Estée Lauder Forecasts $1.90-$2.10 EPS, Low Single-Digit Sales Growth for FY26 Amid Beauty Reimagined Strategy Acceleration

Estée Lauder Companies has targeted $1.90-$2.10 EPS and low single-digit sales growth for fiscal 2026 as part of its Beauty Reimagined strategy. The company's Q4 2025 results show progress in regaining prestige beauty leadership, with CEO Stephane de la Faverie highlighting the acceleration of the strategy.

The Estee Lauder Companies Inc. (NYSE:EL) has set ambitious targets for fiscal 2026 as part of its "Beauty Reimagined" strategy. The company aims for an earnings per share (EPS) range of $1.90 to $2.10 and low single-digit sales growth, according to recent disclosures. These targets reflect the company's efforts to regain its leadership position in the global prestige beauty market.

The Q4 2025 results indicate progress in this strategy, with CEO Stephane de la Faverie highlighting the acceleration of the "Beauty Reimagined" initiative. The company's strategic plan aims to drive earnings recovery through innovation, market expansion, and cost optimization. Key elements of this plan include tripling innovation speed, expanding into faster-growing channels, implementing a 10% headcount reduction, and reinvesting cost savings into advertising and brand investment [1].

Despite recent challenges, Estee Lauder's financial position remains strong. The company's current ratio of 1.41 indicates sufficient liquidity to meet short-term obligations. Revenue declined by 3.65% in the last twelve months, but the company has maintained its dividend payments for 30 consecutive years, demonstrating long-term financial stability. Analysts project a path to recovery, with a 4% compound annual growth rate (CAGR) forecasted through fiscal year 2027, and operating margins expected to reach 12.0% by FY27E [1].

However, Estee Lauder faces several significant market challenges, including persistent difficulties in the Asia travel retail segment, increased competition in the US market, and ongoing volatility in key markets such as China and Korea. The company's decision to exit the wholesale channel in Korea has created additional challenges in this important market. Despite these challenges, the recovering China market presents significant opportunities for Estee Lauder [1].

Investors and analysts will closely watch the execution of the "Beauty Reimagined" plan and the company's ability to adapt to changing market dynamics in the coming years. The company's strategic initiatives and the potential recovery in key markets offer hope for future growth. For deeper insights into Estee Lauder's investment potential, explore the comprehensive Pro Research Report available exclusively on InvestingPro [1].

References:
[1] https://ca.investing.com/news/swot-analysis/estee-lauders-swot-analysis-beauty-giant-faces-challenges-seeks-growth-93CH-4160513