The Tamesis
The Estée Lauder Companies (ELC) is recovering. Organic net sales increased 4% to $4.16 billion in the second quarter of fiscal 2026, which ended December 31, 2025. Shares were up 3% in early trading Thursday.
“Our second quarter results were outstanding, building on the strong performance in the first half of fiscal 2026,” said Stéphane de La Faverie, CEO and President of ELC. “In this critical year, [ELC’s transformation plan] Beauty Reimagined energized our business and we executed the largest operational, leadership and cultural transformation in our history. “
The company has been following the “Beauty Reinvention” strategy since February 2025, but it has taken some time to bear fruit. ELC reported an 8% decline to $14.3 million in fiscal 2025, which ended June 30, with declines in all regions.
The tide may be turning. Skin care and fragrances saw the biggest sales growth in the second quarter, rising 6% to $2 billion, thanks to La Mer, Tom Ford and Le Labo. Sales in the hair care category increased 5% to $812 million, while sales in the cosmetics category, which has remained low for two consecutive quarters, fell 1% to $1.1 billion. The group said it would launch Mac Cosmetics in some U.S. Sephora stores in March in response to slowing cosmetics sales.
By region, ELC reported a 13% increase in retail sales in mainland China, driven by growth across all categories. According to the company, La Mer, Tom Ford and Le Labo are the leaders in the region. The beauty group also noted that it has gained market share in both its physical stores and online businesses in mainland China.
Sales in the Asia-Pacific region increased by 2% in the second quarter, with Japan’s cosmetics market particularly eye-catching, especially the strong performance of Mac Cosmetics and Bobbi Brown. Also in Japan, the fragrance category enjoyed success with Le Labo, Kilian Paris and Editions de Parfums Frédéric Malle.
Sales in the Americas region rose 1%, with growth driven by established beauty brands and brands such as Clinique and The Ordinary. In cosmetics and fragrance, Estée Lauder and Le Labo showed signs of success in the US, with the latter growing sales by mid-single digits thanks to its direct-to-consumer (DTC) channel.
Going forward, the company said it is investing in its longevity portfolio, which includes age-reversal technology from Estée Lauder, La Mer and The Ordinary.
This is part of a larger plan to help further achieve positive growth in fiscal 2026. “On its one-year anniversary, we have raised our outlook for fiscal 2026, confident in our turnaround, despite the second half reflecting previously expected headwinds and now greater consumer-facing investments, as we expect to return to organic sales growth and expand our operating margin for the first time in four years,” de La Faverie said.
