The Estée Lauder Companies reported strong first quarter 2027 results, surpassing analyst estimates for both revenue and earnings. Net sales grew 7% to $3.72 billion, driven by double-digit growth in luxury fragrance brands and a recovery in Mainland China and Asia travel retail. Profitability improved significantly, with adjusted operating margin expanding 480 basis points to 12.1%, leading the company to raise its full-year fiscal 2027 guidance for sales, margins, and EPS.
Key Highlights
- Organic Growth and Region Performance: Organic net sales increased 6%, with growth in every geographic region. Mainland China organic sales rose 9%, while the Asia/Pacific region saw a 73% increase in operating income due to airport replenishment orders and online retail stabilization in Hainan.
- Margin Expansion: Adjusted gross margin expanded 240 basis points to 75.7%, supported by cost efficiencies from the Profit Recovery and Growth Plan (PRGP) and strategic pricing, which successfully offset inflationary pressures.
- Fragrance Momentum: The fragrance category led product performance with a 20% organic sales increase, driven by double-digit gains in luxury brands Le Labo, Tom Ford, and Kilian Paris.
- Updated FY2027 Guidance: The company raised its full-year organic net sales growth target to 4.0%–5.5% and adjusted EPS to a range of $3.20–$3.45, up from the previous range of $3.10–$3.35.