The Estée Lauder Companies (EL) Barclays 19th Annual Global Consumer Conference summary

Strategic transformation and brand momentum

• Six brands now exceed $1 billion in sales, with The Ordinary nearing this milestone, reflecting portfolio strength and sequential organic sales improvement for most major brands in fiscal 2026.

• The new One ELC operating model has increased agility, accountability, and speed, supporting competition with indie brands and simplifying organizational structure.

• Completion of the two-year PRGP restructuring program has resulted in greater efficiency, streamlined partnerships, and improved resource allocation to consumer-facing investments.

• Reported sales rose 5%, organic sales 3%, gross margin expanded 150 bps, operating margin 320 bps, and diluted EPS grew 66% in fiscal 2026.

• Cash flow from operations increased 39% despite higher restructuring costs, supporting reinvestment and strong momentum into fiscal 2027.

Brand and geographic performance

• M·A·C reversed years of decline, returning to market share leadership in the U.S. through distribution expansion and innovation.

• KILIAN PARIS and The Ordinary demonstrated rapid growth, validating the Beauty Reimagined playbook for both large and indie brands.

• Growth is now more balanced across geographies, with China, Korea, Japan, and key European markets all showing strong momentum and diversified brand performance.

• In China, six brands achieved double-digit growth, and the R&D center in Shanghai now generates 30% of global innovation.

• North America is seeing stabilization and improvement, with a revamped sales force and expanded presence in fast-growing channels like Sephora and TikTok Shop.

Innovation, digital, and consumer engagement

• Accelerated innovation across all categories, including PDRN launches for Clinique and The Ordinary, and new products in skincare, makeup, and fragrance.

• Unified global media model with WPP and expanded Shopify partnership are driving higher conversion and more efficient, targeted consumer engagement.

• AI is being leveraged to improve R&D efficiency, reduce time-to-market, and enhance ingredient and product development.

• Consumer-facing investments increased by 7% in fiscal 2026, with a focus on efficiency and emotional brand communication.

• Direct-to-consumer business is strengthening, with new digital platforms and higher conversion rates.