Estée Lauder Reports on a Closed Fiscal Year Wednesday, But the Number That Matters Is Fiscal 2027

by Leah Avraham · August 16, 2026

Previews Correspondent, Earnings Dispatch

The Estée Lauder Companies will publish fiscal 2026 fourth-quarter and full-year results on Wednesday, August 19, and hold a webcast discussion at 8:30 a.m. Eastern Time. That is the company's own schedule, set out in an announcement issued through Business Wire on August 5 and posted to its investor relations site, which names Stéphane de La Faverie, president and chief executive, and Akhil Shrivastava, executive vice president and chief financial officer, as the presenters. The notice says the discussion will cover fourth-quarter and full-year results together with future prospects and recent corporate developments, and that a live and archived webcast will be available at elcompanies.com/investors.

Because Estée Lauder's fiscal year ends June 30, Wednesday is a year-end report rather than an ordinary quarter. The consequence is that the fiscal 2027 outlook, not the June quarter, is the substance of the release. The company has already put a marker down: at the fiscal third-quarter report on May 1 it published what it explicitly called its preliminary view on full-year fiscal 2027, and management told the call it would share a more complete view in August alongside the fiscal 2026 full-year results. Wednesday is when a preliminary view is expected to become guidance.

One published calendar figure is worth pinning down before anything else. Zacks puts the fiscal fourth-quarter consensus at 32 cents a share -- a mark it says rose by a penny in the seven days before publication -- against 9 cents in the year-ago quarter, with a revenue consensus of $3.55 billion, or 4.1 percent growth. Zacks does not label that 32 cents as GAAP or adjusted in the item itself, and at this company the distinction is not cosmetic.

The company's own guidance settles it. Estée Lauder's May 1 release, filed with the Securities and Exchange Commission as Exhibit 99.1, forecast full-year fiscal 2026 diluted net earnings per common share of $0.69 to $0.83 on a GAAP basis and $2.35 to $2.45 on an adjusted basis, with adjusted constant-currency diluted EPS of $2.33 to $2.43. Through the nine months ended March 31, the company had reported GAAP diluted EPS of $0.82 and adjusted diluted EPS of $2.12. Subtracting the nine-month figures from the full-year ranges leaves an implied fourth quarter of roughly $0.23 to $0.33 on an adjusted diluted basis, and roughly a 13-cent loss to a one-cent profit on a GAAP diluted basis. Quarterly per-share figures do not sum precisely to a full year, because the diluted share count moves and each line is rounded, so those implied numbers are approximations rather than company guidance. But they are enough to place the 32-cent consensus firmly among the adjusted figures, near the top of the implied adjusted range, and to make clear that the GAAP fourth quarter guided by the company is somewhere around breakeven.

The gap between those two presentations is the restructuring. Estée Lauder is running the restructuring component of what it calls the Profit Recovery and Growth Plan, and in the May release it widened both sides of the programme. Total restructuring and other charges before taxes are now expected to be $1.5 billion to $1.7 billion, up from a prior $1.2 billion to $1.6 billion. Expected annual gross benefits were raised to $1.0 billion to $1.2 billion from $0.8 billion to $1.0 billion. The net position reduction was raised to 9,000 to 10,000 from 5,800 to 7,000, with the company attributing more than 70 percent of that increase to the elimination of point-of-sale demonstration roles.

The timetable matters for what Wednesday can confirm. The company said approvals for specific initiatives under the restructuring programme were still expected to be completed by the end of fiscal 2026 -- the year that closed on June 30 -- with the actions themselves substantially completed in fiscal 2027 and the vast majority of full run-rate benefits landing in fiscal 2027. Through March 31, the filed release states, cumulative charges recognised under the restructuring component of the plan stood at $1.1 billion, with $0.2 billion booked in the third quarter and $0.5 billion across the nine months. Against a $1.5 billion to $1.7 billion programme total, that leaves a meaningful balance still to be recognised, and whether approvals in fact closed out by June 30 is a specific, checkable claim in Wednesday's release.

On the quarter just past for which figures exist, the third quarter ended March 31, net sales were $3.712 billion, up 5 percent as reported and up 2 percent on an organic basis. GAAP diluted EPS was $0.24; adjusted diluted EPS was $0.91, which the company put at 40 percent higher year on year. Reported operating income was $249 million, a 6.7 percent reported operating margin, while adjusted operating income was $557 million, a 15.0 percent adjusted operating margin that the company said was 360 basis points higher than a year earlier.

The three-percentage-point wedge between that 5 percent reported growth and 2 percent organic growth is worth reading carefully, because it runs the opposite way to the instinctive reading. The company's own reconciliation prints the quarter as "As Reported" 5 percent, "Impact of foreign currency translation" (3) percent, and "Organic" 2 percent. Those three lines add downward -- 5 minus 3 is 2 -- so the parenthesis marks an amount being taken out of reported growth to arrive at organic, not a headwind being added back. Organic net sales exclude the impact of currency translation. Reported growth came in above organic growth, which means currency translation flattered the reported line in the March quarter rather than depressing it. The company's guidance corroborates the direction: full-year adjusted diluted EPS of $2.35 to $2.45 sits two cents above the adjusted constant-currency range of $2.33 to $2.43, a currency benefit rather than a currency drag. For the nine months the same table prints 5 percent as reported, (2) percent for translation and 3 percent organic -- a two-point wedge running the same way.

That is directly relevant to Wednesday, because the preliminary fiscal 2027 view assumes no impact from foreign currency translation at all, struck on the spot rates the company disclosed in May -- 1.171 to the euro, 1.351 to sterling, 6.828 to the renminbi and 1,479 to the Korean won. If that assumption is carried into formal guidance, a tailwind that has been running through fiscal 2026 is assumed to go to zero, and reported and organic growth converge. The preliminary view says as much in its own construction: as reported and organic net sales growth are both put in a 3 percent to 5 percent range.

The rest of the preliminary fiscal 2027 view, as printed, is that global prestige beauty growth accelerates and an "Adjusted operating margin of 12.5% to 13.0%, excluding potential tariff refunds." The share-gain language is not a separate item; it is attached to the growth bullet itself, which reads in full "As Reported and Organic net sales growth to range between 3% to 5%, with share gains for the Company at the mid- to high-end." It also assumes no business disruptions from the conflict in the Middle East and no deterioration in the geopolitical landscape or related impacts, including tariffs and consumer sentiment. Each of those is a stated assumption rather than a forecast of conditions, and each is a place where Wednesday's formal guidance can differ from the May sketch.

The composition beneath the top line is where the argument sits. In the March quarter, by geographic region as the company reports them, the Americas produced $1,076 million of net sales, up 1 percent reported and flat organically, with regional operating income of $21 million against $67 million a year earlier. Europe, the Middle East and Africa produced $859 million, up 9 percent reported and 3 percent organic, with regional operating income of $32 million against $28 million. Asia/Pacific produced $1,003 million, flat as reported and down 1 percent organically, with regional operating income of $261 million against $232 million. Mainland China, which the company reports as a separate region, produced $774 million, up 11 percent reported and 6 percent organic, with regional operating income of $159 million against $76 million. Those regional operating figures are struck before items the company does not allocate to regions, which is why they total $473 million while consolidated reported operating income for the quarter was $249 million.

By product category in the same quarter, skin care was $1,856 million, up 3 percent reported, with organic growth rounding to nil in the company's table; makeup was $1,072 million, up 4 percent reported and likewise nil organically; fragrance was $628 million, up 13 percent reported and 10 percent organic; hair care was $128 million, up 2 percent reported and nil organically; and the residual category was $28 million, up 12 percent on both bases. In other words, essentially all of the quarter's organic growth came from fragrance, and skin care -- by far the largest category -- did not grow organically.

On the call, management said Estée Lauder estimated it had outperformed prestige beauty in mainland China for a third consecutive quarter on high-single-digit retail sales growth, and that in Hainan travel retail it had significantly outperformed prestige beauty, with retail sales rising at a strong double-digit rate after a high-single-digit second quarter. Looking ahead to fiscal 2027 specifically, management said it expected retail sales growth from the China ecosystem, including travel retail, to improve to a mid-single-digit rate. Those are the company's characterisations of retail sales, which are not the same measure as the net sales it books, and the third-quarter regional tables show the distinction plainly: mainland China grew 6 percent organically while Asia/Pacific outside it went backwards by 1 percent.

Two external exposures are quantified and two are not. On tariffs, the company said it continued to expect tariff-related headwinds to affect fiscal 2026 profitability by approximately $100 million, that its own actions were offsetting more than half of the expected impact, and that tariff rate reductions in the second half of fiscal 2026 were not expected to benefit fiscal 2026, because capitalised tariff costs sit in inventory for roughly six months before flowing through. On the Middle East, the company assumed a dilutive impact of $0.07 to full-year fiscal 2026 diluted EPS, and for the fourth quarter specifically an unfavourable impact of approximately 2 percent to sales growth and $0.06 of dilution -- a larger hit than the third quarter, which it said had benefited from shipments for key shopping moments made before the onset of the conflict. Neither the fiscal 2027 tariff exposure nor the phrase "potential tariff refunds" in the margin assumption has been quantified by the company.

The comparison base is unusually soft. In the fourth quarter of fiscal 2025, net sales were $3,411 million, down 12 percent reported and 13 percent organic, with a GAAP diluted loss per share of $1.51 and adjusted diluted EPS of $0.09. For full-year fiscal 2025 the company reported net sales of $14,326 million, a GAAP diluted loss per share of $3.15, adjusted diluted EPS of $1.51 and an adjusted operating margin of 8.0 percent. Set against the fiscal 2026 adjusted operating margin guidance of 10.7 percent to 11.0 percent, that implies expansion of roughly 270 to 300 basis points, which is what de La Faverie was describing in May when he said, "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."

His framing of what comes next was explicit about its own limits. "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," he said in the May release. "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."

So the checkable questions going into Wednesday are narrow and specific. Whether full-year organic net sales growth landed at the approximately 3 percent the company guided in May, at the high end of its earlier 1 to 3 percent range. Whether full-year adjusted diluted EPS fell inside $2.35 to $2.45 and GAAP diluted EPS inside $0.69 to $0.83, and where in those ranges. Whether the fiscal 2027 preliminary view of 3 to 5 percent organic growth and a 12.5 to 13.0 percent adjusted operating margin survives contact with formal guidance, and on what currency and tariff assumptions. Whether restructuring approvals closed by June 30 as stated, and how much of the $1.5 billion to $1.7 billion charge remains after the $1.1 billion recognised through March. And whether the organic-growth base broadens beyond fragrance -- the company's other assumptions rest on a return to growth in skin care that its March-quarter table did not yet show. The company ended March with $3,126 million of cash and cash equivalents against total debt of $7,312 million, comprising $502 million current and $6,810 million long-term.