Estée Lauder Companies Reports Record $15 Billion Net Sales in 2026, Boosted by Tariff Refunds

Estée Lauder Companies (ELC) concluded its 2026 fiscal year with a robust performance, reporting a 5% rise in net sales to reach $15 billion. The company attributed this growth to strong performance in fragrance and skin care, along with benefits from US tariff refunds. Gross profit also saw a 7% increase, climbing to $11.3 billion from $10.5 billion the previous year.

During the fourth quarter of fiscal 2026, ELC began receiving refunds for tariffs paid under the International Emergency Economic Powers Act (IEEPA). These refunds followed a Supreme Court ruling that deemed President Donald Trump's use of IEEPA for double-digit tariffs as incorrect, leading to companies suing the US Government for reimbursement. ELC recorded a $38 million benefit from these refunds in the fourth quarter, partially offsetting the full-year impact of $102 million in incremental tariffs.

## Market Performance and Digital Expansion

ELC faced profitability pressures in the make-up segment, which were mitigated by increased prestige beauty share in key markets. Mainland China saw value share gains in both the fourth quarter and full year, driven by fragrance, skin care, and make-up. South Korea also experienced a boom in prestige demand, with double-digit retail sales growth in the fourth quarter, fueled by make-up and skin care.

The company expanded its digital presence in 2026, reaching 13 brands across 11 markets on Amazon and 12 brands across nine markets on TikTok Shop. Stéphane de La Faverie, President and CEO of ELC, expressed pride in the team's performance, highlighting a 3% increase in organic sales and significant operating margin expansion. He emphasized the success of the 'Beauty Reimagined' strategy and the One ELC operating model in driving growth and efficiency.

## Category Performance

| Category | Sales Growth | Key Drivers | |------------|--------------|-----------------------------------------------------------------------------| | Skin Care | 4% | La Mer (Rejuvenating Eye Cream, The Treatment Lotion, The Moisturizing Soft Cream), The Ordinary, Estée Lauder | | Fragrance | 10% | Luxury Brands (Le Labo, Tom Ford, Kilian Paris), Le Labo's Classic Collection (Violette 30 launch) | | Make-up | Flat | MAC Cosmetics (Sephora launch), Tom Ford, Lip subcategory (Powder Kiss Lipstick, Lip Pencil) | | Hair Care | -1% | Declines from Aveda, offset by growth from The Ordinary |

Make-up sales remained largely flat, with growth from MAC Cosmetics' entry into Sephora and Tom Ford offsetting declines from Bobbi Brown and Too Faced. The lip subcategory continued to perform well, driven by products like Powder Kiss Lipstick and Lip Pencil. Too Faced faced challenges due to retail softness and unfavorable comparisons to prior-year shipments.

Looking ahead to fiscal 2027, ELC affirmed its confidence in accelerating organic sales growth and raised its outlook for adjusted operating margin. The company aims to diversify growth across product categories and geographies, including a focus on accelerating growth in North America.