Estée Lauder Faces $100 Million Tariff Hit as Stock Plummets
By John Nada·Feb 5, 2026·2 min read
Estée Lauder expects a $100 million hit to profitability from tariffs, causing its stock to plunge over 20%. A turnaround plan is underway amid these challenges.
Estée Lauder is bracing for a $100 million hit to its full-year profitability due to tariff impacts, according to CNBC Business. The beauty giant's stock tumbled over 20% on Thursday, reflecting investor concerns. This downturn comes as the company implements a significant turnaround plan named 'Beauty Reimagined.' This ambitious initiative is expected to cost between $1.2 billion and $1.6 billion and aims to revitalize growth amid challenging market conditions.
In its fiscal second-quarter earnings report, Estée Lauder confirmed plans for net workforce reductions of 5,800 to 7,000 as part of its restructuring efforts. The report stated that the company has been actively evaluating developments and mitigation strategies to lessen the impact of tariffs. It has utilized trade programs, optimized its manufacturing footprint, and increased supply chain agility, managing to offset more than half of the anticipated tariff impacts.
The company expects these tariff challenges to primarily affect profitability in the second half of the year. It has identified specific tariff rates in countries including Switzerland, Canada, China, Mexico, the European Union, and Japan in its calculations. Estée Lauder continues to monitor tariff situations and is working on further strategies, including potential pricing actions, to mitigate these costs.
Despite the tariff headwinds, Estée Lauder raised its fiscal outlook following solid performance in the first half of the year. CEO Stéphane de La Faverie commented on the pivotal nature of the year, stating that 'Beauty Reimagined' has invigorated the business. With the second half expected to bring more challenges, the company remains focused on restoring organic sales growth and expanding its operating margin for the first time in four years.
This situation underscores the volatility companies face in the current macroeconomic climate. For investors, the stock's sharp decline may signal the need for caution as Estée Lauder navigates these turbulent waters.