Opening the filing
Exhibit 99.1
Investors: Rainey Mancini rmancini@estee.com Media: Brendan Riley briley@estee.com THE ESTÉE LAUDER COMPANIES REPORTS FISCAL 2026 FIRST QUARTER RESULTS
Reaffirms Fiscal 2026 Outlook to Restore Positive Sales Growth and
Improve Operating Profitability New York, October 30, 2025 - The Estée Lauder Companies Inc. (NYSE: EL) today reported its financial results for the first quarter ended September 30, 2025.
“We had a strong start to fiscal 2026 as we execute on our Beauty Reimagined strategy—returning to organic sales growth, gaining prestige beauty share in a few key strategic areas of focus, and improving profitability. Encouragingly, we are building momentum across the organization from the significant operational changes we have executed to-date to be faster and more agile,” said Stéphane de La Faverie, President and CEO. “These results reinforce the confidence we have in our fiscal 2026 outlook—a pivotal year—as we restore organic sales growth and expand our operating margin for the first time in four years.”
FISCAL 2026 FIRST QUARTER SELECT FINANCIAL RESULTS (unaudited) 1,2,3
3 Adjusted Non-GAAP measures are calculated based on Net Sales adjusted only for Returns associated with restructuring and other activities.
Page 1 of 20
• As Reported Net sales increased 4% to $3.5 billion. Organic net sales increased 3%.
• As Reported Gross margin expanded 100 basis points, to 73.4% from 72.4% and Adjusted Gross margin expanded 60 basis points, to 73.3% from 72.7%, reflecting net benefits from the Company’s Profit Recovery and Growth Plan (“PRGP”)—driven by operational efficiencies, including a more competitive approach to procurement, along with reductions in promotional activity and excess and obsolescence. These benefits more than offset the unfavorable impacts of inflation and foreign exchange transactions.
• As Reported Operating margin was 4.9%, an expansion from (3.6)% in the prior year, which was unfavorably impacted by $159 million of aggregate charges associated with talcum litigation settlement agreements. Adjusted Operating margin expanded 300 basis points, to 7.3% from 4.3%, reflecting net benefits from the Company’s PRGP, which helped to reduce non-consumer-facing expenses and provided funding for consumer-facing investments 4 .
• Effective tax rate was 56.9%, compared with 13.3% in the prior year. Adjusted effective tax rate was 40.5%, compared with 38.8%.
• Diluted net earnings (loss) per common share increased to net earnings of $.13, compared with a net loss of $(.43) in the prior year. Adjusted diluted net earnings per common share increased to $.32, compared with $.14.
• For the three months ended September 30, 2025:
◦ Net cash flows used for operating activities decreased to $340 million, an improvement compared to $670 million in the prior year, primarily reflecting higher earnings and the favorable change in operating assets and liabilities.
• The increase in operating results in Mainland China, primarily due to the improvement in gross profit due to the increase in net sales, partially offset by an unfavorable year-over-year impact associated with the recognition of local government subsidies in the prior year.
• The decline in operating income in EUKEM, reflecting the increase in consumer-facing investments to support key activations and targeted expanded consumer reach, offset by higher net sales.
QUARTERLY DIVIDEND Today, the Company announced a quarterly dividend of $.35 per share on its Class A and Class B Common Stock, payable in cash on December 15, 2025 to stockholders of record at the close of business on November 28, 2025.
Page 9 of 20 PROFIT RECOVERY AND GROWTH PLAN (“PRGP”)
Actions under the Company’s PRGP are expected to be substantially completed in fiscal 2027, with a majority of the full run-rate benefits expected to be realized during fiscal 2027. The plan is designed to further transform the Company’s operating model to fund a return to sales growth in fiscal 2026 and restore a solid double-digit adjusted operating margin over the next few years, and continue to mitigate impacts from external volatility.
Through September 30, 2025, the Company has recognized total cumulative charges under the restructuring component of the PRGP of $697 million, consisting primarily of employee-related costs, with approximately $87 million recognized in the fiscal 2026 first quarter.
Through October 26, 2025, the Company has approved initiatives totaling cumulative charges of $852 million and a net reduction of over 4,000 positions. Inclusive of approvals through October 26, 2025 and relative to the high end of the total expected ranges, the Company has approved initiatives that account for over 70% of the expected gross benefits, over 50% of the expected charges and nearly 60% of the expected net reduction in positions.
OUTLOOK FOR FISCAL 2026 FULL YEAR The Company reaffirms its fiscal 2026 full-year outlook.
The Company continues to closely monitor evolving trade policies and enacted tariffs, and its task force has been actively evaluating developments and mitigation strategies to reduce the potential impacts of tariffs. The Company has implemented a range of actions, including leveraging available trade programs and further optimizing its regional manufacturing footprint to bring production closer to the consumer—including through its facility in Japan. These efforts, combined with increased supply chain agility, are helping to offset more than half of the expected impacts and better position the Company to adapt quickly as trade policies continue to evolve.
Page 10 of 20 In terms of enacted tariffs, the Company’s assumption reflects the following incremental rates on its most material flow of goods:
As Reported - GAAP 2% - 5%
Impact of foreign currency translation Returns associated with restructuring and other activities (1)
Organic, Non-GAAP 0% - 3% (F) Represents forecast, using spot rates as of September 30, 2025.
(1) The net sales growth impact of returns associated with restructuring and other activities includes approvals to date. Additional returns associated with restructuring and other activities are anticipated as initiatives are approved in fiscal 2026.
Page 11 of 20 Reconciliation between GAAP and Non-GAAP - Diluted Net Earnings (Loss) Per Common Share (“EPS”)
2025
Growth
Forecasted/As Reported EPS - GAAP $1.39 - $1.65 (3.15)
100+%
Non-GAAP Restructuring and other charges (1)