The Estée Lauder Companies (NYSE:EL) reported second-quarter results on Thursday that cleared Wall Street estimates, as a powerful rebound in Mainland China and a sweeping "Profit Recovery" plan offset persistent global inflation and tariff pressures.
The New York-based beauty giant posted adjusted earnings of $0.89 per share, a 43% increase that significantly outperformed the $0.83 consensus estimate.
Revenue rose 6% to $4.2 billion, driven by double-digit organic growth in Mainland China.
The company’s performance during the crucial "11.11" Global Shopping Festival and holiday season proved pivotal, with premium brands like La Mer and Tom Ford gaining market share as Chinese consumers returned to luxury skincare.
Profitability was the quarter’s standout story.
Adjusted operating margin expanded by 290 basis points to 14.4%, a result of the company’s "Profit Recovery and Growth Plan" (PRGP).
This strategic overhaul—which involves a net reduction of approximately 7,000 jobs and the consolidation of global service providers—has now incurred roughly $1.14 billion in restructuring charges but is delivering tangible operational efficiencies in procurement and inventory management.
These savings allowed Estée Lauder to increase its "consumer-facing" marketing investments even as it thinned out non-essential corporate expenses.
Despite the earnings beat, the company faced a sharply higher effective tax rate of 51.4%, primarily due to newly enacted U.S. tax legislation and valuation allowances on foreign assets.
Looking ahead, CEO Stephane de La Faverie—who took the helm late last year—signaled that 2026 remains a "pivotal year."
While management maintained its conservative full-year guidance of $1.90 to $2.10 adjusted EPS, the stock climbed 3% in pre-market trading as investors cheered the stabilizing trends in Asia travel retail and the successful integration of its "Beauty Reimagined" strategy.