The Tamesis
The fog is slowly clearing about The Estée Lauder Companies (ELC). The company announced on Friday that organic net sales increased 2% to $3.61 billion in the third quarter of fiscal 2026, which ended March 31, 2026.
“Our third quarter results continue our strong year-to-date performance, driven by Beauty Reimagined [ELC’s transformation plan]ELC CEO and President Stéphane de La Faverie said during the company’s earnings call. “For the first nine months of fiscal 2026, organic fragrance sales grew by double digits, with three-quarters of regions achieving growth, led by high-single-digit growth in mainland China, where we outperformed premium beauty brands and gained market share.”
ELC is implementing its “Beautiful Reimagining” plan, due to be implemented in February 2025, and current returns are prompting the group to upgrade its full-year outlook to about 300 basis points. De La Faverie added that the year ahead was “critical”. The business aims to return to organic sales growth after a period of decline while expanding adjusted operating margin for the first time in four years amid signs of recovery.
Fragrance had the largest sales growth in the third quarter, rising 10% across all geographic regions to $628 million. Leading brands in this category include Le Labo, Kilian Paris, Balmain Beauty and Tom Ford. ELC’s other categories, including skin care, hair care and makeup, remained flat.
By region, ELC reported retail sales in mainland China increased 6%, driven by the timing of local government subsidy confirmations. Sales in the EMEA region, which includes Europe, the UK, Ireland and emerging markets, also rose 3%, while sales in Asia Pacific fell 1% in the third quarter and were flat in the Americas.
Looking ahead to fiscal 2027, the company said it is confident of improving its growth trajectory. “Our preliminary view is that despite the uncertain geopolitical and macroeconomic environment, organic sales growth will accelerate and adjusted operating margin will improve to close to 13%,” de La Faverie said.
As for ELC’s potential merger with Puig, the company did not comment on the deal. Earlier this week, the Spanish conglomerate said that “no final decision has been made. Unless an agreement is reached, no guarantees can be made about the deal or terms.”
