Estee Lauder Companies Inc (EL)

Cash conversion cycle

		Jun 30, 2025	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020
Days of inventory on hand (DOH)	days	203.01	184.91	178.88	192.22	179.45	187.37	209.00	226.63	238.24	255.06	262.52	257.92	247.57	242.48	226.73	236.36	238.48	215.47	219.91	231.90
Days of sales outstanding (DSO)	days	38.98	44.24	38.75	46.70	40.39	44.10	42.19	44.96	33.31	43.81	43.11	45.55	33.52	44.52	42.80	48.50	38.31	43.05	50.72	47.37
Number of days of payables	days	146.53	114.59	101.24	96.75	118.81	97.22	100.52	99.50	133.56	125.18	128.91	118.96	154.48	125.95	142.27	133.31	161.08	128.94	135.00	123.95
Cash conversion cycle	days	95.46	114.56	116.39	142.17	101.03	134.25	150.66	172.09	138.00	173.69	176.73	184.51	126.62	161.04	127.25	151.56	115.71	129.58	135.63	155.33

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 203.01 + 38.98 – 146.53
= 95.46

The cash conversion cycle (CCC) of Estee Lauder Companies Inc. has demonstrated notable fluctuations over the analyzed period from September 2020 through June 2025. Initially, the CCC was approximately 155.33 days at the end of September 2020, indicating the time required to convert investments in inventory and receivables into cash was relatively prolonged during this period.

From September 2020 to June 2021, there was a consistent decline in the CCC, reaching a low of approximately 115.71 days by June 2021. This trend suggests an improvement in operational efficiency, potentially attributable to shortened inventory holding periods or faster receivables collections.

However, the subsequent period witnessed an increase in the CCC, with notable peaks such as approximately 184.51 days at the end of September 2022 and about 176.73 days at December 2022. These increases may reflect delays in inventory turnover or receivables collection, or strategic alterations in supply chain practices.

Between March 2023 and June 2025, the CCC generally trended downward, reaching its lowest point of approximately 95.46 days as of June 2025. This sustained reduction indicates a significant enhancement in cash flow performance, potentially driven by improved inventory management, faster receivables collections, or more efficient payables practices.

In summary, the company's cash conversion cycle has experienced periods of both elongation and contraction. The overall trajectory suggests ongoing efforts to optimize working capital efficiency, with a marked improvement observed in the most recent data points, underscoring a trend toward more streamlined cash flow operations.