Shares of Clinique and M.A.C owner, whose merger talks with Jean Paul Gaultier-owner Puig (PUIGb.MC) collapsed in May, rose nearly 8% in premarket trading after it also topped quarterly sales expectations.
Resilient spending by affluent and younger customers, especially on trendy items, has helped boost demand for the cosmetics maker's luxury fragrances and skincare products such as Le Labo and Balmain Beauty.
To sustain that momentum, Estee has accelerated premium product launches, streamlined supply chain and ramped up investments in innovation and marketing under CEO Stephane de La Faverie's "Beauty Reimagined" strategy.
Its luxury fragrance brands Le Labo and Tom Ford drove 10% growth in net sales during the fourth quarter. Le Labo's classic collection, which sells 50 milliliter perfumes for $250, benefited from increased distribution channels and targeted shopper expansion.
Estee also said it has recorded a $38 million benefit in cost of sales from refunds received during the fourth quarter of fiscal 2026, which partially offset the full-year gross impact of incremental tariffs of $102 million, primarily recorded in cost of sales.
The refunds helped the company to counter disruptions stemming from the Middle East conflict, which had a dilutive impact to fiscal 2026 net earnings per share.
Estee expects fiscal 2027 adjusted earnings per share in the range of $3.10 to $3.35, with its midpoint above analysts' estimates of $3.18, according to data compiled by LSEG.
Its fourth-quarter sales of $3.63 billion were also ahead of the estimate of $3.54 billion.
