Estée Lauder (EL) Stock Jumps 13% as Earnings and Guidance Both Surprise

TLDR

• Estée Lauder beat Q3 earnings estimates, posting adjusted EPS of $0.91 vs. the $0.65 consensus
• Revenue came in at $3.71 billion, up 5% year-over-year
• Full-year adjusted EPS guidance raised to $2.35–$2.45, above the $2.22 consensus
• The company plans to cut up to 3,000 more jobs, bringing total reductions to 9,000–10,000 positions
• EL stock jumped around 13% in premarket trading on Friday

Estée Lauder stock jumped roughly 13% in premarket trading on Friday after the company posted better-than-expected third-quarter results and raised its full-year outlook.

The Estée Lauder Companies Inc., EL

Adjusted EPS came in at $0.91, well ahead of the $0.65 analyst consensus. Revenue hit $3.71 billion, beating estimates of $3.69 billion and up 5% from $3.55 billion a year ago. Organic net sales grew 2% year-over-year.

The earnings beat was driven by strong performance in fragrance, with organic net sales in that category growing 10%. Luxury brands including Le Labo, KILIAN PARIS, BALMAIN Beauty, and TOM FORD all posted double-digit gains.

Skin care net sales were roughly flat, and both makeup and hair care saw flat organic growth for the quarter.

Mainland China a Bright Spot

Geographically, Mainland China delivered 6% organic growth. It was the third consecutive quarter where Estée Lauder outperformed the prestige beauty market there.

Priority Emerging Markets also posted double-digit growth, while three of the company’s four regions grew overall.

Adjusted operating margin expanded 360 basis points to 15.0%, up from 11.4% in the prior-year period. Adjusted gross margin improved 140 basis points to 76.4%.

Analysts at Vital Knowledge pointed to operating margins as the standout in the report, calling out aggressive cost-cutting as a key driver.

Job Cuts and Restructuring

Along with the earnings release, Estée Lauder announced plans to cut up to 3,000 more jobs globally. That brings the total planned reduction to between 9,000 and 10,000 positions, up from a previous estimate of up to 7,000.

At the top of that range, the cuts would represent around 17.5% of its total workforce of 57,000 as of June 2025.

More than 70% of the additional cuts will come from reducing department store staff, as the company shifts focus toward digital and specialty retail channels including Ulta, Sephora, Amazon, and TikTok Shop.

The company aims to save as much as $1.2 billion in costs through the restructuring effort.

CEO Stéphane de La Faverie credited the “Beauty Reimagined” strategy for the quarterly improvement, citing stronger performance in luxury markets including China and Europe.

Estée Lauder is also in talks to merge with Puig, the owner of Jean Paul Gaultier. One analyst noted the expanded job cut target may reflect plans to shed positions on Estée Lauder’s side ahead of any potential deal.

Full-year adjusted EPS guidance was raised to $2.35–$2.45, compared with a prior forecast of $2.05–$2.25. The company also expects organic net sales to grow at the high end of its prior 1%–3% range.

For fiscal 2027, Estée Lauder issued a preliminary outlook projecting organic net sales growth of 3%–5% and an adjusted operating margin of 12.5%–13.0%.

The company noted its current forecast assumes no deterioration in the geopolitical landscape, including tariffs and consumer sentiment, and no further business disruptions in the Middle East beyond May 2026.

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