Estee Lauder Companies Inc (NYSE:EL, XETRA:ELAA) shares jumped more than 15% on Wednesday after the beauty group posted fourth-quarter results that beat Wall Street estimates and raised its profit margin outlook for fiscal 2027.
The company reported revenue of $3.6 billion for its fiscal fourth quarter, up 6% year-over-year and ahead of analyst estimates of $3.54 billion. Adjusted earnings per share came in at $0.39, double the year-ago figure, while adjusted operating income rose 95% to $267 million.
Organic net sales climbed 5% in the quarter to $3.6 billion, and gross margin reached 75.5%.
By category, skin care revenue rose 9% to $1.9 billion and fragrance grew 10% to $618 million. Makeup revenue increased 3% to $1 billion, while hair care slipped 1% to $140 million.
For fiscal 2027, Estée Lauder guided adjusted EPS of $3.10 to $3.35, above the consensus estimate of $3.18. The company reaffirmed its organic net sales growth outlook of 3% to 5% and raised its adjusted operating margin guidance to a range of 12.7% to 13.5%, up from a prior forecast of 12.5% to 13%.
According to Jefferies, management expects makeup to return to growth in fiscal 2027 after trailing estimates in the fourth quarter, while skin care and fragrance came in above expectations. The bank noted that travel retail trends are improving heading into the new fiscal year and that the company does not expect the Middle East conflict to materially affect fiscal 2027 results.