Estée Lauder expects $100 million in tariff headwinds

Estée Lauder said Thursday it’s expecting a $100 million hit to its full-year profitability because of tariff impacts.

The beauty company’s stock tumbled more than 20% in midday trading.

The company is currently in the midst of a turnaround plan, dubbed “Beauty Reimagined,” that’s expected to cost between $1.2 billion and $1.6 billion and is aimed at revitalizing its growth. In its second-quarter earnings report on Thursday, the company said it still expects net workforce reductions of 5,800 to 7,000 as part of its restructuring.

Estée Lauder said it has been “actively evaluating developments and mitigation strategies” to reduce tariff impacts. The company said it has leveraged trade programs, optimized its regional manufacturing footprint and increased supply chain agility, all of which have offset more than half of the expected impacts.

The company said it expects tariff headwinds to impact profitability mostly in the second half. It also identified assumed tariff rates in Switzerland, Canada, China, Mexico, the European Union and Japan, where it has a facility, as part of its calculation.

Still, Estée Lauder said it continues to monitor the active tariff situations and is working to implement further strategies to offset those costs even more, including “potential pricing actions.”

The company also said it was raising its fiscal outlook after solid performance in the first half of the year, though it said it would remain cautious about the macroeconomic environment.

“In this pivotal year, Beauty Reimagined has invigorated our business as we execute the biggest operational, leadership, and cultural transformation in our history,” CEO Stéphane de La Faveri said in a statement. “On its one-year anniversary, we raise our fiscal 2026 outlook confident in the strength of our turnaround, even as our second half reflects previously-expected headwinds and now-greater consumer-facing investments, as we expect to restore organic sales growth and expand our operating margin for the first time in four years.”