In this photo illustration the Estee Lauder Companies Inc. logo seen displayed on a smartphone with the Estee Lauder Companies Inc. logo in the background.
Thiago Prudencio | Light flare | Getty Images
Estée Lauder said Thursday it expects a $100 million decline in full-year profitability due to tariff impacts.
Shares of the beauty company fell about 20% on Thursday.
The company is currently in the midst of a turnaround plan, dubbed “Beauty Reimagined,” which is expected to cost between $1.2 billion and $1.6 billion and aims to revitalize its growth. In its second-quarter financial results report released Thursday, the company said it still expects net headcount reductions of 5,800 to 7,000 people as part of its restructuring.
Estée Lauder said it was “actively evaluating developments and mitigation strategies” to reduce tariff impacts. The company said it leveraged its trade programs, optimized its regional manufacturing footprint and increased supply chain agility, all of which offset more than half of the expected impacts.
The company said it expects tariff barriers to impact profitability primarily in the second half. As part of its calculation, it also identified assumed tariff rates in Switzerland, Canada, China, Mexico, the European Union and Japan, where it has facilities.
Nonetheless, Estée Lauder said it continues to monitor active pricing situations and is working to implement other strategies to further offset these costs, including “potential pricing actions.”
The company also announced it was raising its fiscal outlook after strong first-half performance, while saying it would remain cautious about the macroeconomic environment.
“In this pivotal year, Beauty Reimagined has reinvigorated our business as we deliver the largest operational, leadership and cultural transformation in our history,” CEO Stéphane de La Faverie said in a statement. “On its first anniversary, we are raising our outlook for fiscal 2026, confident in the strength of our turnaround, even as our second half reflects previously expected headwinds and now greater consumer-facing investments, as we plan to restore organic sales growth and increase our operating margin for the first time in four years.
Correction: Stéphane de La Faverie is CEO of Estée Lauder. An earlier version misspelled his name.