Estée Lauder’s stock, once trading above $370 in January 2022, slid to $84.64 after the collapse of acquisition talks with Puig, a Spanish beauty conglomerate. The deal fell apart over valuation differences,leaving the company to focus on internal restructuring and a "Beauty Reimagined" strategy to restore growth and investor confidence.

Valuation Clash Ends Puig Bid, Leaves Estée Lauder With No Big Deal in Sight

According to a report from a banking conference in Paris, CEO Stéphane de La Faverie said the Puig negotiations collapsed because "it all came down to money." Analysts at Raymond James note that investors are reluctant to approve another large transaction unless the entire company is sold, a scenario the founding Lauder family is unlikely to entertain. The failed deal has made it clear that Estée Lauder will not pursue another multibillion‑dollar merger in the near term.

Beauty Reimagined: A 2025 Initiative Aimed at Double‑Digit Margins

The "Beauty Reimagined" program, unveiled by de La Faverie in February 2025,seeks to restore sustainable sales growth and achieve double‑digit adjusted operating margins. It focuses on expanding into high‑growth channels, markets, media and price tiers to capture opportunities in prestige beauty. Analysts like Olivia Tong emphasize that the company must reinvigorate its top line and continue margin recovery through this initiative.

Massive Restructuring: 9,000‑10,000 Jobs Cut, $1.5‑$1.7 Billion in Charges

In its third‑quarter 2026 earnings report, Estée Lauder confirmed a final net reduction of 9,000 to 10,000 positions, up from the earlier estimate of 5,800 to 7,000. More than 70% of the cuts stem from eliminating point‑of‑sale demonstration roles at underperforming department stores and freestanding stores. all restructuring decisions are to be finalized by the end of the month, with cumulative charges estimated between $1.5 billion and $1.7 billion, according to a recent SEC filing.

Channel Diversification: From Amazon to TikTok Shop and Sephora Entry

Estée Lauder is diversifying its retail strategy by bringing brands to Amazon and recently adding some to TikTok Shop. Notably, after 41 years, MAC Cosmetics entered Sephora in the U.S. and the Middle East, giving it access to the largest part of the makeup business in those regions. Despite this, MAC’s ranking at Sephora remains modest, with the brand ranking number‑five inside Kohl’s and number‑19 overall.

MAC’s Lipstick Surge Shows Potential, Yet Skincare and Makeup Flat

MAC gained 250 basis points of market share in lip gloss and near‑triple‑digit growth in the U.S. lip category in the first calendar quarter of 2026, driven by the global success of the Powder Kiss lipstick line.. However, skincare, which constitutes the majority of revenue, was flat in the third quarter of fiscal 2026, as were makeup and haircare. Fragrance grew 10%, but total net sales increased only 5% to $3.9 billion.

Who Will Lead the Recovery? Uncertainty Over Leadership and Execution

While de La Faverie has outlined a bold plan, analysts question whether the current leadership can execute the aggressive restructuring and channel expansion. The absence of a major presence at Sephora and the need to rebuild investor confidence add layers of uncertainty to the recovery trajectory.