Shares of Estée Lauder (EL +17.90%) leaped on Wednesday after the skincare, makeup, and fragrance purveyor highlighted the progress of its turnaround strategy.
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Accelerating growth
Estée Lauder's net sales grew 6% year over year to $3.6 billion in its fiscal 2026 fourth quarter, which ended on June 30.
The gains were broad-based. The cosmetics supplier saw growth in all its major geographic regions, including key markets in China, Japan, Korea, Western Europe, and the U.S.
Estée Lauder is also expanding its presence on e-commerce sites and social media platforms, such as TikTok.
"We ended the year on a high note, as organic sales growth accelerated to 5% for our fourth consecutive quarter of growth and stronger profitability," CEO Stéphane de La Faverie said.
NYSE: EL
Key Data Points
Estée Lauder's profit recovery plan is bearing fruit. The company's restructuring efforts helped to boost its full-year gross margin and adjusted operating margin by 1.5 and 3.2 percentage points, respectively, in fiscal 2026.
All told, Estée Lauder's fourth-quarter adjusted earnings per share checked in at $0.39, up from $0.09 in the year-ago period. That topped Wall Street's estimates, which called for per-share profits of $0.32.
Profit margins should continue to improve
Looking ahead to fiscal 2027, Estée Lauder projects full-year organic net sales growth of 3% to 5%.
Management also raised its adjusted operating margin target range to 12.7%-13.5%, up from a prior forecast of 12.5%-13%.
