Research
Research Alert: El: Margin Recovery Ahead Of Plans; Encouraging Preliminary Fy 27 Guidance
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:EL delivered stronger-than-expected results with organic sales growing 2% and adjusted operating margin expanding 360 bps to 15.0%, due to PRGP benefits tracking above expectations. The company raised FY 26 (Jun.) guidance to ~3% organic growth and 10.7%-11.0% adjusted operating margin, with a preliminary FY 27 view of 12.5%-13.0% margins validating the Beauty Reimagined transformation. The margin story is the key takeaway, with PRGP delivering results faster than anticipated and restructuring benefits raised to $1.0B-$1.2B from $0.8B-$1.0B. Management's FY 27 outlook implies 3%-5% organic growth dependent on prestige beauty recovery and China momentum. Fragrance led with 10% growth while Skin Care and Makeup remained flat, as mainland China grew 6% organically with share gains for the third consecutive quarter. The FY 27 margin outlook approaching 13% represents the primary catalyst, exceeding 12% consensus and marking meaningful progress toward restoring historical profitability.
$EL