Despite delivering stronger than expected Q2 results, management’s warning about tariff headwinds and margin pressure reset expectations and sent the stock into a double digit slide.
of about $0.83 and up roughly 43% year on year. Net sales came in around $4.23 billion , up 6% from the prior year and slightly ahead of estimates. These numbers confirm that the company’s turnaround efforts and cost controls are starting to show in the P&L . However, the guidance overshadowed the beat.
Management reiterated that tariff related challenges are expected to cut fiscal 2026 profitability by about $100 million , mainly in the second half of the year, even after mitigation efforts.
They also flagged that Q3 margin will likely contract by roughly 50 basis points due to the timing of marketing investments and those same tariff headwinds.
Why The Stock Sold Off Ahead of the release, EL had rallied strongly from its April 2025 lows by roughly 139% and was trading in the $115 to $120 range, making it a high expectations stock again…
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