The Estee Lauder Companies Inc. EL reported fourth-quarter fiscal 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
Adjusted earnings of 39 cents per share beat the Zacks Consensus Estimate of 32 cents in the fiscal fourth quarter. The bottom line increased from 9 cents in the year-ago quarter.
The company's quarterly net sales of $3,627 million beat the Zacks Consensus Estimate of $3,551 million. The top line increased 6% year over year. Organic net sales increased 5% to reach $3,590 million.
EL's Category-Wise Q4 Revenue Results
Skin Care sales increased 9% year over year to $1,853 million, with organic sales up 7%. Fragrance sales rose 10% to $618 million, with organic sales also up 10%.
Makeup sales increased 3% to $1,010 million, while organic sales rose 2%. Hair Care sales slipped 1% to $140 million, with the same decline organically.
Other sales fell 5% to $19 million. Among the four core categories, Skin Care, Makeup and Fragrance grew, while Hair Care declined.
EL's Q4 Regional Revenue Results
The Americas generated net sales of $995 million, up 6% on a reported basis and 5% organically. Asia/Pacific net sales climbed 7% to $970 million and rose 9% organically. Mainland China sales advanced 12% to $824 million, with organic growth of 7%. EUKEM sales increased 3% to $851 million and rose 1% organically.
EL’s Q4 Margin Breakdown: Key Insights
Adjusted gross profit increased 12% year over year to $2,750 million. Adjusted gross margin reached 75.5%, up from 72% in the prior-year quarter.
Adjusted operating income rose 95% to $267 million from $137 million.
EL’s Financial Health Snapshot
The company exited the quarter with cash and cash equivalents of $3,498 million, long-term debt of $6,803 million and total equity of $3,806 million. The net cash flow provided for operating activities for the 12 months ended June 30, 2026, was $1,773 million. Capital expenditures during this time amounted to $457 million.
EL’s Restructuring Program of PRGP
The company recognized $0.3 billion of restructuring charges in the fiscal fourth quarter and $0.8 billion for fiscal 2026, bringing cumulative Profit Recovery and Growth Plan (“PRGP”) restructuring charges to $1.4 billion. Approvals for restructuring initiatives were concluded as of June 30, 2026. Consumer-facing investments increased 7% in the fiscal fourth quarter and full year.
Once fully implemented, the restructuring program is expected to deliver about $1.2 billion in annual gross benefits. Estee Lauder also expects a final net reduction of roughly 10,000 positions, while total restructuring and other charges are projected to finish slightly above the high end of the previously announced $1.5-$1.7 billion range. The program is still expected to be substantially completed in fiscal 2027.
What to Expect From EL in Fiscal 2027?
For fiscal 2027, EL expects organic net sales growth guidance of 3-5% and adjusted operating margin outlook of 12.7-13.5%.
Adjusted earnings are projected at $3.10-$3.35 per share, representing growth of 24-34%. The company expects continued growth in Fragrance and Skin Care and a return to growth in Makeup.
This Zacks Rank #3 (Hold) stock has gained 10.7% in the past three months compared with the industry’s growth of 18%.
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Stocks to Consider
Five Below, Inc. FIVE operates as a specialty value retailer in the United States and currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Five Below’s current fiscal-year sales and earnings calls for growth of 15.1% and 36.1%, respectively, from the year-ago reported numbers. FIVE delivered a trailing four-quarter earnings surprise of 70.1%, on average.
Dollar Tree Inc. DLTR is an operator of discount variety stores offering a broad assortment of everyday consumables and discretionary merchandise. The company currently carries a Zacks Rank of 2. DLTR delivered a trailing four-quarter earnings surprise of 32.1%, on average.
The Zacks Consensus Estimate for Dollar Tree’s current fiscal-year sales and EPS indicates growth of 6.5% and 21.7%, respectively, from the year-ago reported numbers.
Dollar General Corporation DG is one of the largest discount retailers in the United States, selling low-priced merchandise, typically $10 or less. The company currently has a Zacks Rank of 2. DG delivered a trailing four-quarter earnings surprise of 21%, on average.
The Zacks Consensus Estimate for Dollar General’s current fiscal-year sales and EPS is expected to rise 3.9% and 7.6%, respectively, from the year-ago reported figures.
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The Estee Lauder Companies Inc. (EL): Free Stock Analysis Report
Dollar General Corporation (DG): Free Stock Analysis Report
Dollar Tree, Inc. (DLTR): Free Stock Analysis Report
Five Below, Inc. (FIVE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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