Estée Lauder Q1 sales rise 7% to $3.72 billion and annual forecasts are raised

Estée Lauder reported first-quarter 2027 sales of $3.72 billion, a 7% rise from a year earlier and ahead of the $3.65 billion analysts had compiled through LSEG. Growth was led by premium skincare and fragrance, the categories the group has bet its turnaround on.

Operating income more than doubled over the three months to September 30, 2026, rising from $169 million a year ago to $408 million. Gross profit reached $2.81 billion, up from $2.55 billion, and gross margin expanded 230 basis points to 75.7% from 73.4%.

Chief executive Stéphane de La Faverie framed the quarter as proof his year-long Beauty Reimagined programme is working. "Growth is accelerating, profitability is strengthening significantly, and the impact of Beauty Reimagined is becoming increasingly evident across our business," he said.

Affluent and younger consumers kept spending on high-end skincare and fragrance despite broader economic uncertainty, the company said. Le Labo, Tom Ford and Jo Malone London were named as the brands that strengthened most over the period.

The outlook climbs

The group now expects fiscal 2027 organic sales to grow between 4% and 5.5%, up from an earlier forecast of 3% to 5%. Annual adjusted profit is guided to between $3.20 and $3.45 per share, raised from a prior range of $3.10 to $3.35.

"We are building diverse drivers for sustained profitable growth." His remarks carried a note of confidence absent from earlier guidance, crediting team energy and brand strength for the upgrade.

Beauty Reimagined is the operating plan behind the improvement. It presses on faster innovation, expansion into new channels and markets, AI for consumer insight and marketing, heavier consumer-facing investment, streamlined operations and cost savings that include trimming roles.

The margin expansion is the clearest sign the strategy is translating into the income statement rather than just the top line.

Estée Lauder is a global leader in beauty, spanning skincare, makeup, fragrance and hair care, and the first quarter is its first clean read on demand heading into the holiday season. That season is where fragrance typically makes a disproportionate share of annual profit.

The results put Estée Lauder among the better first-quarter showings we have tracked this cycle. Tapestry beat forecasts on a 16% Coach surge, while Hugo Boss cut guidance after sales fell 5% and Nivea dragged Beiersdorf down 1.3%.

The comparisons are not flattering everywhere. LVMH's fashion and leather goods slipped 5% on China in the same stretch, yet Estée Lauder's skincare and fragrance held firm, which says as much about category resilience as about execution.

The company is also spending on its supply chain. We covered its €5.7 million investment in water circularity at the Oevel plant in Belgium, which aims to save 25 million litres a year and cut water intensity from 9.3 to 3.6 litres per kilogram of product.

There is movement in the executive ranks too. When we reported that Gaétane Baudry had been named global general manager of Bobbi Brown, the brief was digital-first, reporting to makeup chief Lisa Sequino, and it is inside the same repositioning that is now showing up in the numbers.

The skincare and fragrance bottles that symbolise the group's premium strategy now are atop a margin structure that has climbed back toward 76%. That is the concrete outcome of a programme built on faster innovation and disciplined cost removal.

The guidance raise is the first time de La Faverie has lifted the full-year numbers since his plan began, and it lands before the holidays, the quarter that will test whether affluent and younger buyers keep spending at the pace that steadied this earnings report.

Nothing in the statement sets a date for the next milestone, but the raised range now binds the company to a higher floor than it promised three months ago. The question for the coming quarter is whether Le Labo, Tom Ford and Jo Malone can hold that line.

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Images: Estée Lauder Companies