Estee Lauder Companies Inc (EL)

Operating return on assets (Operating ROA)

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Operating income	US$ in thousands	-785,000	970,000	1,509,000	3,170,000	2,618,000
Total assets	US$ in thousands	19,892,000	21,677,000	23,415,000	20,910,000	21,971,000
Operating ROA		-3.95%	4.47%	6.44%	15.16%	11.92%

June 30, 2025 calculation

Operating ROA = Operating income ÷ Total assets
= $-785,000K ÷ $19,892,000K
= -3.95%

The operating return on assets (ROA) for Estee Lauder Companies Inc. demonstrates notable fluctuations over the specified period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the operating ROA stood at 11.92%, indicating a relatively efficient utilization of the company's assets to generate operating income. This figure experienced a substantial increase in the subsequent year, reaching 15.16% as of June 30, 2022, suggestive of improved operational efficiency and potentially higher profitability relative to asset base during that period.

However, this positive trend was not sustained. By June 30, 2023, the operating ROA declined sharply to 6.44%, reflecting a significant decrease in operating income relative to assets. The downward trend continued into June 30, 2024, with the ratio falling further to 4.47%, indicating a continued decline in operational efficiency or profitability relative to the assets employed.

Most recently, as of June 30, 2025, the operating ROA turned negative at -3.95%. A negative figure in this metric implies that the company’s operating income was insufficient to cover its asset base, signaling potential operational challenges or losses attributable to the asset utilization during that fiscal year.

Overall, the trajectory of the operating ROA suggests a strong initial performance that experienced a notable decline over the three-year span, culminating in a negative return in the most recent period. This pattern warrants further analysis into underlying operational factors, asset management efficiency, and external market conditions that may have contributed to this deterioration.