economy

February 5, 2026

Estée Lauder expects $100 million tariff hit to full-year profitability; stock sinks more than 20%

Estée Lauder said in its fiscal second-quarter earnings report that it's expecting its full-year profitability to take a $100 million hit from tariff impacts.

Estée Lauder expects $100 million tariff hit to full-year profitability; stock sinks more than 20%

TL;DR

  • Estée Lauder expects a $100 million impact on full-year profitability due to tariffs.
  • The company's stock dropped approximately 20% following the announcement.
  • Estée Lauder is implementing a "Beauty Reimagined" turnaround plan costing between $1.2 billion and $1.6 billion.
  • The restructuring includes a net workforce reduction of 5,800 to 7,000 employees.
  • Mitigation strategies like leveraging trade programs and optimizing manufacturing have offset over half of the expected tariff impacts.
  • Tariff headwinds are mostly anticipated in the second half of the fiscal year.
  • Assumed tariff rates in Switzerland, Canada, China, Mexico, the EU, and Japan were factored into the calculation.
  • The company is exploring further cost-offsetting strategies, including potential pricing actions.
  • Estée Lauder is raising its fiscal outlook due to strong first-half performance.
  • CEO Stéphane de La Faverie expressed confidence in the turnaround and the restoration of organic sales growth and operating margin expansion.

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