By Esther Fung

Estée Lauder executives said they are streamlining operations so the cosmetics giant can return to growth in 2026, but weaker demand in China could weigh on it.

"Tariffs are having an impact on consumer confidence" in China, Estée Lauder Chief Executive Stéphane de La Faverie told investors and analysts Thursday. The decline in its global travel retail business also hurt sales for the January-March quarter.

A company taskforce finding new supply chains in less tariffed countries has helped mitigate 40% of the initial impacts of the tariffs, de La Faverie said.

"Around the world, we are seeing retailers tightening their inventory," Akhil Shrivastava, Estée Lauder's chief financial officer, added.

The company said it made share gains in markets like the U.S., China, and Japan, and needs to work on the U.K. and South Korea.

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May 01, 2025 11:38 ET (15:38 GMT)

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