How Unilever, ELC and P&G are funding their next phase of beauty growth

The beauty industry’s biggest players are preparing for their next phase of growth, taking different routes to fund it. Unilever and The Estée Lauder Companies (ELC) are looking inward, with both cutting internal costs and simplifying operations to reinvest in brands. Procter & Gamble (P&G) is looking outward, raising US$4 billion from debt investors. 

Unilever aims to cut €1 billion (US$1.12 billion) in costs by the end of 2029, to cover the left-behind expenses from offloading its food business to McCormick. The company is restructuring to become a pure-play personal care, beauty, and home care business, seeing these as its most profitable divisions to focus on.

As part of the move, Unilever is also re-hashing teams to help scale the company’s power brands, led by its Desire at Scale strategy.

“Our new operating model will combine a centralized global strategy with excellence in local execution, aiming for portfolio convergence and simplification, leveraging our market-leading brands and premium digital disruptors,” says Fernando Fernandez, CEO of Unilever.

Similarly, ELC has updated its growth and profit targets through fiscal 2030, outlining plans for operational simplification under its One ELC strategy. The company will reduce back-office spending through “everyday efficiencies.” At the same time, it will keep investing in consumer-facing activities, such as brand building and innovation, to drive sales.

ELC expects higher earnings, lower restructuring payments, and more efficient working capital to boost its operating cash flow. Together with its planned tighter capital spending, the company expects increased free cash flow through fiscal 2030.

Meanwhile, after posting a stronger-than-expected first quarter, P&G closed a US$4 billion senior notes offering, according to its filing with the US Securities and Exchange Commission.

The filing does not specify how the company will use the funds, and P&G has not yet released a statement. However, the deal has long maturities in tranches, stretching up to 30 years, giving the Olay, Pantene, and Gillette owner long-term financial flexibility at a time of rising input costs.

P&G has raised US$4 billion in long-term debt following a strong first quarter.The opposing routes to riches have trade-offs, with Unilever and ELC having to deliver their savings over several years before the money is available. P&G, meanwhile, has access to cash now, but is stuck with an interest rate of up to 5.9% on some of its notes, compared to the maxed-out 1% it enjoyed on some previous loans.

Funding a beauty-led future

Unilever says it will execute its billion-dollar savings plan through simplifying the organization, its process design, and technological initiatives. The move aims to cover the €400–€500 million (US$451–563 million) in stranded operational expenses that its food business used to help pay for, Reuters reports, leaving room to reinvest the rest.

Will James, portfolio manager at Unilever investor Guinness Global Investors, told Reuters that if Unilever keeps the extra savings as profit, its operating margin could rise by around half a percentage point.

Beyond the cost-cutting, under the company’s principle of “global strategy, local execution,” Unilever is also creating a leaner central team. The team will handle strategy, marketing, and long-term R&D for its power brands, and the model is set to roll out during 2027, subject to consultations. 

The company reaffirmed its medium-term targets of 4–6% annual underlying sales growth, volume growth of at least 2%, and a modest improvement in underlying operating margin.

“Unilever is becoming a sharper, more focused HPC business, with Power Brands and a global footprint that provides significant opportunities for growth,” says CEO Fernandez.

Analysts expect Unilever to prove its momentum can hold. The company reported in H1 2026 that its beauty, personal care, and home units delivered the best volume quarter Unilever has seen in over a decade. The volume figures highlighted the effectiveness of the company’s Desire at Scale strategy in driving demand.

In a note cited by Reuters, Barclays said the company must prove that its home and personal care momentum is “repeatable and broad-based,” and CEO Fernandez appears confident that it is:

Unilever plans to cut €1 billion in costs by 2029 as it focuses on beauty, personal care, and home care.“We are building from a position of strength, and our priority is to deliver sustained, competitive volume-led growth and consistent hard currency earnings expansion,” he says.

Freeing up change for brand growth

ELC announced its ambitions for fiscal 2030 yesterday, at its Capital Markets Experience event in Shanghai, China. As part of the One ELC plan, the company’s restructuring moves aim to accelerate its operations and improve efficiency.

ELC says it will simplify internal processes and scale technology use and automation, aiming to facilitate faster, more accountable decision-making. 

“We are becoming a faster, more agile, and more consumer-centric company, with the creativity, entrepreneurial mindset, and operational discipline to win in a rapidly evolving beauty landscape,” says Stéphane de La Faverie, CEO at ELC.

The company expects the restructuring activities to cost approximately US$40–50 million, before taxes, in fiscal 2028. The costs are projected to impact ELC’s operating margin, effective tax rate, and diluted net earnings per common share, and have been excluded from the company’s latest targets. 

Through fiscal 2027, ELC aims to have completed the remaining projects under its Profit Recovery and Growth Plan. It expects the largest gains in fiscal 2028, when the benefits reach their full-year effect.

“Today, with growing confidence in the strength of Beauty Reimagined and the impact of our One ELC operating model, we are introducing our fiscal 2030 ambition: to deliver sustainable mid-single-digit organic sales growth annually and double-digit adjusted earnings per share growth through fiscal 2030, while achieving an adjusted operating margin of 16.5–18.5% in fiscal 2030,” says de La Faverie, CEO at ELC.

The company also says it wants more balanced growth and will focus on spreading its sales more evenly across brands, product categories, and regions.

ELC aims for mid-single-digit organic sales growth each year through fiscal 2030.“We are now entering a new chapter, moving beyond restoring growth to accelerating sustainable, profitable growth, and creating long-term value,” de La Faverie adds.

Buying fresh cash 

P&G’s US$4 billion offering is split into four tranches: US$750 million at 5.125% due 2031, US$750 million at 5.300% due 2033, US$1.25 billion at 5.450% due 2036 and US$1.25 billion at 5.900% due 2056.

The funding comes a week after P&G reported a 4% year-on-year net-sales increase for Q1 of its fiscal 2027, which runs July to September 2026. The company grew organically in all five of its segments, with Beauty posting the strongest net sales growth. It rose 6% to US$4.41 billion, with organic sales up 5%.

However, rising costs are weighing on profits. P&G’s core operating margin fell 0.8 percentage points to 25.9% in the quarter, as higher commodity costs and investments in products offset its productivity savings.

The company’s fresh debt adds to its interest bill. The notes carry rates between 5.1% and 5.9%, compared with the below -1% P&G had on some of its older notes, including those due in 2026, 2030, and 2031.

Like Unilever and ELC, P&G has also been cutting internal costs, with a productivity plan launched in June 2025 to streamline its brands and organization. At the time, the plan was forecast to cost around US$2 billion over two years, before tax. The company has booked over half of these costs in fiscal 2026 and expects to close the rest in fiscal 2027.

Despite the pressures, P&G continues to return cash to its shareholders, having paid out US$3.9 billion in dividends and share buybacks in the quarter. The company expects to pay out over US$10 billion in dividends and buy back around US$5 billion of shares this fiscal year.