The Estée Lauder Companies (ELC) reported continued second-quarter momentum, driven by a rebound in China sales, and raised select elements of its 2026 guidance.

From October to the end of December, the U.S. cosmetics group (which owns brands such as La Mer, Clinique, Jo Malone, MAC, Kilian Paris, The Ordinary, and Bobby Brown) reported a 6% increase in sales to USD 4.23 billion, exceeding the consensus forecast of analysts surveyed by Bloomberg.

Its net profit for the period was USD 162 million, compared with a loss of USD 590 million a year earlier. At that time, it had been weighed down by a significant charge related to the acquisition of the Tom Ford brand.

On an adjusted per-share basis excluding exceptional items — the metric most closely watched by markets — earnings came in at 89 cents, up 43% year on year and above Wall Street expectations.

The cosmetics giant, which had suffered from sluggish consumption last year, particularly in China, began to recover in its first quarter.

The trend continued in mainland China in the second quarter, with the Estée Lauder group seeing its sales in the country climb 13% year-on-year to USD 928 million, and local consumers showing strong interest in the La Mer, Tom Ford, and Le Labo brands.

In Europe, the United Kingdom, and emerging markets, the trend was also positive over the period (+9% to USD 1.2 billion), particularly for fragrances.

Sales were stable in the Americas (+1% to USD 1.2 billion), as they were in Asia-Pacific (+1% to USD 900 million).

The group highlighted its restructuring efforts launched a year ago and confirmed plans to reduce its workforce by 5,800 to 7,000 roles by the end of 2026.

ELC also said it expects organic sales growth of 1% to 3% in 2026, with adjusted earnings per share (excluding exceptional items) of of USD 2.05 to USD 2.25, up from the previously announced USD 1.90 to USD 2.10.

The group expects its operating margin to reach between 9.8% and 10.2% in 2026, though it cautioned that margins will be weighed down by about 50 basis points in the third quarter due to investments and customs duties, which it continues to estimate at roughly USD 100 million.