For two years the question about The Estée Lauder Companies was whether it could grow again at all. The first quarter of its fiscal 2027, published on November 2, answers that one. Net sales rose 7% to $3.715 billion in the three months to September 30, 6% on an organic basis, and the company raised its guidance for the year, as reported in its own release. The more useful question now is where the growth comes from, and the answer is narrower than the headline suggests.

One category doing the lifting

Fragrance sales rose 19% to $861 million, 20% organically, and operating income in the category climbed 93% to $166 million. Skin care, still the largest business at $1.651 billion, grew 4% organically. Makeup grew 1%. Hair care was flat. Put differently: fragrance is under a quarter of sales and delivered well over half of the group's added revenue in the quarter.

The release names the brands behind it, and they are almost all the niche, high-price houses the group bought or built over the last decade: Le Labo, TOM FORD, Jo Malone London and KILIAN PARIS, plus Glimmer, which the company calls the Estée Lauder brand's first gourmand scent. Chief executive Stéphane de La Faverie told Glossy's Emily Jensen that the new commitment is to go after the prestige price tier in fragrance in the West, France included. That is a bold target in the home market of the houses that defined the category, and this quarter gives him the numbers to say it with a straight face.

The weak spots sit closer to the brand that carries the company's name. The release attributes a decline in makeup to the Estée Lauder brand itself, in the face subcategory, offset by M·A·C. Aveda fell in hair care on what the company calls brand-specific supply chain problems. M·A·C is the one makeup brand with momentum, and De La Faverie told Glossy that its US sales on TikTok Shop have "more than doubled" since the 2025 launch. A heritage counter brand losing ground while its sister grows on a social shopping app is a fair picture of where prestige makeup is being bought now, and the group cannot cover that with perfume forever.

Asia comes back, through the airport

Asia/Pacific grew 10% organically and mainland China 9%, with operating income in China rising from $12 million to $32 million. The release credits much of the regional gain to travel retail, including replenishment orders at Beijing and Shanghai airports and better online sales in Hainan. That is welcome, and it is also the channel that hurt this company most when it went wrong: replenishment orders are a retailer restocking, not a shopper buying, and they can reverse. The Americas grew 4% organically, as did the business the company now reports as EUKEM, covering Europe, the UK and emerging markets.

Margins up, cash still out

The profit side of the turnaround is clearer than the sales side. Gross margin rose to 75.7% from 73.4%, adjusted operating margin to 12.1% from 7.3%, and adjusted earnings per share to $0.72 from $0.32, against analyst estimates of about $0.51 to $0.52, as reported by Grafa. The company credits cost work under its Profit Recovery and Growth Plan. Restructuring charges in the quarter fell to $40 million from $89 million. Free cash flow was still negative at minus $235 million, an improvement on minus $436 million a year earlier, and normal for a quarter in which stock is built for the holidays.

The new guidance calls for organic growth of 4% to 5.5% for the year, up from 3% to 5%, and adjusted earnings per share of $3.20 to $3.45. The company says it remains "cautious amid ongoing geopolitical and macroeconomic uncertainty" and expects more growth in the first half than in the second. "We have moved beyond restoring growth," De La Faverie said in the release.

He has moved beyond it in one category. Our verdict: this is a good quarter and an honest one, but a turnaround that runs on fragrance, airport restocking and cost cuts has not yet shown that the core brands can grow. When Nadine Graf, the group's president for Europe, UK & Ireland and Emerging Markets, spoke at Shoptalk Europe in June, she argued that the house had to move at the speed of the consumer. On this evidence, the consumer is moving towards perfume and towards TikTok, and the company is following on the first and still catching up on the second.

What to watch

The company holds a capital markets event in Shanghai on November 4. Two things to listen for: whether management puts a number on how much of the China and travel retail recovery is sell-in to retailers rather than sell-out to shoppers, and whether it says anything concrete about the Estée Lauder brand's makeup business, which is the part of this report that did not turn around.

Sources: The Estée Lauder Companies, "The Estée Lauder Companies Reports Fiscal 2027 First Quarter Results", Business Wire, November 2, 2026; Emily Jensen, "The Estée Lauder Companies reports continued growth, with fragrance still driving the charge", Glossy, November 2, 2026; Heidi Cuthbert, "Estée Lauder raises outlook after $3.72bn quarter", Grafa, November 2, 2026.