment timing around key shopping events and increased consumer-facing investments supported results.
The region also benefited from an $18 million gain tied to the reversal of liabilities for unused gift cards. That was partly offset by closures of certain specialty multi-retailer-operated shop-in-shop locations.
Prior-year results included $527 million in restructuring, other charges and intangible asset impairments. Those charges totaled $408 million after tax, or $1.12 per diluted share. The company also recorded a $172 million adjustment to its U.S. deferred tax asset valuation allowance, equal to 48 cents per diluted share.
Estée Lauder declared a quarterly cash dividend of 35 cents per share, payable Sept. 15 to shareholders of record Aug. 31.
Estée Lauder Backs Fiscal 2027 Sales Growth Outlook
For fiscal 2027, Estée Lauder expects adjusted earnings of $3.10 to $3.35 per share, compared with the $3.18 analyst estimate.
The company affirmed its organic net sales growth outlook of 3% to 5%. It expects stronger growth in the first half, helped by earlier product launches, higher travel retail shipments and easier comparisons.
Estée Lauder projects fiscal 2027 sales of $15.50 billion to $15.80 billion, compared with the $15.56 billion analyst estimate.
The company expects continued growth in Fragrance and Skin Care and a return to full-year growth in Makeup. It also expects more diversified growth across regions.
Estée Lauder does not currently expect the Middle East conflict to materially affect fiscal 2027 results.
Adjusted operating margin is expected at 12.7% to 13.5%, up from its previous outlook of 12.5% to 13%. The company forecasts operating cash flow of $1.3 billion to $1.4 billion for the fiscal year.
EL Price Action: Estée Lauder shares were up 13.27% at $95.45 during premarket trading on Wednesday, according to Benzinga Pro data.
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