Estee Lauder Q3 EPS beats; ups FY view; raises job cut plan to up to 10,000

Overview

• Beauty products maker's fiscal Q3 net sales slightly beat analyst expectations, up 5% yr/yr

• Adjusted EPS for fiscal Q3 beat consensus, rising 40% yr/yr

• Company expands restructuring plan to 9,000-10,000 job cuts, vs 5,800-7,000 earlier; also expects to take higher charges on plan and see bigger benefits

Outlook

• Company raises fiscal 2026 organic net sales growth outlook to about 3%, high end of prior range

• Estee Lauder sees fiscal 2026 adjusted operating margin of 10.7% to 11.0%

• Company expects fiscal 2026 adjusted diluted EPS of $2.35 to $2.45

Result Drivers

• FRAGRANCE GROWTH - Double-digit net sales growth in fragrance, led by luxury brands such as Le Labo, KILIAN PARIS, BALMAIN Beauty and TOM FORD, drove Q3 results

• MAINLAND CHINA STRENGTH - Net sales in Mainland China grew high single digits, outpacing prestige beauty and supported by increased consumer-facing investments and new product launches

• COST EFFICIENCY & PRGP - Adjusted gross and operating margin expansion was driven by the Profit Recovery and Growth Plan, which reduced non-consumer-facing expenses and improved cost leverage

Company press release: ID:nBwbnMvXpa

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 15 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the personal products peer group is "hold."

• Wall Street's median 12-month price target for Estee Lauder Companies Inc is $88.50, about 15.4% above its April 30 closing price of $76.71

• The stock recently traded at 26 times the next 12-month earnings vs. a P/E of 43 three months ago

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