Estee Lauder Companies Inc (EL)
Profitability ratios
Return on sales
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 73.97% | 73.85% | 73.08% | 72.29% | 71.66% | 70.72% | 70.01% | 70.25% | 71.31% | 72.06% | 73.91% | 75.28% | 75.73% | 76.48% | 76.28% | 76.15% | 76.36% | 75.42% | 75.25% | 75.15% |
| Operating profit margin | -5.48% | -4.25% | -2.66% | 4.86% | 6.21% | 7.81% | 6.36% | 6.10% | 9.48% | 9.71% | 12.11% | 16.46% | 17.57% | 18.36% | 18.06% | 16.71% | 16.15% | 12.52% | 9.40% | 3.81% |
| Pretax margin | -7.26% | -5.87% | -4.11% | 3.53% | 4.95% | 6.54% | 5.26% | 5.23% | 8.78% | 9.41% | 11.71% | 16.05% | 17.12% | 22.29% | 22.08% | 20.87% | 20.54% | 11.39% | 8.29% | 6.85% |
| Net profit margin | -7.91% | -5.89% | -4.61% | 1.31% | 2.50% | 4.18% | 3.08% | 3.54% | 6.32% | 6.88% | 9.13% | 12.66% | 13.47% | 18.53% | 18.35% | 17.83% | 17.70% | 9.45% | 6.54% | 4.38% |
The profitability ratios of Estee Lauder Companies Inc. over the period from September 2020 through June 2025 reveal a nuanced dynamic in the company's financial performance.
Gross Profit Margin:
The gross profit margin exhibited a steady upward trend from 75.15% in September 2020 to a peak of approximately 76.48% in March 2022. Post this peak, a gradual decline is observable, with the margin decreasing to approximately 70.01% in December 2023. Interestingly, there is a partial recovery thereafter, reaching about 73.97% by June 2025. These fluctuations highlight periods of increased efficiency in cost control or product pricing, followed by a consolidation phase, possibly influenced by shifts in product mix or competitive pressures.
Operating Profit Margin:
The operating profit margin experienced significant growth during 2020 and the first half of 2021, rising from 3.81% in September 2020 to a high of 20.87% in December 2021. This indicates an improvement in operating efficiency and cost management during this period. However, subsequent quarters reveal a downward trajectory, culminating in negative figures in late 2024 and mid-2025 (with margins of -2.66% and -5.48%, respectively). This deterioration suggests rising operating costs, margin compression, or challenges in maintaining operational efficiencies amid changing external conditions.
Pretax Margin:
The pretax margin followed a similar trend, peaking at 22.29% in March 2022 after substantial growth observed in 2020 and early 2021. Thereafter, a decline ensues, with margins shrinking to around 3.53% by September 2024, and turning negative in the early quarters of 2025. The negative pretax margins in 2024 and 2025 signal significant challenges, potentially including increased expenses, impairments, or extraordinary items impacting pre-tax profitability.
Net Profit Margin:
Net profit margins mirror the patterns seen in the other ratios, reaching a high of 18.53% in March 2022. Post this peak, margins decline steadily, falling below 5% in late 2023 and further into negative territory by June 2024 and beyond, reaching approximately -7.91% in June 2025. This persistent negative trend indicates that the company has faced substantial difficulties in translating gross and operating profits into net earnings, possibly due to increased interest expenses, taxes, or one-off charges.
Summary:
Overall, Estee Lauder’s profitability ratios depict a company that experienced robust profitability up until early 2022, characterized by high gross, operating, pretax, and net margins. However, the subsequent period reveals a significant erosion of profitability, culminating in negative margins by 2024 and 2025. These changes could be attributable to various factors, including escalating costs, market penetration challenges, competitive pressures, or macroeconomic impacts, which have adversely affected the company's bottom-line performance.
Return on investment
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -3.95% | -3.16% | -2.04% | 3.52% | 4.47% | 5.28% | 4.14% | 4.18% | 6.44% | 6.78% | 9.56% | 14.22% | 14.91% | 15.57% | 14.51% | 13.20% | 11.92% | 9.25% | 6.81% | 2.97% |
| Return on assets (ROA) | -5.70% | -4.38% | -3.54% | 0.95% | 1.80% | 2.82% | 2.01% | 2.42% | 4.30% | 4.80% | 7.20% | 10.94% | 11.43% | 15.71% | 14.74% | 14.08% | 13.06% | 6.98% | 4.74% | 3.42% |
| Return on total capital | 3.39% | 12.82% | 18.76% | 19.39% | 21.55% | 23.75% | 20.12% | 19.92% | 28.50% | 27.28% | 33.34% | 50.95% | 55.46% | 67.43% | 65.39% | 62.85% | 59.45% | 35.69% | 32.84% | 36.79% |
| Return on equity (ROE) | -29.31% | -20.05% | -16.79% | 3.99% | 7.34% | 11.16% | 8.18% | 10.26% | 18.01% | 18.56% | 25.30% | 39.64% | 42.75% | 54.57% | 52.33% | 49.98% | 47.38% | 25.14% | 17.12% | 13.75% |
The profitability ratios of Estee Lauder Companies Inc. over the analyzed period exhibit notable fluctuations that reflect the company's operational performance and strategic shifts.
Operating Return on Assets (Operating ROA):
The Operating ROA shows a significant upward trend from a modest 2.97% on September 30, 2020, to a peak of 15.57% on March 31, 2022. This indicates that the company enhanced its core operational efficiency and asset utilization during this period. However, subsequent periods demonstrate a declining trend, with the ratio falling to approximately 4.14% by the end of 2023 and turning negative in 2024 and 2025, reaching -3.95% by June 2025. The decline suggests worsening operational effectiveness relative to asset base, possibly due to external pressures or strategic realignments.
Return on Assets (ROA):
The ROA followed a similar pattern, rising from 3.42% in September 2020 to a peak of 15.71% in March 2022, reflecting improved profitability attributable to both operational gains and overall asset efficiency. After this peak, the ratio declined consistently, reaching near zero in December 2024 and turning negative by March 2025 at -4.38%. The negative values in later periods indicate the company's net profitability potentially being eclipsed by higher expenses or impairments.
Return on Total Capital:
This ratio mirrors the trends seen in the ROA metrics, with a notable peak of 67.43% in March 2022, underscoring strong capital utilization and profitability levels during that period. The decline from this peak to around 18.76% in December 2024 and further decreases to 3.39% by June 2025 suggest a substantial reduction in capital efficiency or increased capital costs impacting overall financial returns.
Return on Equity (ROE):
ROE demonstrates a sharp increase from 13.75% in September 2020 to an apex of 54.57% in March 2022, reflecting high shareholder profitability driven by a combination of operational performance and leverage. Post-2022, the ROE descends rapidly, reaching 8.18% at the end of 2023 and turning negative as low as -29.31% by June 2025. The trend indicates decreased equity profitability, potentially influenced by diminished net income, higher financial leverage complexities, or strategic shifts that impact shareholder returns.
Overall, the profitability ratios reveal robust operational and capital efficiency improvements through 2021 and early 2022, followed by a prolonged period of decline and deteriorating profitability culminating in negative returns in 2024 and 2025. This trajectory suggests material challenges faced by Estee Lauder Companies in sustaining prior profit levels, likely impacted by external market factors, competitive pressures, or internal strategic adjustments.
See also:
Estee Lauder Companies Inc Profitability Ratios (Quarterly Data)