01—Abstract
Summary
Summary of the 8-K filed November 2, 2026. Cited figures are marked; the original filing is the authoritative source.
The Estée Lauder Companies Inc. (NYSE: EL) reported fiscal 2027 first quarter results (quarter ended September 30, 2026) in a press release furnished as Exhibit 99.1 to this Form 8-K.
Net sales rose 7% to $3.7 billiona ($3,715 million from $3,481 million), with organic net sales up 6%. Operating income more than doubled to $408 million from $169 million, and as-reported operating margin expanded 610 basis points to 11.0%. Adjusted diluted EPS was $0.72 versus $0.32 a year earlier, and as-reported diluted EPS was $0.64 versus $0.13.
Growth was led by Fragrance (net sales up 19% as reported, 20% organic) and Skin Care (up 5% as reported, 4% organic), with Makeup up 2% and Hair Care flat. Free cash flow improved to negative $235 millionb from negative $436 million, and cash and cash equivalents were $3.20 billion at September 30, 2026. The company raised its fiscal 2027 full-year outlook.
Organic net sales growth is now expected at 4.0% to 5.5% (previously 3% to 5%), adjusted operating margin at 12.9% to 13.7% (previously 12.7% to 13.5%), and adjusted diluted EPS at $3.20 to $3.45c (previously $3.10 to $3.35). Operating cash flow guidance was raised to $1.4 billion to $1.5 billion from $1.3 billion to $1.4 billion.
Management noted continued caution around geopolitical and macroeconomic uncertainty, and said it does not expect the Middle East conflict to have a material impact on fiscal 2027 results. The company also declared a quarterly dividend of $0.35d per share, payable December 15, 2026 to holders of record on November 30, 2026, and announced a Capital Markets Experience in Shanghai with a webcast on November 4, 2026.
02—Key points
Key Highlights
- Net sales of $3,715 million, up 7% as reported and 6% organic, with growth across nearly all product categories and every geographic region.
- Operating income of $408 million versus $169 million; as-reported operating margin of 11.0% vs. 4.9%, and adjusted operating margin of 12.1% vs. 7.3%.
- Diluted EPS of $0.64 vs. $0.13 as reported; adjusted diluted EPS of $0.72 vs. $0.32.
- Fiscal 2027 outlook raised: organic net sales growth 4.0%–5.5%, adjusted operating margin 12.9%–13.7%, adjusted diluted EPS $3.20–$3.45.
- Free cash flow improved to negative $235 million from negative $436 million; operating cash flow outflow narrowed to $166 million from $340 million.
- Fragrance net sales rose 19% as reported (20% organic), led by Luxury Brands including Le Labo, TOM FORD, Jo Malone London and KILIAN PARIS.
- Quarterly dividend of $0.35 per share declared, payable December 15, 2026; Capital Markets Experience webcast in Shanghai on November 4, 2026.
03—Questions
Frequently Asked Questions
Why did the company raise its fiscal 2027 outlook?
The company cited its strong fiscal 2027 first quarter performance, with growth accelerating, profitability strengthening and benefits from Beauty Reimagined becoming more evident. It still described its outlook as cautious given ongoing geopolitical and macroeconomic uncertainty.
What drove the improvement in operating margin?
The filing attributes the margin expansion to operating leverage and gross margin expansion, which funded increased consumer-facing investments. Gross margin rose to 75.7% from 73.4%, reflecting Profit Recovery and Growth Plan savings, sales leverage and net benefits from strategic pricing. Restructuring and other charges also fell by $45 million year over year.
How did the company's cash position and cash flow change?
Cash and cash equivalents were $3.20 billion at September 30, 2026, compared with $2.22 billion a year earlier. Net cash used in operating activities narrowed to $166 million from $340 million, and capital expenditures fell to $69 million from $96 million. Dividend payments totaled $126 million in the quarter.
Which areas of the business showed weakness this quarter?
Estée Lauder brand net sales declined within Makeup, reflecting lower face subcategory sales and the timing of new product launches. Aveda sales in Hair Care declined due to brand-specific supply chain logistical challenges, which held Hair Care net sales flat overall.
What does the Middle East conflict mean for the outlook?
Based on current conditions and its assessment to date, the company does not expect the conflict in the Middle East to have a material impact on its fiscal 2027 results. It said it will continue to monitor the situation closely, and expects stronger EUKEM growth in the second half against an easier comparison affected by disruptions from that conflict.
04—Continue