Download PDF

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.

Show Full description

1.b. Last Insights on EL

The Estée Lauder Companies Inc.'s recent performance was driven by strong Q2 earnings, with a 43% increase in EPS to $0.89 and a 4% year-on-year organic sales growth. Margin expansion, particularly a 40 basis point increase in gross margin to 76.5%, also contributed positively. Growth in China was a key factor, offsetting weakness in the Americas. The company's restructuring efforts yielded cost savings and improved free cash flow. Increased stakes by investors like Azzad Asset Management and GoalVest Advisory also supported the stock.

1.c. Company Highlights

2. Estee Lauder Companies Delivers Strong Q2 Results, Raises FY26 Outlook

Estee Lauder Companies reported a 4% organic sales growth and EPS growth of 43% in Q2, driven by strong performance in skincare and fragrance, with 6% growth. Gross margin expanded 40 basis points, driven by strong net benefits from the PRGP and improved sales leverage. Operating margin expanded 290 basis points to 14.4%, driven by disciplined investment allocation and PRGP net benefits. EPS came in at $0.89, beating estimates of $0.835, with the actual reported EPS being $0.87 after adjusting for certain items, representing a 43% increase.

Publication Date: Feb -06

📋 Highlights
  • Strong Q2 Performance:: Organic sales grew 4%, EPS surged 43% to $0.89, driven by cost savings from PRGP and improved sales leverage.
  • Beauty Reimagine Success:: Gained market share in China (+mid-single digit), Hainan, Japan, France, and the US, with retail sales growth of 4% (excluding travel retail).
  • Online Expansion:: First-half online organic sales rose high single-digits, with fiscal 2026 online sales reach on track to exceed 31% (vs. 28% in 2025).
  • Margin Expansion:: Operating margin expanded 290 bps to 14.4%, gross margin up 40 bps, supported by PRGP savings and disciplined cost management.
  • 2026 Outlook Raised:: Organic sales growth now 1–3% (prior 0–2%), EPS guidance raised to $2.50–$2.25 (vs. $1.90–$2.10), reflecting 36–49% YoY growth.

Segment Performance

The company's retail sales trend improved from down 4% to flat in the second quarter, with growth of 4% in the first half excluding travel retail. Mainland China outperformed Prestige Beauty with double-digit growth. The company gained share in several markets, including China, Hainan, Japan, France, and the US. Online organic sales growth was high single-digit in the first half, driven by expanded presence on Amazon premium beauty stores and TikTok shop.

Guidance and Outlook

The company raised its fiscal 2026 outlook, narrowing its organic net sales growth range to 1% to 3%, and increasing operating margin expansion to 810 basis points. Diluted EPS is now expected to range between $2.5 and $2.25, up from a previous range of $1.90 and $2.10, representing year-on-year growth of 36% to 49%. Analysts estimate next year's revenue growth at 3.8%.

Valuation

With a P/E Ratio of -196.63, P/B Ratio of 8.68, and P/S Ratio of 2.38, the company's valuation metrics indicate a premium valuation. The EV/EBITDA ratio is 33.81, suggesting a relatively high valuation compared to its earnings before interest, taxes, depreciation, and amortization. The ROE and ROIC are both negative, at -4.41% and -4.59% respectively, indicating potential inefficiencies in generating profits from shareholders' equity and capital employed.

3. NewsRoom

Card image cap

Estee Lauder sues Walmart alleging 'despicable' sale of counterfeit beauty products

Feb -10

Source: cnbc.com

Card image cap

5 Consumer Staples Giants to Buy Amid the Sector's Strong Momentum

Feb -10

Source: zacks.com

Card image cap

Here Are Tuesday’s Top Wall Street Analyst Research Calls: Booking Holdings, On Semi, Palantir Technologies, Snap, Spotify, Qualcomm, Vistra Corp., and More

Feb -10

Source: 247wallst.com

Card image cap

Azzad Asset Management Inc. ADV Grows Holdings in The Estee Lauder Companies Inc. $EL

Feb -09

Source: defenseworld.net

Card image cap

Should You Cut Your Position In Estee Lauder Stock?

Feb -06

Source: forbes.com

Card image cap

These Analysts Revise Their Forecasts On Estee Lauder After Q2 Earnings

Feb -06

Source: benzinga.com

Card image cap

Here Are Friday’s Top Wall Street Analyst Research Calls: Amazon.com, Caterpillar, Estee Lauder, JPMorgan, Norfolk Southern, Roku, Snap, Vistra, and More

Feb -06

Source:

Card image cap

Estée Lauder Shares Hit By $100 Million Tariffs Despite Growth Signs

Feb -06

Source: forbes.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

Stock-Card
Kimberly-Clark

A-Score: 5.5/10

Value: 4.3

Growth: 4.3

Quality: 6.1

Yield: 8.0

Momentum: 1.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Procter & Gamble

A-Score: 5.4/10

Value: 3.0

Growth: 4.4

Quality: 7.5

Yield: 5.0

Momentum: 2.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Colgate-Palmolive

A-Score: 5.2/10

Value: 3.1

Growth: 4.8

Quality: 6.7

Yield: 5.0

Momentum: 1.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Church & Dwight Co

A-Score: 4.9/10

Value: 2.7

Growth: 4.9

Quality: 6.9

Yield: 3.0

Momentum: 2.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Kenvue

A-Score: 4.5/10

Value: 4.1

Growth: 3.3

Quality: 6.1

Yield: 8.0

Momentum: 1.5

Volatility: 3.7

1-Year Total Return ->

View Full Report
Stock-Card
Estee Lauder

A-Score: 3.6/10

Value: 3.1

Growth: 1.7

Quality: 2.4

Yield: 2.0

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

101.31$

Current Price

101.31$

Potential

-0.00%

Expected Cash-Flows