Net sales for its fiscal Q2, which ended December 31, 2025, increased 6% to $4.23 billion and reflected organic growth of 4%. The company reported operating income of $401 million, compared with a loss in the prior-year quarter.
“We delivered excellent second quarter results to solidify a strong first half of fiscal 2026,” Stéphane de La Faverie, president and CEO of The Estée Lauder Companies (ELC) said in the company’s earnings report, adding that it had been a “pivotal year” thanks to its Beauty Reimagined strategy.
Margins improved during the quarter, with adjusted operating margin rising to 14.4% from 11.5% a year earlier. ELC pointed to procurement changes, inventory management and lower non-consumer-facing costs as contributors in its earnings report, and noted that tariffs and inflation continued to pressure costs, particularly on imported goods - the company said it continues to expect tariff-related impacts to reduce fiscal 2026 profitability by about $100 million, primarily in the second half of the year.
Skin care and fragrance lead category performance
Skin care accounted for the largest share of sales. Organic net sales in the category increased 6%, supported by La Mer, Estée Lauder and The Ordinary.
Fragrance posted similar growth, also up 6%, led by TOM FORD, Le Labo and KILIAN PARIS.
In mainland China, the company reported a second consecutive quarter of double-digit retail sales growth for the fragrance category, noting that results were “driven by every category, led by La Mer, TOM FORD, and Le Labo,” according to the earnings report.
Hair care returned to growth, with organic net sales increasing 5%, supported by distribution expansion.
However, organic net sales of colour cosmetics declined slightly compared with last year, which the company attributed largely to timing related to the upcoming reformulation of its Double Wear foundation.
Regional highlights include China & US
Mainland China remained a bright spot, with the company citing strong holiday demand and online sales during major shopping events.
In the United States, Estée Lauder reported volume share gains in total prestige beauty, with strength in skin care and hair care. Specifically, the company noted that “Clinique and The Ordinary drove the Company’s value share gains in Skin Care, ranking #1 and #2 brands in the category, respectively.”
Fragrance continued to perform through direct-to-consumer channels, with the company reporting that “in direct-to-consumer, Fragrance rose mid-single-digits,” while Le Labo gained value share.
“We expect to restore organic sales growth and expand our operating margin for the first time in four years,” de La Faverie said.
Expansion on Amazon & TikTok Shop
During the quarter, ELC continued to expand consumer reach across platforms and retail formats. Specifically, the firm reported ongoing expansion on Amazon and TikTok Shop: continued expansion on “Amazon from October 2025 through January 2026...to 12 brands across 10 markets, [and on] TikTok Shop from October 2025 through January 2026, bringing the total portfolio to 12 brands across seven markets.”
It also highlighted plans to broaden specialty-multi distribution, announcing “M·A·C’s planned March 2026 launch in select U.S. Sephora locations as well as online and in Sephora at Kohl’s,” according to the earnings report.
In fragrance, ELC said it opened nine net new freestanding stores globally during the quarter, led by Jo Malone London and Le Labo.
Following the quarter, Estée Lauder Companies raised its fiscal 2026 outlook and now expects organic net sales growth of 1% to 3% for the full year.
