Estee Lauder sets growth targets through 2030 amid China recovery

Estee Lauder announced on Wednesday financial targets through fiscal 2030, aiming for sustainable mid-single-digit annual organic sales growth and double-digit adjusted earnings per share growth as the cosmetics maker builds on recovery in China and works to improve profitability.

The company, owner of brands including La Mer, MAC Cosmetics and Tom Ford Beauty, also set a target for adjusted operating margin of 16.5% to 18.5% in fiscal 2030, according to statements made at an investor event in Shanghai.

The targets represent a shift toward faster growth following several years of weak performance, particularly in China, where Estee Lauder faced sluggish consumer demand, competition from domestic brands and pressure from unauthorized sellers offering discounted products.

Mainland China has recorded positive organic sales growth for four consecutive quarters. China generated $3.1 billion in net sales in the company’s most recent fiscal year, representing about 20% of total revenue.

Estee Lauder plans to develop products and marketing strategies tailored to Chinese consumers while applying lessons from the turnaround at MAC Cosmetics to other brands, including Aveda.

The company expects margin expansion to be stronger in fiscal 2028 than in fiscal 2029 and 2030, reflecting a full-year contribution from initiatives under its Profit Recovery and Growth Plan, which runs through fiscal 2027.

Estee Lauder expects its adjusted effective tax rate to fall to 30% or below by fiscal 2030. Higher earnings, lower restructuring payments and working capital efficiencies are expected to support operating cash flow and free cash flow.

The company anticipates restructuring and other charges of about $40 million to $50 million before taxes in fiscal 2028. It also noted a potential net sales impact from its acquisition of Forest Essentials in the first quarter of fiscal 2028, which it said it could not yet forecast with reasonable certainty.