Estée Lauder lifts restructuring costs to $1.75 billion as point-of-sale cuts deepen

The Estée Lauder Companies has updated the cumulative cost of its multi-year restructuring programme to approximately $1.748 billion before tax, above its prior estimate of $1.5 billion to $1.7 billion, as the beauty group continues to reshape its operating model and retail selling approach.

The revised figure covers initiatives approved since the restructuring programme began and through 30 June 2026.

The increase reflects additional approved actions, including further workforce reductions, with cuts to point-of-sale demonstration roles among those announced, according to Bloomberg.

The company expanded its planned net role reductions to 9,000 to 10,000 positions globally, up from an earlier range of 5,800 to 7,000. More than 70% of the increase was linked to point-of-sale roles at select unproductive doors across department store and freestanding store channels.

The Estée Lauder Companies said actions under the plan "are still expected to be substantially completed in fiscal 2027, with a majority of the full run-rate benefits still expected to be realised during fiscal 2027".

The Profit Recovery and Growth Plan was launched in November 2023, with an initial restructuring charge estimate of $500 million to $700 million before tax. The company expanded the programme in February 2025, raising expected charges to $1.2 billion to $1.6 billion. The latest July update marks the third upward revision.

Beyond workforce reductions, the programme spans four initiative categories: value chain optimisation, enabling function reinvention, go-to-market model acceleration and digital organisation transformation.

President and CEO Stéphane de La Faverie said in May that fiscal 2026 was "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".

The company expects full-year fiscal 2026 organic net sales growth to come in at the upper end of its 1-3% range, with an adjusted operating margin of 10.7-11%. An unfavourable tariff impact of about $100 million is expected for the fiscal year.