Benzinga Pro data showed Estée Lauder shares rising 2.30% to $111.74 in Monday's premarket trading after better-than-expected fiscal first-quarter 2027 results and an increased annual outlook. Adjusted earnings climbed from 32 cents to 72 cents per share, exceeding analysts' estimate of 51 cents. Revenue grew 7% year over year to $3,715 million, above Wall Street's $3,654 million estimate. Organic net sales grew 6%. Reported earnings reached 64 cents per share, compared with 13 cents a year earlier.
Procurement savings, more efficient manufacturing and strategic pricing helped adjusted gross margin rise 240 basis points to 75.7%. Higher sales and better cost management lifted adjusted operating margin by 480 basis points to 12.1%. Estée Lauder held $3.2 billion in cash at September's end. Debt stood at $7.25 billion at September's end. Free cash flow improved from negative $436 million a year earlier to negative $235 million. Estée Lauder paid shareholders $126 million in dividends. Estée Lauder also declared a dividend of 35 cents per share for the quarter, payable December 15 to shareholders registered on November 30.
Fragrance ranked first among product categories with organic sales growth of 20%, helped by Le Labo, TOM FORD, Jo Malone London and KILIAN PARIS. Skin Care sales increased 4%. Makeup sales increased 1%. Hair Care sales were unchanged. Asia/Pacific delivered organic growth of 10%. Mainland China recorded organic growth of 9%. The Americas and the region comprising Europe, the U.K. and emerging markets each recorded growth of 4%. Turkey, Mexico and India were the strongest growth contributors among priority emerging markets. Estée Lauder expanded through Amazon.com to offer 13 brands in 17 markets. Estée Lauder's TikTok Shop operations now span 15 brands in 11 markets.
CEO Stéphane de La Faverie said Estée Lauder's transformation strategy was accelerating sales growth, increasing profitability and making operations more efficient. De La Faverie emphasized product innovation, major marketing campaigns and work to strengthen the brands. De La Faverie said Estée Lauder now prioritizes sustainable long-term profitability rather than restoring growth. De La Faverie voiced confidence in the brands and transformation efforts, saying the strong fiscal 2027 opening supported raising the annual outlook.
Estée Lauder increased its fiscal 2027 adjusted earnings projection from $3.10 to $3.35 per share to $3.20 to $3.45, against analysts' expectation of $3.33. Estée Lauder raised its revenue projection from $15,500 million to $15,800 million to $15,801 million to $16,027 million, compared with Wall Street's $15,730 million estimate. Management increased projected organic sales growth from 3% to 5% to 4% to 5.5%. Estée Lauder lifted its adjusted operating margin forecast from 12.7% to 13.5% to 12.9% to 13.7%. Estée Lauder projects operating cash flow of $1.4 billion to $1.5 billion. Estée Lauder expects capital expenditures to equal approximately 4% of sales.
Management expects stronger growth in the first half, helped by earlier product launches and recovering travel retail demand. Estée Lauder anticipates further growth in Fragrance and Skin Care and a return to annual growth in Makeup. Estée Lauder acquired the remaining stake in India's Forest Essentials business in October. The acquisition is not expected to have a material effect on fiscal 2027 results. The outlook assumes geopolitical conditions, tariffs and consumer sentiment do not worsen further. Management expects no material effect on annual results from the Middle East conflict.
Estée Lauder Stock Rises on Strong Q1 2027 Earnings and Raised Outlook
BenzingaShare
Summary
Estée Lauder shares climbed 2.30% to $111.74 in premarket trading after the company posted stronger-than-expected Q1 2027 results. Adjusted earnings hit 72 cents per share, beating forecasts of 51 cents, with revenue rising 7% to $3,715 million. The firm also raised its full-year outlook, signaling a positive market outlook. With the fear and greed index showing growing investor confidence, the stock’s rise reflects strong performance and renewed optimism.
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