Estée Lauder Companies Reworks Makeup Strategy, Eyes Asia for Growth
Estée Lauder Companies (ELC) reported flat make-up sales for fiscal year 2026. CEO Stéphane de La Faverie outlined strategies to improve profitability, including expanding distribution channels and accelerating innovation, while prioritizing growth in Asia-Pacific markets like China and South Korea.
ELC Addresses Flat Makeup Sales
Estée Lauder Companies (ELC) reported flat sales for its make-up division during fiscal year 2026, despite a 5% increase in overall net sales to US$15 billion. The beauty firm's gross profit also rose 7% to $11.3 billion, up from $10.5 billion the previous year. ELC President and CEO Stéphane de La Faverie outlined a strategy to improve make-up profitability.
This plan includes expanding distribution channels and accelerating product innovation. ELC also intends to prioritize growth within key Asia-Pacific markets, specifically China and South Korea, which showed strong performance in the recent fiscal year.
Distribution and Innovation Drive Strategy
To address make-up division challenges, ELC Executive VP and CFO Akhil Shrivastava stated the company will leverage its prominent brands like MAC Cosmetics and Clinique. Mr. de La Faverie detailed efforts to place cosmetics brands in fast-growing channels where consumers shop.
This approach led to MAC Cosmetics entering Sephora's US stores and website on March 2, marking its first appearance with the retailer. MAC Cosmetics also debuted on TikTok Shop UK in April. Mr. de La Faverie claimed this broader distribution was previously "missing" from their strategy.
The company also rationalizes distribution by closing freestanding stores that lack profitability or productivity, shifting focus to more profitable channels.
Asia-Pacific Markets Show Strong Performance
Asia was among ELC's top-performing markets in fiscal year 2026. Mainland China showed value share gains across the fiscal fourth quarter and full year, driven by fragrance, skincare, and make-up. ELC also observed increased prestige demand in South Korea, with fourth-quarter retail sales growth reaching double-digits, fueled by make-up and skincare.
Mr. de La Faverie stated ELC will continue building on its strengths in China and across Asia-Pacific, including travel retail. He noted China's prestige beauty market is growing at high single-digits. China's National Bureau of Statistics reported the country's cosmetics retail market hit RMB 465.3 billion in 2025, a 5.1% year-over-year increase. ELC accelerates innovation in China through its Shanghai R&D center, tailoring products to local consumer needs.
Implications for Asia's Beauty Industry
ELC's intensified focus on Asia-Pacific, particularly China and South Korea, demonstrates the region's continued importance for global beauty firms.
The strategic shift to diversified retail channels, including social commerce platforms and specialty multi-brand stores, suggests that Asian beauty brands and retailers should assess their own omni-channel presence to capture evolving consumer shopping habits.
For Asian suppliers and ingredient manufacturers, ELC's acceleration of innovation in China, driven by local R&D, implies a demand for tailored ingredients and formulations that meet specific regional consumer preferences. This also highlights a potential for increased collaboration with local partners.
Three newsletters, one newsroom.
The Beauty Brief delivers Asia's beauty week every Monday. Regulatory Radar tracks the rule changes that move markets. Trend Pulse decodes what consumers want next. All free to start.
