Net Sales Increase 4% for The Estée Lauder Companies in Q1 2026

The Estée Lauder Companies’ year-old “Beauty Reimagined” Strategy is paying off.

The company started fiscal year 2026 on the right foot. Net sales increased 4% from $3.3 billion the prior-year quarter to $3.48 for the quarter ending Sept. 30, 2025.

Organic net sales climbed 3% from $3.36 billion to $3.45 billion.

The Estée Lauder Companies launched “Beauty Reimagined” amid a 6% decline in net and organic sales for Q2 2025, which resulted in a flat $4.0 billion for the Happi Top 50 Company.

The bold strategic vision aimed to restore sustainable sales growth and achieve a solid double-digit adjusted operating margin over the next few years as the company aims to become a top consumer-centric prestige beauty company. With the new initiative, the company planned to create an agile operating model, while taking decisive actions to expand consumer coverage, step-change innovation and increase consumer-facing investments to better capture growth and drive profitability.

“We had a strong start to fiscal 2026 as we execute on our Beauty Reimagined strategy—returning to organic sales growth, gaining prestige beauty share in a few key strategic areas of focus, and improving profitability,” said Stéphane de La Faverie, president and CEO. “Encouragingly, we are building momentum across the organization from the significant operational changes we have executed to-date to be faster and more agile,”. “These results reinforce the confidence we have in our fiscal 2026 outlook—a pivotal year—as we restore organic sales growth and expand our operating margin for the first time in four years.”

Fragrance

Fragrance net sales increased 13%, driven by double-digit growth from the company’s Luxury Brands, which grew high-single to strong double digits across all geographic regions, led by:
Le Labo, primarily due to its Classic Collection and City Exclusives—led by the ongoing success of Another 13, Santal 33 and Gaiac 10, the Tokyo City Exclusive—as well as targeted expanded consumer reach.

Tom Ford —including its Oud Voyager and Black Orchid Reserve—created a halo effect that benefited existing product sales. Net sales also benefited from targeted expanded consumer reach.

Jo Malone London, primarily due to growth in the cologne subcategory—with continued success from Wood Sage & Sea Salt, holiday shipments of Ginger Biscuit and the launch of the limited-edition Raspberry Ripple—and benefited from targeted expanded consumer reach.

Fragrance operating income increased, primarily due to higher gross profit, partially offset by increased consumer-facing investments, including support for distribution expansion and enhancements as well as key activations.

Skin Care

Skin Care net sales increased 3%, primarily driven by growth from La Mer and Estée Lauder. The increases from both brands reflected higher net sales from the company’s Asia travel retail business, primarily driven by a low prior-year base due to a challenging retail environment—including lower conversion—as well as the Company’s prior-year efforts to improve in-trade inventory.

Net sales growth from Estée Lauder also benefited from innovation across the Revitalizing Supreme+, Re-Nutriv and Advanced Night Repair product franchises. Skin Care operating income increased, primarily due to the increase in net sales as well as net benefits from the PRGP, which helped to reduce non-consumer-facing expenses.

Makeup

Makeup net sales decreased 2%, primarily driven by Bobbi Brown. Officials said this reflects the unfavorable comparison of higher new product launch shipments in the prior year, as well as a decrease in the eye subcategory, primarily driven by the strategic decision to reduce color palettes.

Makeup operating results improved, primarily due to a favorable comparison to the prior year, which included $159 million in aggregate charges relating to the talcum litigation settlement agreements. The increase also reflects net benefits from the PRGP—which helped to reduce non-consumer-facing expenses—and lower cost of sales, primarily due to reduced promotional activity. These impacts were partially offset by increased consumer-facing investments, including activations for new product launches.

Hair Care

Hair Care net sales decreased 7%, primarily driven by Aveda, reflecting the brand’s strategies to improve long-term performance—including planned reductions in online promotional activity and the exit from underperforming doors, including some of its own freestanding stores. The decrease also reflects the brand’s continued softness in the salon channel. Collectively, these declines more than offset the benefits from the brand’s fiscal 2025 fourth-quarter launch in Amazon’s US Premium Beauty store, as well as innovation such as Miraculous Oil.

Hair Care operating results improved, reflecting net benefits from the PRGP—which helped to reduce non-consumer-facing expenses—and disciplined expense management, partially offset by the decline in net sales.

Fiscal 2026 Outlook

The company said it is continuing to closely monitor evolving trade policies and enacted tariffs, and its task force has been actively evaluating developments and mitigation strategies to reduce the potential impacts of tariffs. Officials implemented a range of actions, including leveraging available trade programs and further optimizing its regional manufacturing footprint to bring production closer to the consumer—including through its facility in Japan. These efforts, combined with increased supply chain agility, are helping to offset more than half of the expected impacts and better position the company to adapt quickly as trade policies continue to evolve.

In terms of enacted tariffs, the company’s assumption reflects the following incremental rates on its most material flow of goods:

For US imports from Switzerland a 39% rate, from Canada a 35% rate, from China a 30% rate, from Mexico a 25% rate, from both the European Union and Japan a 15% rate and from the UK a 10% rate.

For Canada imports from the US, a 25% rate, and for China imports from the US, a 10% rate.

Based on information available and net of planned mitigation actions through Oct. 24, 2025, the company continues to expect tariff-related headwinds to impact fiscal 2026 profitability by approximately $100 million.