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Can EL's Beauty Reimagined Strategy Revive Long-Term Growth?
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Key Takeaways
EL posted 2% organic sales growth and 360-bps adjusted operating margin expansion in Q3.
Estee Lauder saw double-digit online sales growth from Amazon, TikTok Shop and Sephora in Q3.
EL is simplifying operations and reducing non-consumer-facing costs under its Profit Recovery and Growth Plan.
The Estee Lauder Companies Inc.’s (EL - Free Report) Beauty Reimagined strategy is showing early traction, with management positioning fiscal 2026 as a pivotal year for restoring growth and expanding margins. In the third quarter of fiscal 2026, Estee Lauder delivered 2% organic sales growth alongside a 360-basis-point expansion in adjusted operating margin, reflecting early success from its broad transformation efforts.
At the center of the strategy is Estee Lauder’s effort to modernize consumer reach and improve execution across channels, innovation and operations. The company has accelerated expansion on platforms like Amazon Premium Beauty, TikTok Shop and Douyin while increasing specialty-multi exposure through M·A·C’s U.S. Sephora rollout. These initiatives helped drive double-digit online organic sales growth in the fiscal third quarter.
Innovation has also become a more focused growth lever under Beauty Reimagined. Strong momentum in fragrance, which grew double digits in the quarter, was fueled by launches from Le Labo, TOM FORD, KILIAN PARIS and BALMAIN Beauty. Meanwhile, Estee Lauder’s revamped Double Wear foundation and La Mer’s eye-care innovation supported share gains in key markets such as Mainland China and the United States.
Importantly, the strategy is not solely growth-oriented. Estee Lauder is restructuring its operating model to improve efficiency and fund reinvestment in high-return areas. Through its Profit Recovery and Growth Plan, the company is reducing non-consumer-facing expenses, simplifying operations and increasing digital capabilities through partnerships with Shopify, Accenture and WPP.
Management now expects fiscal 2026 to be a pivotal year for the company, marked by the restoration of organic sales growth and its first operating-margin expansion in four years. While macroeconomic and geopolitical risks remain, Beauty Reimagined appears to be creating a more agile, digitally focused and consumer-centric operating model for Estee Lauder.
Shares of this Zacks Rank #1 (Strong Buy) company have gained 20.1% in the past month compared with the broader Consumer Staples sector and the industry’s growth of 4.7% and 15.3%, respectively. EL has also outperformed the S&P 500 index’s growth of 5.8% during the same period.
EL Stock's Past Month Performance
Image Source: Zacks Investment Research
Is Estee Lauder a Value Play Stock?
EL currently trades at a forward 12-month P/E ratio of 29.21 compared with the industry average of 23.24. This valuation places the stock at a premium relative to peers, indicating broader market expectations around its business stability and ability to navigate current cost and demand dynamics.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 8.3% and 24.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 28.9%, on average.
The Vita Coco Company, Inc. (COCO - Free Report) develops, manufactures, markets and distributes coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa and the Asia Pacific. COCO currently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 11.7%, on average.
The Zacks Consensus Estimate for Vita Coco’s 2026 sales and earnings indicates growth of 21.4% and 47.9%, respectively, from the year-ago reported numbers.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company worldwide. It operates through four segments: Beef, Pork, Chicken and Prepared Foods. TSN currently carries a Zacks Rank #2 (Buy). TSN delivered a trailing four-quarter earnings surprise of 18.1%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales and earnings indicates growth of 4.5% and 0.5%, respectively, from the year-ago reported numbers.
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Can EL's Beauty Reimagined Strategy Revive Long-Term Growth?
Key Takeaways
The Estee Lauder Companies Inc.’s (EL - Free Report) Beauty Reimagined strategy is showing early traction, with management positioning fiscal 2026 as a pivotal year for restoring growth and expanding margins. In the third quarter of fiscal 2026, Estee Lauder delivered 2% organic sales growth alongside a 360-basis-point expansion in adjusted operating margin, reflecting early success from its broad transformation efforts.
At the center of the strategy is Estee Lauder’s effort to modernize consumer reach and improve execution across channels, innovation and operations. The company has accelerated expansion on platforms like Amazon Premium Beauty, TikTok Shop and Douyin while increasing specialty-multi exposure through M·A·C’s U.S. Sephora rollout. These initiatives helped drive double-digit online organic sales growth in the fiscal third quarter.
Innovation has also become a more focused growth lever under Beauty Reimagined. Strong momentum in fragrance, which grew double digits in the quarter, was fueled by launches from Le Labo, TOM FORD, KILIAN PARIS and BALMAIN Beauty. Meanwhile, Estee Lauder’s revamped Double Wear foundation and La Mer’s eye-care innovation supported share gains in key markets such as Mainland China and the United States.
Importantly, the strategy is not solely growth-oriented. Estee Lauder is restructuring its operating model to improve efficiency and fund reinvestment in high-return areas. Through its Profit Recovery and Growth Plan, the company is reducing non-consumer-facing expenses, simplifying operations and increasing digital capabilities through partnerships with Shopify, Accenture and WPP.
Management now expects fiscal 2026 to be a pivotal year for the company, marked by the restoration of organic sales growth and its first operating-margin expansion in four years. While macroeconomic and geopolitical risks remain, Beauty Reimagined appears to be creating a more agile, digitally focused and consumer-centric operating model for Estee Lauder.
Estee Lauder’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #1 (Strong Buy) company have gained 20.1% in the past month compared with the broader Consumer Staples sector and the industry’s growth of 4.7% and 15.3%, respectively. EL has also outperformed the S&P 500 index’s growth of 5.8% during the same period.
EL Stock's Past Month Performance
Image Source: Zacks Investment Research
Is Estee Lauder a Value Play Stock?
EL currently trades at a forward 12-month P/E ratio of 29.21 compared with the industry average of 23.24. This valuation places the stock at a premium relative to peers, indicating broader market expectations around its business stability and ability to navigate current cost and demand dynamics.
EL P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Other Stocks to Consider
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 8.3% and 24.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 28.9%, on average.
The Vita Coco Company, Inc. (COCO - Free Report) develops, manufactures, markets and distributes coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa and the Asia Pacific. COCO currently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 11.7%, on average.
The Zacks Consensus Estimate for Vita Coco’s 2026 sales and earnings indicates growth of 21.4% and 47.9%, respectively, from the year-ago reported numbers.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company worldwide. It operates through four segments: Beef, Pork, Chicken and Prepared Foods. TSN currently carries a Zacks Rank #2 (Buy). TSN delivered a trailing four-quarter earnings surprise of 18.1%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales and earnings indicates growth of 4.5% and 0.5%, respectively, from the year-ago reported numbers.