The Estée Lauder Companies (EL) Status update summary

First-quarter performance and fiscal 2027 outlook

• Q1 reported sales rose 7% and organic sales rose 6%; growth spanned three of four categories and every region.

• Gross margin expanded 240 bps, operating margin 480 bps and diluted EPS 125%; consumer-facing investment increased 8%.

• Fiscal 2027 outlook was raised to reported sales growth of 5%-6.5%, organic growth of 4%-5.5%, operating margin of 12.9%-13.7% and diluted EPS growth of 28%-38%.

• Five consecutive quarters of organic sales growth, gross margin expansion and operating margin expansion marked continued progress.

Beauty Reimagined and fiscal 2030 ambitions

• Fiscal 2030 goals: annual mid-single-digit organic sales growth, industry outperformance and share gains; operating margin of 16.5%-18.5%.

• Gross margin is targeted at 76%-78% by fiscal 2030, versus 75.5% in fiscal 2026; fiscal 2024 gross margin was 71.7%.

• Effective tax rate is expected to reach 30% or below by fiscal 2030; double-digit EPS growth is expected through fiscal 2030.

• PRGP savings are expected to reach full run rate by end-2027, with benefits flowing through in 2028 and beyond; another profitability step-up is expected in fiscal 2028.

• Fiscal 2026 organic sales grew 3%, accelerating to 5% in Q4; adjusted operating margin expanded 320 bps and adjusted diluted EPS rose 66% vs. fiscal 2025.

Growth priorities and brand performance

• Q1 organic sales grew 20% in fragrance and 4% in skincare; makeup posted a second consecutive quarter of organic growth, while hair care improved sequentially.

• Mainland China organic sales growth accelerated to 9%; skincare and makeup each grew high single digits, fragrance grew double digits, and prestige share gains extended to seven consecutive quarters.

• MAC returned to growth in fiscal 2026 and delivered double-digit growth in Q1 fiscal 2027; The Ordinary recorded four consecutive quarters of double-digit organic growth.

• KILIAN PARIS accelerated organic sales growth by 19 percentage points from fiscal 2025 to fiscal 2026 and remained the fastest-growing brand in Q1 fiscal 2027.

• Emerging markets delivered 15% organic growth; they are expected to represent 15% of sales in the next several years. Online sales grew high single digits and physical retail, including travel retail, grew mid-single digits organically.