Estee Lauder Reports Q4 EPS of $(3.15), Missing Estimates; Revenue at $14,326 Million

Estee Lauder reported Q4 EPS of $(3.15), missing estimates, and revenue of $14,326 million, also below estimates. The company faced challenges due to subdued consumer sentiment in Asia and strategic decisions to reduce reseller activity, resulting in an 8% decline in net sales. Despite this, Estee Lauder achieved a gross margin expansion of 230 basis points to 74.0%, driven by operational efficiencies and strategic pricing actions. The company plans to continue executing its strategic vision and rebuilding operating profitability.

Estee Lauder (EL) reported its fourth-quarter (Q4) 2025 results, showing mixed performance with earnings per share (EPS) of $0.09, missing estimates, and revenue of $3.41 billion, below consensus estimates. The company faced challenges due to subdued consumer sentiment in Asia and strategic decisions to reduce reseller activity, resulting in an 8% decline in net sales [1]. Despite these headwinds, Estee Lauder achieved a gross margin expansion of 230 basis points to 74.0%, driven by operational efficiencies and strategic pricing actions.

The company's Q4 GAAP EPS of $0.09 beat the Zacks Consensus Estimate of $0.08 per share, marking a 12.50% earnings surprise. However, this performance was primarily driven by non-recurring items, such as restructuring and other charges, and goodwill impairments. The company's adjusted EPS was $1.90, beating the consensus estimate of $1.87 [2].

Estee Lauder's revenue of $3.41 billion was $10 million higher than the Zacks Consensus Estimate of $3.40 billion, but it was still a 11.9% year-over-year (YoY) decline. The company's revenue was impacted by a 16% decrease in sales in Asia, primarily due to subdued consumer sentiment and currency fluctuations [1]. Additionally, the company's strategic decision to reduce reseller activity in the region also contributed to the decline in sales.

Looking ahead, Estee Lauder plans to continue executing its strategic vision and rebuilding operating profitability. The company expects to deliver a constant currency EPS of $1.87 to $2.07 for the full year 2025, compared to the consensus estimate of $2.22 [2]. The company also expects to achieve a gross margin of 74.0% for the full year, up from 71.7% in 2024.

Investors should keep an eye on Estee Lauder's earnings outlook and estimate revisions, as empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. The company's Zacks Rank is currently #3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [1].

References:

[1] https://www.nasdaq.com/articles/estee-lauder-el-surpasses-q4-earnings-and-revenue-estimates
[2] https://seekingalpha.com/news/4487310-estee-lauder-gaap-eps-of-0_09-beats-by-0_13-revenue-of-3_41b-beats-by-10m