Estée Lauder Raises FY27 Outlook, Maps Path to 18.5% Margin by 2030

Key Points

• Estée Lauder raised its fiscal 2027 outlook, forecasting 5%–6.5% reported sales growth, 4%–5.5% organic growth, operating margin of 12.9%–13.7%, and diluted EPS growth of 28%–38%.
• The company’s first-quarter fiscal 2027 results showed improving momentum: organic sales rose 6%, gross margin expanded 240 basis points, and operating margin expanded 480 basis points. China organic sales grew 9%, with Estée Lauder gaining prestige beauty market share for a seventh consecutive quarter.
• By fiscal 2030, Estée Lauder targets mid-single-digit annual organic sales growth and an operating margin of 16.5%–18.5%, supported by restructuring savings, cost discipline, AI adoption, and operational improvements.

Estee Lauder Companies NYSE: EL used its Capital Markets Experience in Shanghai to outline a fiscal 2030 growth and margin plan, citing improving sales momentum, share gains in China, and expanded use of artificial intelligence, regionalized operations and consumer-facing investment.

President and CEO Stéphane de La Faverie said the company’s Beauty Reimagined strategy has produced five consecutive quarters of organic sales, gross-margin and operating-margin expansion. He said the company is moving from a recovery phase toward sustained profitable growth.

For the first quarter of fiscal 2027, Estée Lauder reported 7% sales growth on a reported basis and 6% organic sales growth. Gross margin expanded 240 basis points, operating margin expanded 480 basis points, and diluted earnings per share increased 125%, according to de La Faverie. Consumer-facing investment increased 8% during the quarter.

Fiscal 2027 Outlook and 2030 Targets

The company raised its fiscal 2027 outlook, now projecting:

• Reported sales growth of 5% to 6.5%.
• Organic sales growth of 4% to 5.5%.
• Operating-margin expansion of 170 to 250 basis points, reaching 12.9% to 13.7%.
• Diluted EPS growth of 28% to 38%.

Looking to fiscal 2030, Estée Lauder is targeting mid-single-digit annual organic sales growth, with the goal of outperforming the prestige beauty industry and gaining market share. The company is aiming for an operating margin of 16.5% to 18.5%, gross margin of approximately 76% to 78%, an effective tax rate of 30% or below, and double-digit EPS growth through fiscal 2030.

EVP and CFO Akhil Shrivastava said the company expects the full run-rate benefits of its Profit Recovery and Growth Plan restructuring program by the end of fiscal 2027, with those benefits flowing more fully in fiscal 2028 and beyond. He said management also plans to extend cost discipline through procurement, organizational simplification, zero-based budgeting, artificial intelligence and a continuous transformation platform.

Estée Lauder improved gross margin from 71.7% in fiscal 2024 to 75.5% in fiscal 2026, or nearly 400 basis points over two years, Shrivastava said. The company plans to support further improvement through procurement, product and packaging design, higher manufacturing utilization, lower waste, inventory management and promotion optimization.

Category, Brand and China Momentum

Fragrance was the company’s strongest category in the first quarter, with organic sales up 20%. Skincare organic sales increased 4%, makeup recorded its second consecutive quarter of organic growth, and hair care stabilized sequentially from a modest decline.

De La Faverie said mainland China organic sales growth accelerated to 9% in the first quarter, with high-single-digit growth in skincare and makeup and double-digit fragrance growth. The company gained prestige beauty market share in China for the seventh consecutive quarter.

China CEO and President Joy Fan said China domestic retail sales grew 10% in fiscal 2026, while the company’s prestige beauty market share reached 22.2%. Across China domestic, APAC travel retail and Hong Kong, consumer retail sales exceeded $9 billion and market share was 26.6%, she said.

Online sales represented 57% of Estée Lauder’s China business and grew 16% in fiscal 2026, Fan said. The company acquired 12 million new consumers in China during the year, up 25%, bringing its cumulative consumer base to approximately 100 million. It operates 17 brands in China, has more than 1,000 retail doors across 154 cities, and targets about 1,400 doors by fiscal 2030.

Among individual brands, de La Faverie highlighted MAC’s return to growth, including double-digit first-quarter growth; four consecutive quarters of double-digit organic sales growth for The Ordinary; and continuing momentum at KILIAN PARIS. He also said La Mer has benefited from nighttime skincare innovation and enhanced retail experiences.

Technology, Innovation and Operations

Chief Technology and Transformation Officer Brian Franz said Estée Lauder is using AI across consumer engagement, decision-making, product development, inventory allocation and enterprise productivity. The company’s AI-powered internal assistant, Ask ELC, has addressed more than 45,000 queries in 49 countries, with more than 90% resolved without human intervention, he said.

Franz also said the company’s Shopify partnership has reduced brand.com launch timelines from five to six months to six to eight weeks. The company reported a 12% increase in checkout completion, 60% Shop Pay adoption and an approximately 60% reduction in capital spending from reusable data, services and application interfaces.

Estée Lauder has selected Accenture as its enterprise business services partner and had transitioned 85% of relevant roles as of October, de La Faverie said. The company also consolidated more than 30 media agencies under WPP and expects to deploy Shopify across 80% of in-scope sales and 300 freestanding stores through fiscal 2027.

In research and innovation, Chief Research and Innovation Officer René Lammers said the company aims to increase innovation as a percentage of sales by 200 to 250 basis points in fiscal 2027 and to bring 30% of innovation to market in under 12 months. The China Innovation Center is expected to account for roughly 30% of global innovation sales in fiscal 2027.

Travel Retail Repositioning

President of APAC and Travel Retail Worldwide Matthew Growdon said travel retail is being repositioned as a consumer recruitment and brand-building platform rather than solely a transactional sales channel. The company has regionalized the business through hubs in London and Singapore and expanded operational teams in Shanghai and Hainan.

Travel retail is increasingly focused on luxury retail experiences, differentiated assortments and regional consumer preferences. In Hainan, Estée Lauder has approximately 6,000 square meters of retail space, and Olivier Dubos, head of Travel Retail Global, said 28% of the company’s consumers there are new to its brands.

De La Faverie said travel retail inventory is now “back into the right place,” allowing the company to increase investment in retail experiences and consumer recruitment across the channel.

About Estee Lauder Companies (NYSE:EL)

The Estée Lauder Companies Inc NYSE: EL is a global prestige beauty company that develops, markets and sells skincare, makeup, fragrance and hair-care products. Its portfolio includes brands such as Estée Lauder, Clinique, M·A·C, La Mer, Jo Malone London, Aveda, Bobbi Brown Cosmetics, Tom Ford Beauty, Le Labo and The Ordinary.

Founded in 1946 by Estée and Joseph Lauder, the company began with four skincare products and has expanded into a multinational beauty business. Its products are sold through department and specialty stores, beauty retailers, brand-operated stores, e-commerce platforms, salons, spas and other distribution channels.

The Estée Lauder Companies serves consumers in markets across the Americas, Europe, the Middle East and Africa, and Asia-Pacific.

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