Estée Lauder expects $100 million in tariff headwinds

Estee Lauder It said Thursday it expects a $100 million loss to its full-year profitability due to the effects of the tariffs.

The cosmetics company’s shares fell by more than 20% in midday trading.

The company is currently in the midst of a turnaround plan, dubbed “Reimagining Beauty,” which is expected to cost between $1.2 billion and $1.6 billion and aims to revitalize its growth. In its second-quarter earnings report on Thursday, the company said it still expects net workforce reductions of between 5,800 to 7,000 as part of the restructuring.

Estée Lauder said it is “actively evaluating developments and mitigation strategies” to limit the impacts of the tariffs. The company said it strengthened trade programs, improved its regional manufacturing footprint, and increased supply chain resilience, all of which offset more than half of the expected impacts.

The company said it expects tariff headwinds to impact profitability mostly in the second half. It also specified assumed tariff rates in Switzerland, Canada, China, Mexico, the European Union and Japan, where it has facilities, as part of its calculations.

However, Estée Lauder said it continues to monitor active tariff situations and is working to implement further strategies to further offset these costs, including “potential pricing actions.”

The company also said it was raising its financial outlook after a strong performance in the first half of the year, although it said it would remain cautious about the macroeconomic environment.

“In this pivotal year, Beauty Reimagined has energized our business as we implement the largest operational, leadership and cultural transformation in our history,” CEO Stephane de la Faverie said in a statement. “On our one-year anniversary, we raise our 2026 financial outlook confident in the strength of our turnaround, even as the second half reflects previously expected headwinds and greater consumer-facing investments now, as we expect to restore organic sales growth and expand our operating margin for the first time in four years.”