The Estée Lauder Companies Inc. (ELC) reported its financial results for the third quarter ended March 31, 2026.

Stéphane de La Faverie, President and CEO, said, 

“Our third quarter results extend strong year-to-date performance, driven by Beauty Reimagined. In the first nine months of fiscal 2026, organic sales for Fragrance rose double-digits, while three of four regions grew, led by high single-digit growth in Mainland China, where we outperformed prestige beauty to gain share.” 

As reported in Q3, net sales increased 5% to $3.7 billion. Organic net sales increased by 2%.

The execution of ELC’s Beauty Reimagined plan is also on track, with PRGP ahead of expectations.

De La Faverie added,

“With momentum across all five action plan priorities of Beauty Reimagined, today we raised our fiscal 2026 outlook, now expecting organic sales growth at the high-end of the prior range and adjusted operating margin expansion to approach 300 basis points, bolstered in part by adjusted gross margin expansion.”

Results by Category

Skin Care net sales were virtually flat, primarily driven by growth from La Mer and The Ordinary, partially offset by declines from Clinique and Origins.  Operating income in the Skin Care division increased.

Makeup net sales were virtually flat, primarily driven by growth from Estée Lauder and partially offset by declines from Clinique and Too Faced. 

Operating results in Makeup declined to a loss from income in the prior-year period. However, overall operating income increased.

Fragrance net sales increased 10%, driven by double-digit growth from ELC’s Luxury Brands, which grew across all geographic regions. Growth was led by Le Labo, Kilian Paris, Balmain Beauty, and Tom Ford.

Overall, fragrance operating income increased modestly.

Hair Care net sales were flat, primarily due to growth from The Ordinary, reflecting the success of Multi-Peptide Serum for Hair Density and distribution expansion, offset by declines from Bumble and bumble and Le Labo.

Hair Care operating results improved but remained in a loss position. 

de La Faverie concluded, 

“Fiscal 2026 is promising to be the pivotal year we intended, one in which we restore organic sales growth and expand our adjusted operating margin for the first time in four years. Looking ahead to fiscal 2027, we are confident in our improving trajectory and realizing the benefits of One ELC, especially its One Operating Ecosystem which will be fully deployed. Our preliminary view is to accelerate organic sales growth and for adjusted operating margin to approach 13%, albeit in an uncertain geopolitical and macroeconomic environment.”

Results by Region

In Mainland China, operating income increased. Growth was driven by higher net sales and a favorable year-over-year impact associated with the timing of recognition of local government subsidies. This was partially offset by increased consumer-facing investments to support key activations, new product launches, and targeted expanded consumer reach.

Operating income in the Asia/Pacific increased, primarily due to higher gross profit and lower non-consumer-facing expenses. These impacts were partially offset by higher consumer-facing investments to support key activations and new product launches.

EUKEM’s operating income increased, primarily due to higher gross profit driven by the increase in net sales. This was partially offset by the increase in non-consumer-facing expenses and increased consumer-facing investments to drive sales growth. 

In the Americas, operating income decreased, including the unfavorable impact of an $84 million loss contingency associated with a potential settlement of a securities class action recorded in Q3 fiscal 2026. 

Excluding this impact, operating income increased, reflecting net benefits from the PRG, which helped to reduce non-consumer-facing expenses, as well as higher reported net sales.