The Estee Lauder 2025 Q4 Earnings Record Low as Net Loss Widens 90.9%

The Estee Lauder reported its fiscal 2025 Q4 earnings on Aug 20th, 2025. The results missed expectations, with a significant widening in the net loss and a double-digit revenue decline. The company also lowered its outlook for the near term.

Revenue for The Estee Lauder fell by 11.9% to $3.41 billion in fiscal 2025 Q4, compared to $3.87 billion in the same period in 2024, reflecting continued headwinds in global retail and travel channels.

The Estee Lauder's losses deepened to $1.52 per share in 2025 Q4 from a loss of $0.79 per share in 2024 Q4, representing a 91.7% increase in the loss per share. Meanwhile, the company's net loss widened to $-546 million in 2025 Q4, compared to $-286 million in the prior year, a 90.9% increase. The results represent a record low in profitability for the company.

The stock price of The Estee Lauder edged up 0.66% during the latest trading day but tumbled 9.12% during the most recent full trading week, and edged up 0.62% month-to-date.

A post-earnings price action review showed that a strategy of buying Estee Lauder shares after the quarterly revenue drop and holding for 30 days led to a substantial loss. Over the past three years, this strategy returned -71.83%, underperforming the benchmark return of 53.10% and generating an excess return of -124.94%. The strategy's CAGR was -35.43%, indicating a significant decline in value. The strategy also reflected high risk, as shown by a Sharpe ratio of -0.76, and a maximum drawdown of 0.00%.

CEO Stephane de la Faverie acknowledged the 8% organic sales decline in fiscal 2025, with two-thirds of the decline attributed to travel retail. He highlighted progress in regaining market share in key markets like China, Japan, and the U.S., driven by brand innovation and consumer-facing investments. Strong performance from brands like Le Labo, La Mer, and The Ordinary underscored the company's ongoing efforts. De la Faverie emphasized the success of the Beauty Reimagined initiative, including accelerated online coverage and innovative product launches, and expressed optimism about fiscal 2026, where the company is positioned for a turnaround with low single-digit organic sales growth and margin expansion. He also noted a return to growth, stronger gross margins, and a focus on high-growth emerging markets.

For fiscal 2026, The Estee Lauder expects low single-digit organic sales growth, an operating margin between 9.4% and 9.9%, and diluted EPS between $1.90 and $2.10. The company aims to expand operating margins by 165 basis points through PRGP savings and cost discipline. It anticipates $1 billion to $1.1 billion in operating cash flow and $600 million in capital expenditures. The guidance includes a $100 million tariff-related headwind, partially offset by mitigation strategies. The company projects modest global prestige beauty growth of 2% to 3% and expects to narrow the gap between retail and net sales growth through inventory management and reduced discounts.

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