Estee Lauder (NYSE:EL) saw its stock drop more than 10% on Wednesday after the beauty giant revised its annual profit outlook below Wall Street estimates, citing continued softness in demand across the U.S. and China and lingering tariff uncertainties.
The company flagged around $100 million in expected profit pressures for fiscal 2026, despite efforts to mitigate the impact.
“The company continues to closely monitor evolving trade policies and enacted tariffs, and its task force has been actively evaluating developments and mitigation strategies to reduce the potential impacts of tariffs,” Estee Lauder said in a statement.
For the full year, the company projected adjusted earnings per share between $1.90 and $2.10, falling short of analysts’ consensus of $2.21, according to LSEG data. Organic net sales are anticipated to rise 0%–3% in the year ahead.
In its fiscal fourth quarter, Estee Lauder reported EPS of $0.09, a cent above analysts’ expectations, while revenue came in at $3.41 billion, slightly surpassing the $3.39 billion consensus.
Organic net sales declined 13%, mainly due to soft performance in the Skin Care and Makeup segments. Sales fell across all regions, with the largest drops seen in North America and the global travel retail business.
“Despite continued volatility in the external environment, we embarked on fiscal 2026 with signs of momentum and confidence in our outlook to deliver organic sales growth this year after three years of declines and to begin rebuilding operating profitability in pursuit of a solid double-digit adjusted operating margin over the next few years,” said Stephane de La Faverie, President and CEO of Estee Lauder.
By product category, Skin Care revenues fell 17% in the quarter, primarily driven by lower demand for Estée Lauder and La Mer brands.
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