Global cosmetics giant Estée Lauder raised its full-year profit forecast on Friday, May 1st, and announced plans to expand its global workforce reduction target to up to 10,000 employees. Despite facing restructuring pressures, the company’s latest quarterly sales slightly exceeded analysts’ expectations.
Data showed that Estée Lauder’s net sales for the third quarter increased by 5%, reaching $3.71 billion. Adjusted earnings per share were at 88 cents, surpassing analysts’ expectations of 65 cents.
As part of its “Profit Recovery and Growth Plan,” Estée Lauder has increased its workforce reduction target from the previous 5,800 to 7,000 employees to a significant 9,000 to 10,000 employees.
Over 70% of the job cuts will be concentrated in sales positions at department stores and independent retail locations. This reflects the company’s acceleration, under the leadership of CEO Stéphane de La Faverie, in shifting from traditional retail to faster-growing online channels like Amazon.
The company expects the restructuring plan to generate total savings of up to $1.2 billion. As of the end of June 2025, Estée Lauder had approximately 57,000 employees worldwide.
The fastest-growing category for the company this quarter was fragrances, with organic net sales increasing by 10%, mainly attributed to contributions from luxury brands like Le Labo and TOM FORD.
Estée Lauder reported an $84 million provision this time for loss, intended for settlement of securities class action litigation in the Southern District Federal Court of New York in the United States.
The lawsuit alleges that Estée Lauder concealed from investors its excessive reliance on the “Gray Market” sales in China during the COVID-19 pandemic. Plaintiffs claim that the company failed to disclose the true inventory backlog and slowing demand risks it faced in China at that time, leading to significant stock price fluctuations once the truth was revealed.
Estée Lauder warned that the current optimistic guidance is based on geopolitical stability. If tariff pressures, geopolitical conflicts, and Middle East tensions worsen after May 2026, it could threaten financial forecasts.
The company anticipates that even with mitigation measures, tariffs could impact profit for the 2026 fiscal year by approximately $160 to $180 million.
Encouraged by positive performance and restructuring plans, Estée Lauder’s stock price surged around 11% in pre-market trading on Friday.
(This article was referenced from reports by Reuters and Bloomberg.)