Estee Lauder raises its annual outlook as luxury fragrance lifts sales and it cuts promotions

Estee Lauder reported better-than-expected earnings and raised its outlook on Monday². The company lifted its annual sales and profit forecasts as luxury fragrance drove sales ahead of the holidays¹⁰.

The results covered the first quarter of fiscal 2027 and were released on Monday^6,7. The company raised its full-year forecast after a strong first quarter¹², with the beat attributed to fragrance growth¹⁵. Sales grew 7% while costs barely moved, and the margin gains drove a jump in profit^13,14.

The company is cutting promotions and ramping up brand investment^1,5, a combination that coincided with fragrance demand powering the quarter⁸. Its first-quarter performance was stronger than expected¹⁶, and the raised outlook came as fragrance demand powers its turnaround⁸.

Why it matters to investors

Chief executive Stéphane de La Faverie said on Monday that the impact of the company’s strategy, dubbed Beauty Reimagined, had become “increasingly evident”³. The results were presented as evidence that the turnaround is bearing fruit⁴.

The shift away from promotions toward brand investment¹ comes alongside sales growth of 7% with costs that barely moved¹⁴. Management said its approach “creates flexibility to invest for growth while expanding profitability”¹¹.

Fragrance is the engine. Luxury fragrances helped lift the outlook¹, and the chief executive said of surging fragrance sales that “consumers are getting younger”⁹. Those are the company’s own descriptions of its customer base and strategy^3,9.

The results also arrived in a crowded week for markets. Futures rose before the opening on Monday as investors braced for earnings and the midterms, with Estee Lauder’s stronger-than-expected quarter among the corporate news¹⁶.

What to watch

The first marker is the holiday season, which the raised targets are set against, with luxury fragrance leading sales into it¹⁰.

A second is whether cutting promotions¹ holds sales growth while protecting the margin gains that drove the quarter^13,14.

A third is how far the stock reflects the change. The quarter was described as the company finally moving past recovery mode³, after a quarter in which the outlook was raised on fragrance growth¹⁵. A further marker is how the company deploys the extra brand investment it has announced^1,5.