Estée Lauder Companies (ELC) is on a recovery course. Organic net sales rose 4% to $4.16 billion in the second quarter of fiscal 2026, ended December 31, 2025. Shares rose 3% in Thursday morning trading.
“We delivered excellent second-quarter results to solidify a strong first half of fiscal 2026,” said ELC CEO and president Stéphane de La Faverie. “In this pivotal year, [ELC’s transformation plan] Beauty Reimagined has invigorated our business, as we execute the biggest operational, leadership, and cultural transformation in our history.”
The company has been following its Beauty Reimagined strategy since February 2025, but it has taken time to bear fruit. ELC reported an 8% drop for the 2025 fiscal year, ended June 30, with declines across all geographies.
The tide might be turning. Skincare and fragrance saw the biggest sales growth in the second quarter, up 6% to $2 billion, thanks to La Mer, Tom Ford, and Le Labo. Haircare sales rose 5% to $812 million, while the makeup category, which has remained low for two consecutive quarters, decreased 1% to $1.1 billion. The conglomerate shared that to counteract slow makeup sales, it is introducing Mac Cosmetics to select Sephora stores across the US in March.
By region, ELC reported retail sales growth of 13% in Mainland China, driven by increases across all categories. La Mer, Tom Ford, and Le Labo were standouts in the region, according to the company. The beauty group also noted that it had gained market share in Mainland China, across both its bricks-and-mortar and online businesses.
Asia-Pacific sales rose 2% in Q2, and Japan witnessed particular traction in makeup, marked by strength in Mac Cosmetics and Bobbi Brown. Also in Japan, the fragrance category saw success through Le Labo, Kilian Paris, and Editions de Parfums Frédéric Malle.
The Americas saw sales growth of 1%, led by prestige beauty and brands including Clinique and The Ordinary. In makeup and fragrance, Estée Lauder and Le Labo showed signs of success in the US, with sales of the latter rising mid-single digits, thanks to its direct-to-consumer (DTC) channel.
Looking ahead, the company said it is investing in its longevity portfolio, with age-reversal technology from Estée Lauder, La Mer, and The Ordinary.
This is part of the bigger plan, helping to further progress toward positive growth for fiscal 2026. “On its one-year anniversary, we raise our fiscal 2026 outlook confident in the strength of our turnaround, even as our second half reflects previously expected headwinds and now-greater consumer-facing investments, as we expect to restore organic sales growth and expand our operating margin for the first time in four years,” said de La Faverie.
