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1. Company Snapshot

1.a. Company Description

The Estée Lauder Companies Inc.manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide.The company offers a range of skin care products, including moisturizers, serums, cleansers, toners, body care, exfoliators, acne care and oil correctors, facial masks, cleansing devices, and sun care products; and makeup products, such as lipsticks, lip glosses, mascaras, foundations, eyeshadows, nail polishes, and powders, as well as compacts, brushes, and other makeup tools.


It also provides fragrance products in various forms comprising eau de parfum sprays and colognes, as well as lotions, powders, creams, candles, and soaps; and hair care products that include shampoos, conditioners, styling products, treatment, finishing sprays, and hair color products, as well as sells ancillary products and services.The company offers its products under Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, Bobbi Brown, La Mer, Aveda, Jo Malone London, Bumble and bumble, Darphin, Smashbox, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, By Kilian, BECCA, Too Faced, Dr. Jart+, DECIEM, and The Ordinary brands.It also holds license arrangements for Tommy Hilfiger, Donna Karan New York, DKNY, Michael Kors, and Ermenegildo Zegna brands.


The company sells its products through department stores, specialty-multi retailers, upscale perfumeries and pharmacies, and salons and spas; freestanding stores; its own and authorized retailer websites; third-party online malls; stores in airports; and in-flight and duty-free shops.The company was founded in 1946 and is headquartered in New York, New York.

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1.b. Last Insights on EL

Breaking News: The Estée Lauder Companies Inc. recently presented at the Morgan Stanley Global Consumer & Retail Conference 2025. The company also launched an AI-powered Scent Advisor experience with Jo Malone London, allowing customers to discover fragrances through a conversational journey. There is no recent earnings release available. Analysts at various firms have given recommendations, with some recommending a buy, while others have given a hold or sell rating. The Estée Lauder Companies Inc. continues to innovate with technology, such as the Scent Advisor, to enhance customer experience.

1.c. Company Highlights

2. Estée Lauder's Q1 FY2026 Earnings: A Promising Start

Estée Lauder Companies reported a 3% organic sales growth in Q1 FY2026, a significant sequential acceleration from the 13% decline in the previous quarter. The company's gross margin expanded 60 basis points to 73.3%, driven by sales growth and strong net benefits from its PRGP program. Operating margin also improved, expanding 300 basis points to 7.3% compared to 4.3% last year. Diluted EPS more than doubled to $0.32, surpassing analyst estimates of $0.1757. Revenue growth was driven by market share gains in units, particularly in the U.S., where the company successfully repositioned certain brands and brought new consumers to the company.

Publication Date: Nov -01

📋 Highlights
  • Organic Sales Growth:: 3% growth in Q1, a significant acceleration from the 13% decline in Q4, driven by Mainland China's recovery.
  • Margin Expansion:: Gross margin expanded 60 bps to 73.3%, while operating margin surged 300 bps to 7.3% YoY.
  • Brand Performance:: Seven brands delivered double-digit growth, including Le Labo (nearly tripled retail sales) and The Ordinary’s U.S. skincare share gains.
  • Margin Guidance:: Full-year operating margin target reaffirmed at 9.4%–9.9%, with sequential improvement expected through cost efficiencies and PRGP initiatives.
  • EPS & Pricing Strategy:: Diluted EPS more than doubled to $0.32 YoY, supported by pricing actions (sub-2% increase) and unit growth driven by innovation and smaller product sizes.

Regional Performance

Mainland China contributed significantly to the return to growth, with retail sales increasing double-digit ahead of industry growth. The company's priority emerging markets also showed high single-digit growth. In the U.S., Prestige Beauty retail sales growth accelerated sequentially, driven by the Ordinary brand. Asia travel retail showed a mixed performance, with some positive momentum in Japan and Oceania, but still volatility in China.

Valuation Metrics

With a P/E Ratio of -37.55 and a P/S Ratio of 2.41, the market appears to be pricing in a challenging environment for the company. However, the company's efforts to drive growth through innovation and consumer-facing initiatives may help to improve its valuation multiples. Analysts estimate revenue growth at 3.6% for the next year, which may be a reasonable expectation given the company's current momentum.

Margin Expansion and Cost Management

The company's operating margin expansion was driven by its focus on cost efficiency and leverage. Akhil Shrivastava mentioned that the company is working to make sure it has enough fuel to invest in consumer-facing initiatives to drive business growth. The company's efforts to improve gross margin, build a cost muscle, and manage expenses in favor of consumer-facing investments are expected to drive long-term sustainable growth.

Outlook and Guidance

Estée Lauder reaffirmed its fiscal 2026 full-year outlook, with flat to 3% growth in organic net sales. The company expects stronger performance in the first half, driven by favorable comparisons in Asia Pacific and Mainland China. While the company is navigating a volatile macro environment, it remains confident in its ability to drive growth and share gains through its Beauty Reimagined strategy.

3. NewsRoom

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Edgestream Partners L.P. Purchases New Shares in The Estee Lauder Companies Inc. $EL

Dec -03

Source: defenseworld.net

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The Estée Lauder Companies Inc. (EL) Presents at Morgan Stanley Global Consumer & Retail Conference 2025 Transcript

Dec -02

Source: seekingalpha.com

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30% of the S&P 500 Is Mag 7 Tech Stocks, but This ETF Refuses to Own a Single One

Dec -02

Source: 247wallst.com

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The Estée Lauder Companies and Jo Malone London Introduce AI-Powered Scent Advisor Experience

Dec -02

Source: businesswire.com

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Estee Lauder Restructuring Has Cost $1.14 Billion

Dec -01

Source: wsj.com

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3 Beauty & Cosmetic Stocks Set to Ride on the Next Wave of Growth

Nov -25

Source: zacks.com

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Bank Julius Baer & Co. Ltd Zurich Sells 10,982 Shares of The Estee Lauder Companies Inc. $EL

Nov -23

Source: defenseworld.net

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The Pros And Cons Of Buying Estee Lauder Now

Nov -21

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.48%)

6. Segments

Skin Care

Expected Growth: 6.5%

The Estée Lauder Companies Inc.'s skin care segment growth of 6.5% is driven by increasing demand for premium and natural products, strategic acquisitions, and expansion in Asia. The company's brands, such as La Mer and Dr. Jart+, have contributed to growth through innovative product launches and effective marketing strategies, capturing market share in a competitive industry.

Makeup

Expected Growth: 4.2%

The Estée Lauder Companies Inc.'s makeup segment growth of 4.2% is driven by increasing demand for premium and natural products, strategic acquisitions, and strong online sales. The company's brands, such as MAC, Bobbi Brown, and Smashbox, have maintained their market share through innovative product launches and effective marketing strategies, contributing to the segment's growth.

Fragrance

Expected Growth: 5.1%

The 5.1% growth of Fragrance from The Estée Lauder Companies Inc. is driven by strong demand for luxury and niche fragrances, strategic pricing, and successful new product launches. Additionally, the company's digital transformation and expanded distribution channels have contributed to its growth momentum.

Hair Care

Expected Growth: 3.8%

The 3.8% growth in Hair Care from The Estée Lauder Companies Inc. is driven by strong demand for premium and natural products, innovation in scalp care and hair treatment, and strategic expansion in Asia-Pacific markets. The brand's loyalty programs and digital marketing efforts also contribute to its growth momentum.

Other

Expected Growth: 2.5%

The 'Other' segment growth of 2.5% for The Estée Lauder Companies Inc. is driven by increased demand for travel retail and emerging markets, particularly in Asia. This growth is also attributed to the company's strategic expansion of its product portfolio and distribution channels, catering to a broader customer base and enhancing brand visibility.

Unallocated Returns Associated with Restructuring and Other Activities

Expected Growth: 0.0%

The 0.0% growth in Unallocated Returns Associated with Restructuring and Other Activities for The Estée Lauder Companies Inc. suggests stability. Fundamental drivers include effective cost management, efficient restructuring efforts, and potentially offsetting gains/losses from other activities, indicating a balanced approach to managing non-core operations.

7. Detailed Products

Skin Care

The Estée Lauder Companies Inc.'s skin care products include moisturizers, serums, cleansers, and sunscreens that cater to various skin types and concerns such as aging, dryness, and sensitivity.

Makeup

The company's makeup products include foundation, eyeshadow, lipstick, and mascara from brands such as MAC, Bobbi Brown, and Smashbox, which offer a range of shades and finishes to suit different skin tones and preferences.

Fragrances

The Estée Lauder Companies Inc.'s fragrances include perfumes, scents, and colognes from brands such as Estée Lauder, Calvin Klein, and Tommy Hilfiger, which cater to different tastes and preferences.

Hair Care

The company's hair care products include shampoos, conditioners, and styling products from brands such as Bumble and bumble, Aveda, and Oribe, which cater to different hair types and needs.

Personal Care

The Estée Lauder Companies Inc.'s personal care products include body care products, hand care products, and men's grooming products from brands such as La Mer, Clinique, and M·A·C, which offer a range of benefits and textures.

8. The Estée Lauder Companies Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The Estée Lauder Companies Inc. operates in the cosmetics and personal care industry, where there are many substitute products available. However, the company's strong brand portfolio and product differentiation reduce the threat of substitutes.

Bargaining Power Of Customers

The company's diverse customer base and strong brand loyalty reduce the bargaining power of individual customers. Additionally, the company's products are often considered premium and necessary, which reduces customer sensitivity to price.

Bargaining Power Of Suppliers

The company has a large and diverse supplier base, which reduces the bargaining power of individual suppliers. Additionally, the company has a strong procurement strategy and is able to negotiate favorable terms with its suppliers.

Threat Of New Entrants

The cosmetics and personal care industry has low barriers to entry, which makes it easy for new companies to enter the market. Additionally, the rise of digital channels and social media has made it easier for new companies to reach customers.

Intensity Of Rivalry

The cosmetics and personal care industry is highly competitive, with many established players and new entrants competing for market share. The company competes with other major players such as L'Oréal, Unilever, and Procter & Gamble, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.90%
Debt Cost 7.26%
Equity Weight 35.10%
Equity Cost 9.70%
WACC 8.12%
Leverage 184.91%

11. Quality Control: The Estée Lauder Companies Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Kimberly-Clark

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Value: 3.2

Growth: 4.4

Quality: 6.0

Yield: 8.0

Momentum: 2.0

Volatility: 10.0

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Quality: 7.4

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Quality: 6.7

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Quality: 6.9

Yield: 2.0

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A-Score: 4.6/10

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Growth: 3.4

Quality: 6.2

Yield: 8.0

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Volatility: 4.0

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Estee Lauder

A-Score: 2.9/10

Value: 3.3

Growth: 1.7

Quality: 2.7

Yield: 2.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

105.41$

Current Price

105.41$

Potential

-0.00%

Expected Cash-Flows