Executive Summary
Estee Lauder Companies reported a cautious but improving start to QQ1 2026, with revenue of $3.481 billion, up 3.6% year-over-year and 2.2% quarter-over-quarter. The topline strength translated into a robust gross margin of 73.37% ($2.554 billion in gross profit), signaling sustained pricing power and favorable product mix across key brands. However, the company posted a modest operating income of $169 million and net income of $47 million, with an EBITDA of $395 million, underscoring that substantial SG&A and other operating costs continue to compress profitability at the margin.
Key Performance Indicators
QoQ: 2 012.50% | YoY:239.67%
QoQ: 108.61% | YoY:130.13%
QoQ: 108.61% | YoY:130.23%
Key Insights
Revenue: $3,481,000,000; YoY +3.57%; QoQ +2.17%; Gross Profit: $2,554,000,000; YoY +4.97%; QoQ +3.99%; Operating Income: $169,000,000; YoY +239.67%; QoQ +2012.50%; EBITDA: $395,000,000; EBITDARatio: 11.35%; Net Income: $47,000,000; YoY +130.13%; QoQ +108.61%; EPS: $0.13; YoY +130.23%; QoQ +108.61%....
Financial Highlights
Revenue: $3,481,000,000; YoY +3.57%; QoQ +2.17%; Gross Profit: $2,554,000,000; YoY +4.97%; QoQ +3.99%; Operating Income: $169,000,000; YoY +239.67%; QoQ +2012.50%; EBITDA: $395,000,000; EBITDARatio: 11.35%; Net Income: $47,000,000; YoY +130.13%; QoQ +108.61%; EPS: $0.13; YoY +130.23%; QoQ +108.61%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.48B |
3.57% |
2.17% |
| Gross Profit |
2.55B |
4.97% |
3.99% |
| Operating Income |
169.00M |
239.67% |
2 012.50% |
| Net Income |
47.00M |
130.13% |
108.61% |
| EPS |
0.13 |
130.23% |
108.61% |
Management Commentary
Note: The provided data contains no earnings call transcript. As a result, quotes from management are not available. Based on the results and press materials, themes likely to influence investor sentiment include: (a) margin resilience driven by a strong brand portfolio and pricing power, (b) ongoing emphasis on direct-to-consumer and premium-category growth, (c) ongoing working capital challenges contributing to negative operating cash flow, and (d) a structurally high debt load that constrains near-term cash flow generation. Future commentary would likely address progress on cost optimization, reinvestment in high-growth SKUs, and potential deleveraging signals.
Forward Guidance
There is no explicit forward guidance provided in the QQ1 2026 data. Based on the quarter’s results, investors should monitor: (i) trajectory of net revenue growth and potential acceleration from key categories (skincare, fragrance, premium makeup), (ii) operating leverage as SG&A remains a substantial expense line relative to revenue, (iii) cash flow dynamics including free cash flow trajectory and working capital management (accounts receivable and payable swings), and (iv) the pace of deleveraging given total debt of $9.004 billion and net debt of $6.785 billion. Management commentary in subsequent quarters will be pivotal to assessing whether the company can transition toward positive free cash flow and lower leverage while maintaining brand momentum.