Estée Lauder has forecast stronger-than-expected annual profits, as its turnaround sees returns.
The company, which owns brands including Clinique, M.A.C, Jo Malone London and Tom Ford, expects adjusted earnings per share of between $3.10 and $3.35 for its 2027 financial year.
The midpoint of the guidance sits above Wall Street expectations of $3.18 per share, according to LSEG data, while Estée Lauder is forecasting organic sales growth of between three per cent and five per cent.
Shares in the group surged around 18 per cent in early trading on Wednesday after it also beat expectations for its fourth quarter.
Sales rose six per cent to $3.63bn in the three months to 30 June, ahead of analysts’ forecasts of $3.54bn, while adjusted earnings of 39 cents per share beat expectations of 32 cents.
The performance was fuelled by continued strength in skincare and fragrance, with fragrance sales jumping 10 per cent during the quarter as Le Labo, Tom Ford and Kilian Paris delivered double-digit growth across Estée Lauder’s luxury brands.
Meanwhile, skincare sales increased nine per cent on a reported basis, while makeup rose three per cent. Haircare slipped one per cent amid weaker sales at Aveda.
The group also enjoyed a stronger performance in mainland China, where fourth-quarter sales climbed 12 per cent on a reported basis and seven per cent organically.
Across the full year, organic sales in mainland China increased by a high-single-digit percentage, supported by new products, greater marketing investment and stronger online demand.
Estée Lauder said it had gained prestige beauty market share in mainland China during both its fourth quarter and full year, driven by fragrance, skincare and makeup.
The group has been pushing ahead with chief executive Stéphane de La Faverie’s Beauty Reimagined turnaround strategy, which includes increasing investment in product innovation and marketing, simplifying its supply chain and expanding brands into new markets and distribution channels.
De La Faverie said: “We reignited growth with organic sales rising three per cent, driven by the breadth of growth across brands, and achieved significant operating margin expansion.”
“We ended the year on a high note, as organic sales growth accelerated to five per cent for our fourth consecutive quarter of growth and stronger profitability.”
Full-year sales rose five per cent to $15.05bn, while adjusted operating profit jumped 47 per cent to $1.69bn. Adjusted earnings per share increased 66 per cent to $2.51.
Looking ahead, the beauty group expects fragrance and skincare to continue growing during its 2027 financial year, while makeup is forecast to return to growth.
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