Estee Lauder forecasts annual profit above estimates on strong China demand

On Wednesday, Estee Lauder forecasted an annual profit that surpasses Wall Street's expectations, anticipating continuous demand for premium fragrances and strong performance in China, the key market. The company's rise is credited to the progress of its CEO's turnaround strategy. Following the announcement, shares of Clinique and M.A.C, the owner of which had discussions with Puig, soared nearly 7% in the premarket trading after outperforming quarterly sales estimates.

Estee Lauder's success can be attributed to the sustained spending by affluent and younger customers, especially on trendy items such as skincare products from Le Labo and Balmain Beauty. To maintain this momentum, the company has accelerated premium product launches, optimized supply chain, and increased investments in innovation and marketing under the guidance of CEO Stephane de La Faverie's Beauty Reimagined strategy.

Estee Lauder reported a $38 million benefit in costs from refunds received during the fiscal 2026 fourth quarter, which partially counterbalanced the full-year gross impact of $102 million in incremental tariffs, primarily recorded in the cost of sales. The company anticipates adjusted earnings per share of $3.10 to $3.35 for 2027, which is slightly above analysts' average estimate of $3.18. The fourth-quarter sales of $3.63 billion also exceeded the estimated $3.54 billion.