Estée Lauder CEO Stéphane de La Faverie has overseen the company’s return to sales growth in fiscal 2026, alongside wider margins and a major operating reset. The results offer an early test of Beauty Reimagined, the strategy reshaping product priorities, distribution, spending and the company’s cost structure.
Key Takeaways
- Estée Lauder reported fiscal 2026 net sales of $15.05 billion, up 5%, while organic net sales increased 3%.
- Adjusted operating margin rose to 11.2% from 8.0% a year earlier, while gross margin increased to 75.5%.
- Fragrance led product-category growth with a 10% organic sales increase, followed by 4% growth in skin care.
- Estée Lauder expects its restructuring program to result in a net reduction of about 10,000 positions and approximately $1.2 billion in annual gross benefits once approved actions are fully implemented.
- For fiscal 2027, the company is forecasting organic sales growth of 3% to 5% and an adjusted operating margin of 12.7% to 13.5%.
Estée Lauder CEO Strategy Centers on Beauty Reimagined
Estée Lauder CEO Stéphane de La Faverie entered fiscal 2026 with the company working to restore sales growth, improve profitability and simplify how its global brand portfolio operates. The latest full-year results provide the clearest evidence so far of how that reset is progressing.
The Estée Lauder Companies reported net sales of $15.05 billion for the fiscal year ended June 30, 2026, up 5% from $14.33 billion a year earlier. Organic net sales, which exclude certain currency and restructuring effects, increased 3%. The fiscal fourth quarter delivered organic growth of 5%, marking the company’s fourth consecutive quarter of organic sales growth.
“We reignited growth with organic sales rising 3%,” de La Faverie said when the company released its results on August 19.
De La Faverie became president and CEO in January 2025 after joining Estée Lauder in 2011 and holding a series of senior brand and group leadership roles. His Beauty Reimagined strategy focuses on expanding consumer reach, accelerating product development, increasing consumer-facing activity and simplifying the company’s operating model.
The strategy has unfolded during a broader period of change across the prestige beauty sector. Estée Lauder had also been evaluating its portfolio and operating structure while dealing with uneven performance across regions, categories and travel retail.
Rather than relying on one product line to support the recovery, the company has directed attention toward a mix of product launches, stronger-performing brands, wider distribution and cost controls. That approach became more visible during fiscal 2026 as sales increased across every geographic region.
Fragrance and Skin Care Lead the Sales Recovery
Fragrance produced the strongest category performance during fiscal 2026, with organic net sales increasing 10%. Estée Lauder attributed the increase primarily to its luxury fragrance brands, led by Le Labo, TOM FORD and KILIAN PARIS.
Skin care organic sales increased 4%, supported by La Mer, The Ordinary and the Estée Lauder brand. The company said existing franchises including Advanced Night Repair and Revitalizing Supreme+ contributed to the namesake brand’s performance alongside newer products.
Makeup remained more mixed. Organic sales were approximately flat for the year, although M·A·C and TOM FORD posted growth that helped offset declines at Bobbi Brown and Too Faced. M·A·C also expanded into select U.S. Sephora stores, Sephora’s website and Sephora at Kohl’s in March 2026.
The wider distribution strategy reflects how beauty companies are responding to shifting shopping patterns and increased competition for consumer attention. The relationship between consumer data, merchandising and retail growth in beauty has become increasingly relevant as brands seek stronger placement across specialty retail, digital channels and other points of sale.
Estée Lauder expanded its own reach during the fiscal year. By June 2026, the company said 13 of its brands were available through Amazon across 11 markets, while 12 brands were present on TikTok Shop in nine markets. It also opened 33 net new freestanding fragrance stores globally, led by Le Labo and Jo Malone London.
Geographic performance also became more balanced. Organic sales grew across all regions, while mainland China posted high-single-digit growth. The company reported U.S. volume-share gains for the fiscal fourth quarter and full year, with all categories contributing to the full-year result.
Wider Margins Accompany a Large Operating Reset
The turnaround is not limited to sales. Estée Lauder reported adjusted operating income of $1.69 billion for fiscal 2026, up 47% from $1.15 billion the previous year. Adjusted operating margin rose 320 basis points to 11.2%, compared with 8.0% in fiscal 2025.
Gross margin increased to 75.5% from 74.0%. The company attributed part of the improvement to benefits from its Profit Recovery and Growth Plan, including procurement changes, operating efficiencies and lower costs related to excess and obsolete inventory.
At the same time, Estée Lauder said consumer-facing spending increased 7% on a reported basis for the full fiscal year. The combination illustrates a central element of the company’s current strategy: reduce costs in selected areas while directing more resources toward advertising, retail activity, product launches and consumer acquisition.
The restructuring carries a significant workforce impact. Estée Lauder now expects the approved program to result in a final net reduction of approximately 10,000 positions, at the upper end of its previously announced range. The company expects the program to generate about $1.2 billion in annual gross benefits once the approved measures are fully implemented.
Reported operating income was $780 million in fiscal 2026, compared with an operating loss of $785 million in fiscal 2025. The comparison requires context because the prior year included $1.29 billion in goodwill and other intangible asset impairments as well as $159 million in charges connected with talcum litigation settlement agreements.
That distinction makes the adjusted figures more useful for evaluating changes in the underlying business. The improvement in sales and adjusted margins shows progress, but performance remains uneven across categories. Makeup was approximately flat organically, hair care declined 1%, and restructuring actions continue to affect the organization.
Estée Lauder has set another measurable benchmark for fiscal 2027. The company expects organic sales growth of 3% to 5% and an adjusted operating margin of 12.7% to 13.5%, up from its earlier preliminary margin range of 12.5% to 13.0%. It also expects continued growth in fragrance and skin care and a return to full-year growth in makeup.
For the Estée Lauder CEO strategy, fiscal 2026 represents a shift from recovery planning toward measurable execution. The latest results show higher sales and margins, but the next test will be whether the company can sustain that progress while extending growth more evenly across categories and regions.
Frequently Asked Questions
Who is the CEO of Estée Lauder?
Stéphane de La Faverie is president and CEO of The Estée Lauder Companies and a member of its board of directors. He assumed the role in January 2025 after holding several senior leadership positions within the company.
What is the Estée Lauder CEO turnaround strategy?
The Estée Lauder CEO strategy is centered on Beauty Reimagined, which focuses on expanding consumer reach, accelerating product development, increasing consumer-facing activity and simplifying operations. It operates alongside the company’s Profit Recovery and Growth Plan.
How much did Estée Lauder sales grow in fiscal 2026?
Reported net sales increased 5% to $15.05 billion for the year ended June 30, 2026. Organic net sales increased 3%, while fourth-quarter organic sales rose 5%.
Which Estée Lauder categories grew the fastest?
Fragrance recorded the highest organic growth at 10%, led by brands including Le Labo, TOM FORD and KILIAN PARIS. Skin care increased 4%, while makeup was approximately flat and hair care declined 1%.
What is Estée Lauder forecasting for fiscal 2027?
The company expects organic net sales to increase between 3% and 5% in fiscal 2027. It is also forecasting an adjusted operating margin of 12.7% to 13.5%, subject to the assumptions outlined in its guidance.
