Estee Lauder shares soar on indicators of turnaround at the same time as magnificence large axes 1000’s extra jobs

Estee Lauder shares soared after signs of a turnaround as consumers splashed out on high-end fragrances – but said it would cut thousands more jobs.

The beauty giant, which owns Clinique, Jo Malone and MAC Cosmetics, said that sales grew 2 per cent to £2.65billion over the three months to 31 March.

It has been attempting to revive business after a difficult year marred by Donald Trump’s trade war.

The group, which is mulling a takeover of Charlotte Tilbury owner Puig, said it will have to cut between 9,000 and 10,000 roles by the end of the current financial year. It marks an increase from its previous aim of up to 7,000 and mostly involves sales roles at unproductive department stores, it said.

Shares rose 12 per cent in premarket trading in New York on Friday afternoon after it said sales in its perfumes division rose 10 per cent thanks to demand for luxury scents.

Estee Lauder owns brands including MAC Cosmetics – whose famous fans include popstar Charli XCX

This includes brands like Le Labo – which sells bottles of its popular Santal 33 fragrance for £238 – as well as designer brands Balmain and Tom Ford.

Strong sales in this division offset flat sales in its skincare and cosmetics arms.

The group said sales rose 6 per cent in China, with brands including La Mer, Le Labo and the Ordinary doing especially well.

And Estee Lauder said it was raising its annual outlook for the 2026 financial year – which ends in June – for sales growth of around 3 per cent. 

This is even despite ‘geopolitical and macroeconomic uncertainty, including business disruptions in the Middle East and continued headwinds in key markets, particularly in the West,’ it said.

The update echoes a positive update from L’Oreal last week, which also benefited from a recovery of fortunes in the Chinese economy, which has helped boost consumer confidence after a slump.

L’Oreal said last week that it had seen sales rebound thanks to a ‘lipstick effect’ on consumer confidence.

Coined by Estee Lauder, the ‘lipstick effect’ phrase is used to refer to women forking out on affordable luxuries like lipsticks and perfume when the economy is in dire straits – often instead of pricier purchases.