The Estée Lauder Companies (EL) Q1 2027 earnings summary

Executive summary

• Q1 FY27 net sales rose 7% to $3.715B, with organic sales up 6%; growth spanned all regions and three of four categories.

• Adjusted operating margin expanded to 12.1% from 7.3%, and adjusted diluted EPS rose to $0.72 from $0.32; FY27 outlook was raised.

• Growth and profitability improvements reflected Beauty Reimagined and PRGP execution, with continued investment in innovation, brand campaigns and organizational agility.

Financial highlights

• Net sales were $3.715B vs. $3.481B; volume added 7%, FX added 1%, and pricing reduced growth by 1%.

• Gross profit was $2.813B vs. $2.554B; operating income was $408M vs. $169M, including restructuring and other charges of $40M vs. $89M.

• Net earnings were $233M vs. $47M; diluted EPS was $0.64 vs. $0.13, while adjusted diluted EPS was $0.72 vs. $0.32.

• Adjusted operating income rose 76% to $449M from $255M; adjusted operating margin was 12.1% vs. 7.3%.

• Operating cash outflow improved to $166M from $340M; free cash flow outflow was $235M vs. $436M, with capex of $69M vs. $96M.

Outlook and guidance

• FY27 organic sales growth guidance rose to 4.0%-5.5% from 3%-5%; reported sales growth is forecast at 5%-6.5%.

• Adjusted operating margin guidance increased to 12.9%-13.7% from 12.7%-13.5%; adjusted diluted EPS guidance rose to $3.20-$3.45 from $3.10-$3.35.

• Operating cash flow guidance increased to $1.4B-$1.5B from $1.3B-$1.4B; adjusted effective tax rate is expected at 33%-34%.

• Sales growth is expected to be stronger in H1 than H2, reflecting innovation timing and tougher travel-retail comparisons; forecast assumes continued Fragrance and Skin Care growth and a full-year return to Makeup growth.

• Outlook assumes no worsening of geopolitical conditions or consumer sentiment; tariffs, commodity and freight costs are among the sensitivities reflected in guidance.