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Estée Lauder Companies 8-K Report, Financial Results (Feb 5, 2026)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 5, 2026
Period End
February 5, 2026
Security
EL
In the record · 2016–202610-K1110-Q338-K126

EL filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 126 current reports (8-K) between 2016 and 2026.

  1. Restructuring8-K · Mar ’18Mar ’18
  2. Restructuring8-K · Aug ’20Aug ’20
  3. Leadership change8-K · Jul ’22Jul ’22
  4. Leadership change8-K · Feb ’25Feb ’25

01—Abstract

Summary

Summary of the 8-K filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.

The Estée Lauder Companies Inc. reported fiscal 2026 second-quarter results for the quarter ended December 31, 2025, with net sales of $4.2 billiona, up 6% as reported and up 4% on an organic basis.

Gross margin expanded 40 basis points to 76.5%, and adjusted operating margin expanded 290 basis points to 14.4% from 11.5%, which the company attributes to net benefits from its Profit Recovery and Growth Plan ("PRGP"). Reported operating income was $401 millionb, compared with a loss of $(580) million in the prior-year period that included $861 million of goodwill and other intangible asset impairments. Diluted EPS was $.44, and adjusted diluted EPS was $.89, up 43% from $.62.

For the six months ended December 31, 2025, net cash flows from operating activities increased to $785 millionc from $387 million, and free cash flow was $581 million compared with $114 million. The company paid $150 million in deferred consideration for the TOM FORD acquisition and $255 million in dividends during the period. The company declared a quarterly dividend of $.35 per share payable March 16, 2026.

The company raised its fiscal 2026 full-year outlook, tightening the net sales growth range to 3% to 5% as reported (1% to 3% organic) and raising adjusted diluted EPS guidance to $2.05 to $2.25d and adjusted operating margin guidance to 9.8% to 10.2%. Management cited an expected second-half operating margin contraction in the third quarter and about $100 million of tariff-related profitability headwinds, mostly in the second half. The company still expects restructuring charges of $1.2 billion to $1.6 billion under the PRGP, with actions substantially completed in fiscal 2027.

02—Key points

Key Highlights

  1. Net sales rose 6% to $4.2 billion (4% organic); Mainland China net sales grew 13% as reported.
  2. Adjusted operating margin expanded 290 basis points to 14.4%; reported operating income was $401 million versus a $(580) million loss a year earlier.
  3. Adjusted diluted EPS of $.89 rose 43% from $.62; reported diluted EPS was $.44.
  4. Fiscal 2026 outlook raised: adjusted diluted EPS of $2.05 to $2.25 and adjusted operating margin of 9.8% to 10.2%, with reported net sales growth of 3% to 5%.
  5. Free cash flow for the six months was $581 million versus $114 million, with capital expenditures down to $204 million from $273 million.
  6. Estimated tariff headwind of approximately $100 million to fiscal 2026 profitability, net of mitigation, mostly in the second half.
  7. Restructuring charges under the PRGP are still expected at $1.2 billion to $1.6 billion, with a net reduction of 5,800 to 7,000 positions.

03—Questions

Frequently Asked Questions

  1. How did Estée Lauder perform in the fiscal 2026 second quarter?

    Net sales increased 6% to $4,229 million, or 4% on an organic basis. Gross margin expanded to 76.5% from 76.1%, and reported operating income was $401 million compared with a loss of $(580) million in the prior-year quarter, which included $861 million of impairments.

  2. What changed in the company's fiscal 2026 full-year outlook?

    The company tightened its reported net sales growth range to 3% to 5% and raised its adjusted diluted EPS outlook to $2.05 to $2.25 from prior guidance, and its adjusted operating margin outlook to 9.8% to 10.2%. Organic net sales growth is expected between 1% and 3%.

  3. What are the main headwinds the company identified?

    The company cited an unfavorable impact of approximately $100 million on profitability from enacted tariffs, net of mitigation, mostly in the second half. It also expects an operating margin contraction of about 50 basis points in the third quarter, owing to timing of consumer-facing investments and tariff headwinds, and a transitory headwind from the change of duty-free retailers at Beijing and Shanghai airports.

  4. How is the company's cash generation trending?

    For the six months ended December 31, 2025, net cash flows from operating activities were $785 million, up from $387 million, and free cash flow was $581 million compared with $114 million. For fiscal 2026, operating cash flow is expected to be between $1.1 billion and $1.2 billion, reflecting higher restructuring payments that are expected to peak in fiscal 2026.

  5. What is the Profit Recovery and Growth Plan (PRGP)?

    The PRGP is the company's plan to transform its operating model, fund a return to sales growth in fiscal 2026, and restore a solid double-digit adjusted operating margin over the next few years. Its restructuring component is expected to yield annual gross benefits of $0.8 billion to $1.0 billion before taxes, with actions substantially completed in fiscal 2027.

04—Continue

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