The news: Estée Lauder topped analysts’ profit and revenue expectations, aided by sales and market share gains in China and customer growth in the US. The parent of brands such as Clinique, Tom Ford, and Aveda said its results marked the start of its return to growth under a turnaround plan.

By the numbers: Profit was $47 million, or 13 cents a share, for the fiscal Q1 ended September 30, against a year-earlier loss of $156 million, or 43 cents a share. Adjusted for items, profit was 32 cents a share, higher than the 18 cents expected by analysts.

Sales rose 4% to $3.48 billion, ahead of the $3.38 billion analyst estimate.

• By region, sales rose 9% in China, with broad-based growth at several brands. The company said it is gaining share both online and in physical retail.
• Sales increased 8% in Asia-Pacific and 4% in Europe and emerging markets.
• Though Americas sales fell 2%, the company said “entry prestige” products with more affordable price points helped attract new customers.
• Across product categories, fragrances had the strongest performance, with sales up 14%, while skincare, the largest single category, grew 3%. Quarterly sales fell 1% in makeup and 7% in hair care.

The company stood by a prior full-year outlook calling for low-single-digit-percentage sales growth, and said it still expects tariff-related headwinds to hurt profit by about $100 million. CEO Stéphane de La Faverie said the company was confident in its ability to continue to build on its turnaround plan but cited an unpredictable global environment.

Implications for brands: Estée Lauder’s stronger-than-expected quarter shows that accessible pricing and product innovation is essential to growth in beauty, especially as competition continues to intensify. Gap Inc., for instance, is launching Old Navy Beauty, a youth-focused line of body mists and scents. Its move shows that even apparel retailers are muscling into beauty to lure Gen Z consumers, putting new pressure on established beauty brands.

With share gains in China and expansion into new sales channels—the company launched Amazon storefronts for some brands in Mexico and the UK, and debuted Clinique and MAC stores on TikTok Shop—Estée Lauder is positioning itself to better connect with younger audiences. For all beauty players, the takeaway is clear: Winning in this sector will require pairing new products with digital agility and accessible price points.

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