The Estee Lauder Companies Builds on Category Strength: What's Next?

The Estee Lauder Companies Inc. EL continues to draw much of its recent business strength from two core categories, skin care and fragrance. Both have remained important growth drivers for the company, backed by new products, premium brand appeal and steady demand in several markets.

This backdrop is especially notable as EL has confirmed that it is in talks over a possible business combination with Puig. The companies are discussing a potential merger of their businesses, although nothing has been finalized, and no agreement has been reached. The update comes at a time when EL is showing clear traction in some of its strongest areas.

For the second quarter of fiscal 2026, The Estee Lauder Companies’ organic net sales rose 4%, helped by 6% growth in both skin care and fragrance. Skin care brought in $2,054 million in sales, with support from brands such as La Mer, Estee Lauder and The Ordinary. Growth in the category was supported by innovation, holiday selling and consumer-focused spending. Fragrance posted sales of $812 million, led by luxury names, including TOM FORD, Le Labo and KILIAN PARIS, along with product launches and broader consumer reach.

The broader business mix points to the same trend. The Estee Lauder Companies’ fragrance has been performing well across regions, helped by healthy retail demand and wider distribution. Skin care has also held up well, supported by strong franchise brands and a steady flow of innovation.

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EL has also been putting more investments behind consumer-facing initiatives while broadening its presence across online and in-store channels. Those moves have supported performance in its stronger categories and helped the company gain share in important markets.

Overall, the picture remains fairly focused. The Estee Lauder Companies’ recent momentum is being led by skin care and fragrance, which continue to stand out as the company’s main areas of strength at this stage.

Shares of this Zacks Rank #3 (Hold) company have risen 9.2% in the past year against the industry’s decline of 7.6%.

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