Aug 19 (Reuters) - Estee Lauder forecast annual profit above Wall Street estimates on Wednesday, betting on sustained demand for premium fragrances and strong performance in key market China, as gains from its CEO's turnaround strategy continue to build.
Shares of Clinique and M.A.C owner, whose merger conversations with Jean Paul Gaultier-owner Puig collapsed in May, rose nearly 7% in premarket trading after it also topped quarterly sales estimates.
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.
Estee said it has recorded a $38 million benefit in cost of sales from refunds received during the fiscal 2026 fourth quarter, which partially offset the full-year gross impact of incremental tariffs of $102 million, primarily recorded in cost of sales.
The company expects 2027 adjusted earnings per share in the range of $3.10 to $3.35, with its midpoint above analysts' average estimate 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.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shilpi Majumdar)
