Estée Lauder Surpasses Wall Street Expectations

October 30, 2025 – Reuters – Estée Lauder (NYSE: EL) exceeded Wall Street estimates for first-quarter sales and profit, driven by robust growth in its fragrance business and a rebound in demand from China and the Asia Pacific region. The results underscore progress in the company’s turnaround strategy under CEO Stephane de La Faverie.

Strong performance from Le Labo and Tom Ford fragrances, combined with strategic initiatives in marketing, product launches, and supply chain optimization, contributed to a revival in sales after prior declines.

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Q1 Financial Highlights

• Quarterly sales: $3.48 billion, beating analysts’ estimate of $3.38 billion.
• Adjusted profit: $0.32 per share, surpassing the expected $0.18 per share.
• Organic net sales: Rose 3%, recovering from a 5% decline in the prior year.

The company’s fragrance category was a standout performer, with 13% organic sales growth, while sales in China and the Asia Pacific region increased 9%.

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Strategic Turnaround and Supply Chain Adjustments

Under CEO Stephane de La Faverie, Estée Lauder has:

• Launched new luxury products, boosting brand appeal and consumer interest.
• Streamlined supply chains, reducing costs and increasing efficiency.
• Enhanced marketing efforts, driving engagement across global markets.

The company has also been shifting production closer to key markets to mitigate potential impacts from tariffs and evolving trade policies, following an estimated $100 million tariff hit in August.

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Positive Signals from China and the Asia Pacific

Estée Lauder highlighted improving consumer sentiment in China, although it remains below pre-pandemic levels. Analysts note that the luxury slump in China appears to have bottomed out, paving the way for a potential long-term recovery in the region.

“With the worst of China’s luxury slump likely behind us, the company is seeing a rebound from very weak prior-year comparisons and is poised for sustained growth,” said Sky Canaves, analyst at eMarketer.

Other luxury peers, including L’Oréal, LVMH, and Hermès, also reported tentative signs of recovery in China, highlighting a broader revival in the Asian luxury market.

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Regional and Sectoral Insights

• Americas: Sales continued to slow, reflecting lingering challenges in mature markets.
• Asia Pacific & China: Strong growth driven by renewed consumer demand and favorable comparisons to prior-year sales.
• Fragrance Business: Outperformed expectations, signaling the company’s successful focus on high-margin categories.

Despite strong results, shares of Estée Lauder declined about 2% in morning trading, mirroring broader market trends.

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Looking Ahead

Estée Lauder maintained its annual forecasts, anticipating stronger performance in the first half of the fiscal year, supported by growth in Asia Pacific, China, and its high-margin fragrance segment.

The company’s strategic initiatives in innovation, marketing, and supply chain optimization are expected to continue driving its long-term turnaround, while luxury fragrance growth and rebounding Asian markets remain key contributors to revenue.

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About Estée Lauder:
Estée Lauder is a global beauty and cosmetics company owning brands including Clinique, M.A.C, Jo Malone London, Le Labo, and Tom Ford. The company specializes in skincare, fragrances, and luxury cosmetics, operating worldwide with a focus on innovation, luxury branding, and market expansion.