Estée Lauder returns to growth in FY2026 as Japan gains value share in fragrance and makeup

The Estée Lauder Companies returned to sales growth in fiscal 2026, the year ended 30 June, the group said in results published 19 August: net sales rose 5% to $15.049bn on a reported basis, with organic net sales up 3% for the year and up 5% in the fourth quarter alone.

I am incredibly proud of our team for delivering fiscal 2026 results ahead of expectations.

So said Stéphane de La Faverie, president and chief executive, in the release. Category growth diverged sharply: fragrance was the standout, up 10% organically for the year, while skin care rose 4%; makeup was flat and hair care fell 1%, the company said.

By region, Asia/Pacific organic sales rose 4% for the year, with mainland China organic sales up 9%. Japan posted value-share gains in both the fourth quarter and the full year, the company said, driven by fragrance and makeup — a category split that runs opposite to the flat global makeup performance.

Travel retail splits between Korea, Hong Kong and mainland China

The company's Asia travel-retail business, a significant channel for its brands, moved in different directions by market. Korea travel retail benefited as retailers there shifted their strategies toward more profitable duty-free business models, the company said, while Hong Kong SAR travel retail grew on improved consumer traffic. Mainland China travel retail net sales declined, which the company attributed to "transitory pressure from the change in duty-free retailers servicing Beijing and Shanghai airports."

For the department-store beauty halls floortok tracks, the read here is less about the headline recovery than the category mix behind it. Estée Lauder's Japan gains are concentrated in fragrance and makeup rather than skin care — the category still recovering globally — which matters for counters built around the group's MAC, Clinique, Jo Malone and core Estée Lauder lines competing for space on Japanese department-store beauty floors. And the diverging travel-retail picture — Korea and Hong Kong rebounding while mainland China cools on an operator transition — is a reminder that Asian duty-free demand is shifting counter by counter and airport by airport, not moving as a single regional trend.

For fiscal 2027, de La Faverie said the company is "affirming our confidence to accelerate organic sales growth" while raising its outlook for adjusted operating margin — a target that will need fragrance's momentum to hold and makeup, in Japan if not yet globally, to keep gaining ground.