By Connor Hart

Estee Lauder lifted its adjusted earnings outlook for the year but continues to expect tariff-related headwinds to hurt its profit by about $100 million, mostly in the second half.

The New York owner of beauty brands such as MAC, Smashbox and Jo Malone now expects adjusted earnings of $2.03 and $2.23 a share for its fiscal year ending June 30, up from a previous outlook of $1.87 to $2.07 a share.

On a non-adjusted basis, though, the company cut its earnings outlook to a range of 98 cents to $1.22 a share, from a prior view for $1.39 a share to $1.65 a share.

"We raise our fiscal 2026 outlook confident in the strength of our turnaround, even as our second half reflects previously-expected headwinds and now-greater consumer-facing investments," said Chief Executive Stephane de La Faverie.

Shares fell 8%, to $110, in premarket trading Thursday.

Estee Lauder also raised the low-end of the sales growth outlook to up 3%, from up 2%, while maintaining the high-end of its guidance at up 5%.

De La Faverie assumed Estee Lauder's top role last year and was appointed to turn the company around. Under his leadership, the company has undergone "the biggest operational, leadership, and cultural transformation" in its history, he said. Estee Lauder laid off about 7,000 workers following a slump in sales in key Chinese and Korean markets last February, with de La Faverie stating at that time that the company had lost its agility.

For its three months ended Dec. 31, Estee Lauder swung to a profit of $162 million, or 44 cents a share, compared with a loss of $590 million, or $1.64 a share, a year earlier.

Stripping out one-time items, earnings were 89 cents a share. That compares with analyst forecasts for 83 cents a share, according to FactSet.

Net sales climbed 5.6% to $4.23 billion, in line with Wall Street views. On an organic basis, sales increased 3.8%.

Sales rose 6.9% to $2.05 billion across the company's skin care business, its largest top-line contributor. Makeup sales ticked up 1.2% to $1.16 billion.

Fragrance sales jumped 9.1% to $812 million, and the company's hair care business notched sales of $168 million, up 5.7% from last year.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

February 05, 2026 07:02 ET (12:02 GMT)

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