Estée Lauder Posts Strong Q2 Growth, Raises Outlook Amid Turnaround Push

Estée Lauder Companies Inc. reported a solid second-quarter performance, signaling its ambitious turnaround plan is gaining traction in a competitive global beauty market.

For the quarter ended December 31, the company posted net sales of $4.2 billion, a 6% increase year-over-year. Organic net sales, which strip out the impact of acquisitions, divestitures, and foreign currency translation, grew 4%. Adjusted earnings per share jumped 43% to 89 cents, significantly outpacing the 62 cents reported in the prior-year period.

Encouraged by the results, management raised the lower end of its full-year net sales guidance. The company now expects sales to grow between 1% and 3%, compared to a previous range of flat to 3% growth.

"Our second-quarter results cement a strong first half for fiscal 2026," said Stéphane de La Faverie, President and Chief Executive Officer. "Beauty Reimagined is energizing our business as we undertake the most significant operational and cultural shift in our history. As this strategy marks its one-year milestone, we are raising our outlook with confidence, even as we navigate expected headwinds and ramp up consumer-facing investments. We are on track to restore organic sales growth and expand operating margin for the first time in four years."

Category performance was mixed but largely positive. The flagship skin care segment and the fragrance division both saw net sales rise 6%. Hair care sales increased 5%, while makeup experienced a slight 1% decline, reflecting shifting consumer preferences and intense category competition.

Geographically, Mainland China was a standout, delivering a second consecutive quarter of double-digit retail sales growth at 13%. The Americas region saw a more modest 1% increase. The robust performance in China is a welcome sign for the company, which has been working to recover its footing in the critical Asia-Pacific market.

The results provide early validation for the company's dual-pronged "Beauty Reimagined" and "Profit Recovery and Growth Plan," initiatives launched to streamline operations, reignite innovation, and improve profitability after a period of challenges.

Market Voices

Eleanor Vance, Retail Analyst at Sterling Insights: "This is a promising step. The raised guidance, however slight, shows management's growing confidence. The consistent double-digit growth in China is the most compelling part of the story—it suggests their brand equity and distribution strategy there are working again."

Marcus Thorne, Portfolio Manager: "The EPS beat is impressive, but let's not get carried away. A 1% lift in the Americas is anaemic. The 'turnaround' is being driven by one region. Until we see sustainable, broad-based growth across all major markets and categories, I remain cautiously sceptical."

Chloe Bennett, Beauty Blogger & Former Buyer: "Finally! Some positive news. The fragrance and skin care numbers show their product launches are resonating. As a consumer, I've noticed their marketing feels fresher. But that makeup decline is a red flag—they need a blockbuster launch to compete with the indie brands dominating social media."

David Park, Independent Brand Consultant: "This isn't a turnaround; it's a cost-cut masquerading as growth. They've squeezed margins and got a China bounce. Where's the true brand heat? 'Beauty Reimagined' sounds like corporate jargon for 'we fired people and hope you don't notice.' The 1% growth in their home market is embarrassing."