The Estee Lauder Companies China Fulfillment Center in Shanghai's Minhang district. (Photo provided to chinadaily.com.cn)

The Estee Lauder Companies closed fiscal 2026 with its strongest quarter of the year, as its Chinese mainland business gained market share for a sixth consecutive quarter and organic net sales rose nine percent, outpacing the broader prestige beauty market in China.

The earnings report, released on Wednesday, showed full-year organic sales up three percent, with fourth-quarter growth accelerating to five percent — the fourth straight quarter of expansion. Growth was broad-based across regions and nearly all categories, with fragrance a standout, rising 10 percent organically to rank among the industry's best performers.

The company's China growth was driven by a dual dynamic of brand diversification and digital channel expansion.

In the fourth quarter, 11 of the company's brands posted retail sales growth in the Chinese mainland, six of them at double-digit rates. La Mer continued its strong performance, while Le Labo grew more than 50 percent for the full year.

Online channels now account for over 50 percent of the company's China business.

Meanwhile, roughly 30 percent of new products now originate in and serve the Chinese market. Innovations contributed 23 percent of the company's full-year net sales.

"I am incredibly proud of our team for delivering fiscal 2026 results ahead of the expectations we had to start the year," Stephane de La Faverie, president and CEO of the company, said.

"We are delivering on all aspects of Beauty Reimagined. Our One ELC operating model is increasingly enabling the entire organization to move at speed and with discipline."

Looking ahead to fiscal 2027, de La Faverie said, "We are affirming our confidence to accelerate organic sales growth. In addition, we are raising our outlook for an even stronger adjusted operating margin, as we double down on our strengths to further diversify growth across product categories and geographies, including accelerating growth in North America."

The company expects organic sales growth of three to five percent in fiscal 2027, with a more diversified growth profile — sustained expansion in fragrance and skincare, an anticipated recovery in makeup, and accelerating momentum in North America.