Estée Lauder raises outlook as skincare and fragrance boost golden quarter sales

The Estée Lauder Companies reported a 4% increase in organic net sales to $4.2 billion (£3 billion) for the second quarter ended 31 December 2025, with growth in skincare and fragrance offsetting declines in makeup.

The company achieved gains in the prestige beauty segment across key markets, including Mainland China, Japan, the US, and Western Europe, with notable improvements in fragrance sales in France, Spain, and the UK.

Skincare net sales increased 6% to $2 billion (£1.4 billion), primarily driven by growth from La Mer, Estée Lauder and The Ordinary.

La Mer and Estée Lauder benefited from "strong" performance during key shopping periods and the holiday season, while The Ordinary experienced growth through expanded consumer reach, broader distribution, and targeted consumer activations.

Fragrance net sales rose 6% to $812 million (£596 million), led by high-single-digit growth from the company’s luxury brands across all regions.

Tom Ford growth was supported by product innovation, Le Labo growth was driven by the Classic Collection, and Kilian Paris benefited from existing products, new launches, and broader consumer access.

Haircare also returned to growth, with net sales up 5% to $168 million (£123 million), supported by distribution expansion and The Ordinary’s Multi-Peptide Serum for Hair Density.

However, makeup net sales declined 1% to $1.16 billion (£852.4 million), primarily due to Estée Lauder, largely as a result of an accrual for estimated returns of the existing Double Wear Stay-in-Place Long Wear Matte Foundation ahead of the launch of its new Double Wear matte innovation. Despite this, MAC Cosmetics net sales increased during the quarter.

Looking ahead, the company has raised its full-year outlook, reflecting first-half performance while remaining cautious amid macroeconomic uncertainty and ongoing headwinds in parts of its business.

Organic net sales are expected to grow 1-3% for the full year. At the midpoint, growth is anticipated across most regions, led by mid-single-digit growth in Mainland China, while The Americas is expected to remain flat.

Meanwhile, the second-half outlook anticipates low-single-digit growth, with higher growth in the fourth quarter compared to the third.

Stéphane de La Faverie, President and CEO of The Estée Lauder Companies, said: "We delivered excellent second quarter results to solidify a strong first half of fiscal 2026. In this pivotal year, Beauty Reimagined has invigorated our business as we execute the biggest operational, leadership, and cultural transformation in our history.

"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."