Estée Lauder raises profit outlook, adds 3,000 layoffs as sales beat estimates

Estée Lauder is betting that a stronger sales recovery can coexist with a smaller payroll. The company raised its annual profit outlook on Friday and said it would eliminate as many as 3,000 additional jobs worldwide, deepening a restructuring that could ultimately cut 9,000 to 10,000 roles and reshape one of the best-known names in prestige beauty.

The message from the latest quarter was mixed but encouraging for investors. Estée Lauder reported fiscal third-quarter net sales of $3.71 billion for the period ended March 31, 2026, slightly ahead of Wall Street expectations of about $3.69 billion. Shares rose in premarket trading after the results, which also pointed to improving demand in China and Europe, two regions that have been central to the broader luxury and cosmetics rebound.

Underlying momentum was most visible in fragrance, where the company said organic sales grew by double digits in the first nine months of fiscal 2026. Three of Estée Lauder’s four geographic regions posted growth over the same period, while Mainland China delivered high single-digit growth and gained share in prestige beauty. Those gains matter because they suggest the company is finding traction in some of the world’s most important beauty markets even as consumer spending remains uneven.

The new layoffs show how much of the turnaround still depends on cost discipline. Bloomberg reported that the latest round of restructuring could generate another $200 million in savings, building on a plan first announced a year ago that targeted 7,000 job cuts. With about 57,000 employees globally as of June 30, 2025, the upper end of the new target would amount to roughly 17.5 percent of the workforce.

The restructuring sits inside Beauty Reimagined, Estée Lauder’s strategy launched in February 2025 to restore sustainable sales growth and lift profitability. Chief executive Stéphane de La Faverie has framed the effort as a move toward a more consumer-centric, more efficient company, and the latest guidance suggests management believes the plan is starting to work. On May 1, 2026, Estée Lauder said it was sharing a preliminary fiscal 2027 view calling for organic net sales growth of 3 percent to 5 percent and an adjusted operating margin of 12.5 percent to 13.0 percent.

The company is also considering broader strategic changes. Discussions about a possible merger with Puig, owner of Jean Paul Gaultier, point to a portfolio rethink that could go beyond cost cuts. For Estée Lauder, the quarter underscored a larger truth about the beauty business: growth is returning, but unevenly, and the companies best positioned to win are those that can defend margins while the market remains patchy.