Estée Lauder to cut 3,000 more jobs as CEO pushes overhaul

Some of the job cuts reflect Estée Lauder’s push to reduce staff at U.S. department stores, as CEO Stéphane de La Faverie aims to shift more sales online. Photo by Qilai Shen/Bloomberg

Article content

Article content

The owner of the La Mer and the Ordinary brands said Friday as many as 10,000 roles will now go, up from its previous target of 7,000 announced a year ago. Estée Lauder has a global workforce of about 57,000, according to its website.

Article content

Article content

Article content

Estée Lauder’s shares rose as much as 13 per cent. The stock had fallen 27 per cent this year, compared with a gain of about five per cent for the S&P 500 Index.

Article content

Article content

The results confirm that “the worst is in the rear view mirror as restructuring activities are bearing fruit, and the business is steadily moving in the right direction,” RBC Capital Markets analyst Nik Modi wrote in a research report.

Article content

Some of the job cuts reflect Estée Lauder’s push to reduce staff at United States department stores, as chief executive Stéphane de La Faverie aims to shift more sales online to faster-growth channels such as Amazon.com and TikTok Shop.

Article content

The CEO, who took over in January 2025, is trying to overhaul the conglomerate after three years of annual sales drops. With the latest job cuts, he will have as much as US$1.2 billion before taxes in annual savings to invest in the revamp.

Article content

Estée Lauder raised its profit outlook for the remainder of the fiscal year — a sign the turnaround is progressing — but gave no additional details about a proposed merger with Spanish beauty giant Puig Brands SA.

Article content

A company executive told analysts during a Friday morning conference call that it won’t “provide any further information ahead of an official announcement detailing an agreed upon transaction or a termination of discussions.”

Article content

Article content

The owner of the Tom Ford and Aveda brands expects adjusted earnings per share in the range of US$2.35 to US$2.45. That is above analyst estimates. In February, Estée Lauder guided for a range of US$2.05 to US$2.25.

Article content

Article content

Organic net sales growth is expected to be three per cent, the company said, which is at the high end of the range it provided in February.

Article content

Estée Lauder’s shares surged nearly 60 per cent in the year or so after De La Faverie — a longtime company insider — became CEO, buoyed by investor optimism that he was making headway turning around the cosmetics conglomerate.

Article content

But they have slumped in 2026, dragged down by results in February that disappointed investors and by the ongoing talks with Puig.

Article content

China Sales

Article content

For the next fiscal year, which runs to June 2027, Estée Lauder said it expects organic net sales to be in the range of three per cent to five per cent. Analysts expect 3.7 per cent.

Article content

It also said organic net sales in China rose six per cent in its latest quarter. Rivals L’Oréal SA, Procter & Gamble Co. and LVMH said in recent earnings reports their higher-end cosmetics had sold well there, raising expectations for Estée Lauder to show progress in a region where it has underperformed.