The news: Estée Lauder posted a wider quarterly loss as sales slumped and warned that tariffs could reduce earnings by about $100 million over the next year.

The parent of brands including Clinique, MAC, and Jo Malone forecast earnings for its current fiscal year that were below analyst estimates.

By the numbers: The company’s loss came to $546 million, or $1.51 a share, in fiscal Q4 (ended June 30, 2025), compared with a $284 million loss a year ago. Adjusted for restructuring charges and other items, per-share profit was $0.09, in line with analyst estimates.

Sales fell 12% to $3.41 billion but were ahead of the $3.39 billion analysts expected.

• By region, sales slumped 22% in Europe, the Middle East, and Africa and slipped 3% in Asia-Pacific, the company’s biggest regions. Americas sales fell 6%.
• By category, skin care sales were down 16%; makeup fell 11%; and hair care was off 15%, while fragrance rose 4%.

Rival beauty company Coty reported a narrower fiscal Q4 loss after markets closed on an 8% drop in sales. Like Estee Lauder, Coty had sales declines in all regions. Coty said it would launch affordable fragrance mists that would help it return to growth in the coming year.

Efforts to improve operations: Estée Lauder is streamlining its organizational structure to rejuvenate innovation and expanding beyond traditional sales channels like department stores to reach new customers.

• The company said it would cut up to 7,000 jobs this year.
• CEO Stéphane de La Faverie said the company plans to reduce discounting and focus on emerging markets, which currently represent 10% of reported sales.
• The company also wants to bolster online revenues. It said Amazon storefronts for Clinique and Origin were attracting new and lapsed customers.

The company expects these efforts to fuel a return to sales growth in the next year. It forecast earnings of $1.90 to $2.10 a share for the full year, below analysts’ estimate of $2.21 a share.

Our take: Estée Lauder is taking necessary steps to turn around its business—focusing on product innovation, cutting costs, and broadening its customer reach—but it will be tough given intense competition in the beauty market.

With key rival L’Oreal gaining US momentum and newer brands emerging, Estée Lauder must accelerate product innovation, reduce reliance on discounting, rebuild momentum in China, and take other steps to win new customers, or risk ceding more ground in the longer term.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.