Today, The Estée Lauder Companies Inc. reported its financial results for the fiscal year ended June 30, 2025, with net sales decreasing by 8% to $14.33 billion. Stéphane de La Faverie, President and CEO, said the company closed the year as expected and remains focused on executing its Beauty Reimagined strategy, designed to restore growth and deliver a double-digit adjusted operating margin over the next few years. Despite volatility in the external environment, the company entered fiscal 2026 with early signs of momentum, aiming to return to organic sales growth after three years of decline.
In Skin Care, net sales fell 12%, largely due to weakness in Estée Lauder and La Mer, particularly within the company’s Asia travel retail business. Subdued Chinese consumer sentiment, lower conversion rates, and retailer strategy shifts toward more profitable duty-free models in Korea and mainland China weighed heavily on results. The difficult comparison to the prior year, when replenishment orders resumed, further pressured growth.
Estée Lauder also experienced declines in mainland China amid challenging market conditions, while La Mer showed recovery in the second half of the year thanks to successful launches such as The Night Recovery Concentrate and The New Balancing Treatment Lotion. The Ordinary delivered mid-single-digit growth, supported by expanded reach through Amazon’s U.S. Premium Beauty Store and continued innovation. In the fourth quarter, Estée Lauder recorded $375 million in intangible asset impairment charges related to Dr.Jart+, reflecting underperformance in Korea and mainland China.
Makeup net sales decreased 6% recording $4.25 billion, with M·A·C declining in the face category due to retail softness, which led to elevated inventory and destocking. New launches like the M·A·C Nudes Collection and Sleek Satin Lipstick helped, but not enough to offset weakness. Estée Lauder makeup also declined, reflecting ongoing pressure in Asia travel retail despite sequential improvements late in the year, even as new products such as Double Wear Stay-in-Place Concealer and Matte Powder Foundation gained traction.
Too Faced and Bobbi Brown reported declines, particularly in face, lip, and eye categories, while Clinique grew across all regions with innovation such as Even Better Clinical Vitamin Makeup and expansion of the Almost Lipstick franchise, supported by strong performance in Amazon’s U.S. Premium Beauty Store. An additional $50 million impairment was recorded for Too Faced in the fourth quarter, reflecting weakness in The Americas.
Fragrance sales were flat for the year with $2.49 billion, supported by mid-single-digit growth in luxury brands led by Le Labo, which posted strong double-digit growth from its Classic Collection and City Exclusives, bolstered by launches like Eucalyptus 20 and Osmanthus 19. KILIAN PARIS also contributed to growth, but this was offset by weakness in TOM FORD fragrances, which struggled in North America, as well as declines in Estée Lauder’s Pleasures and Beautiful lines and Clinique’s Happy franchise.
Hair Care net sales decreased 10% with $565 million, led by Aveda’s softness in brick-and-mortar and the closure of freestanding stores, though online growth, including its launch in Amazon’s U.S. Premium Beauty Store in the fourth quarter, provided partial relief. Bumble and bumble also fell due to weakness in salon and specialty-multi channels, despite online gains. The Ordinary contributed to the decline in this segment as well. Nonetheless, Hair Care operating results improved on disciplined expense management and lower cost of sales.
By region, the Americas declined 3% to $4.41 billion, reflecting softness in North American retail that was partially offset by new brand distribution on Amazon’s U.S. Premium Beauty Store. EMEA fell 13% to $5.38 billion, pressured by ongoing weakness in travel retail and subdued Chinese consumer demand. Asia/Pacific was down 7% to $4.54 billion, driven by softness in mainland China, Korea, and Hong Kong SAR, along with lower travel retail replenishment orders, including the strategic exit of Dr.Jart+ from duty-free channels.
To strengthen its long-term position, Estée Lauder expanded its restructuring under the PRGP, targeting a reduction of 5,800 to 7,000 jobs with related charges of $1.2 billion to $1.6 billion. The initiative, which includes reorganization, process simplification, outsourcing, and evolving go-to-market strategies, is expected to generate annual savings of $800 million to $1 billion, enabling reinvestment into growth-driving initiatives. Despite reporting an operating loss of $785 million in fiscal 2025, the company reiterated its confidence in fiscal 2026, with plans to achieve a return to organic sales growth and begin rebuilding operating profitability, even as tariff-related headwinds of approximately $100 million are expected.
