Estee Lauder Companies Inc (EL)

Return on assets (ROA)

		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
Net income (ttm)	US$ in thousands	-1,133,000	-871,000	-700,000	203,000	390,000	641,000	467,000	548,000	1,006,000	1,091,000	1,493,000	2,187,000	2,390,000	3,356,000	3,254,000	3,039,000	2,870,000	1,390,000	928,000	612,000
Total assets	US$ in thousands	19,892,000	19,886,000	19,760,000	21,317,000	21,677,000	22,700,000	23,283,000	22,650,000	23,415,000	22,715,000	20,731,000	19,989,000	20,910,000	21,359,000	22,078,000	21,580,000	21,971,000	19,900,000	19,595,000	17,903,000
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%

June 30, 2025 calculation

ROA = Net income (ttm) ÷ Total assets
= $-1,133,000K ÷ $19,892,000K
= -5.70%

The analysis of Estee Lauder Companies Inc.'s return on assets (ROA) over the specified periods reveals a significant decline from 2020 through mid-2025.

Initially, the ROA demonstrated an upward trend, increasing from 3.42% on September 30, 2020, to a peak of 15.71% as of March 31, 2022. This period of growth indicates improved profitability relative to the company's total assets, reflecting efficient utilization of assets to generate net income during that timeframe.

However, beginning in mid-2022, the ROA experienced a marked deterioration. By September 30, 2022, it had fallen to 10.94%, and this downward trajectory continued through subsequent quarters and years. The ROA reached 7.20% at the end of 2022 and further declined to 4.80% in the first quarter of 2023, with continued decreases observed in the second and third quarters of 2023, at 4.30% and 2.42%, respectively.

The most notable shift occurs with the transition into late 2023 and 2024, where the ROA turns negative. As of December 31, 2023, the ROA stood at -3.54%, indicating that the company was incurring net losses relative to its assets. This negative trend persisted into early 2024 and beyond, with the ROA decreasing further to -4.38% on March 31, 2025, and reaching -5.70% by June 30, 2025.

In summary, the company's ROA indicates a peak of profitability around early 2022, followed by a sustained decline culminating in negative profitability by late 2023 and into mid-2025. This pattern suggests increasing challenges in generating net income from assets over this period, possibly due to external economic factors, changes in market conditions, or company-specific issues affecting profitability.