Estee Lauder gains after boosting guidance ahead of the holiday season

Estee Lauder (EL) traded higher in early action on Monday after beating the consensus estimates of analysts with its fiscal first-quarter earnings report.

Sales rose 7% to $3.7B during the quarter. Organic sales were up 6%. The cosmetics giant noted that growth is accelerating, profitability is strengthening significantly, and the impact of beauty reimagined is becoming increasingly evident across its business.

During FQ1, Estee Lauder (EL) noted that it expanded online consumer coverage on Amazon (AMZN), reaching 13 brands across 17 markets, and on TikTok Shop (TIKTOK), now with 15 brands across 11 markets.

Adjusted gross margin expanded 240 basis points to 75.7% of sales. The margin improvement was tied to net benefits from cost and operational efficiencies enabled through Estee Lauder's (EL) Profit Recovery and Growth Plan, sales leverage, and the net benefit of strategic pricing actions, which collectively offset inflation. The PRGP benefits included procurement savings, expense optimization, and manufacturing efficiencies. Estee Lauder's (EL) adjusted operating margin was up to 12.1% from 7.3% a year ago. Non-GAAP EPS of $0.72 was reported to sail past the consensus estimate of $0.51 and last year's mark of $0.32.

"We are bringing more breakthrough innovation to consumers, amplifying the desirability of our brands with bold, high-impact campaigns, and building a faster, more agile organization that is converting momentum into stronger financial performance," highlighted CEO Stéphane de La Faverie. "The energy and determination of our teams, combined with the strength of our brands and the progress of our transformation, give me greater confidence than ever in the opportunities that lie ahead. We are raising our fiscal 2027 outlook, reflecting both our strong start and our conviction in the future we are creating," he added.

Looking ahead, Estee Lauder (EL) sees FY27 organic net sales growth of 4.0% to 5.5%, an increase from its prior outlook, and adjusted diluted earnings per share to range between $3.20 to $3.45 (midpoint $3.325) vs. $3.33 consensus.

Shares of Estee Lauder (EL) were up 2.5% in premarket trading to $111.99 vs. the 52-week range of $66.22 to $121.64.