On Wednesday, August 20, US cosmetics group Estée Lauder announced a heavy loss of $546 million in the fourth quarter of its 2025 fiscal year, compared with a net loss of $286 million in the same period last year.
Restructuring plan
The group attributes these results to the restructuring plan announced in February.
The final cost is expected to be between $1.2 billion and $1.6 billion before taxes, enabling the company to generate an additional gross profit of $800 million to $1 billion per year and restore its operating margin. As of June 30, $610 million had already been spent, mainly on layoffs.
The Estée Lauder Companies plans to cut between 5,800 and 7,000 jobs worldwide, of which more than 3,200 had already been identified as of August 13. The group has more than 46,000 employees, according to its website.
Travel retail collapse
Over one year, sales are down 8% to $14.326 billion, declining in all geographic regions.
Skin care sales fell 12%, hair care dropped 10% and makeup fell 6%. While sales of fragrances remained stable year-on-year, this is also a poor performance in a largely upward-trending market.
CEO Stéphane de la Faverie, speaking at a conference with analysts, pointed out that nearly two-thirds of the decline in revenue was due to the drop in travel retail sales (duty-free), which fell by 28% year-on-year.
This segment now accounts for around 15% of the group’s business, four percentage points less than the previous year and fourteen less than the peak in fiscal year 2021.
Online sales, on the other hand, jumped 31% to a record high, Mr. de la Faverie noted.
Return to growth and price increases in 2026
For fiscal year 2026, the group anticipates a return to growth, with revenue (excluding exceptional items) projected to rise by less than 5% across all markets, except mainland China, where it is expected to increase by around 5%.
In addition, Stéphane de la Faverie estimated the impact of the new tariffs as known on August 13 at approximately $100 million for fiscal year 2026. The CEO plans to adjust prices to offset this additional cost.
