Estee Lauder Companies Inc (EL)

Return on equity (ROE)

		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 stockholders’ equity	US$ in thousands	3,865,000	4,345,000	4,169,000	5,084,000	5,314,000	5,744,000	5,712,000	5,342,000	5,585,000	5,877,000	5,902,000	5,517,000	5,590,000	6,150,000	6,218,000	6,081,000	6,057,000	5,528,000	5,421,000	4,452,000
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%

June 30, 2025 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $-1,133,000K ÷ $3,865,000K
= -29.31%

The return on equity (ROE) of Estee Lauder Companies Inc. demonstrates significant fluctuations over the analyzed period, reflecting the company's evolving profitability and efficiency in generating returns for shareholders.

From September 30, 2020, with an ROE of 13.75%, the metric increased substantially through subsequent periods, reaching a peak of 54.57% on March 31, 2022. The period from September 2020 to March 2022 signifies a remarkable improvement in ROE, suggesting enhanced profitability and efficient utilization of shareholders' equity during this timeframe. High ROE levels, particularly the peak at nearly 55%, indicate periods of strong earnings performance relative to shareholder investment, possibly driven by favorable market conditions, effective cost management, or successful product strategies.

Post-March 2022, a downward trend emerges, with ROE decreasing to 42.75% by June 30, 2022, and further declining to 39.64% by September 30, 2022. This continued decline indicates a reduction in profitability or efficiency, possibly due to increased costs, market saturation, or changes in operating conditions.

The downward trajectory persists into 2023, with ROE falling to 25.30% at the end of December 2022, and further diminishing to 18.56% by March 2023, and 18.01% by June 2023. The decline continues into September 2023, where ROE reaches 10.26%. This consistent decrease suggests diminishing returns on shareholders’ equity, potentially attributable to increased competition, margin pressures, or other operational challenges.

From late 2023 onward, the ROE turns negative, with values of -16.79% at December 31, 2024, and further declines to -20.05% by March 2025, and -29.31% by June 2025. The negative figures reinforce a substantial deterioration in profitability or book value relative to equity, which may reflect losses, asset impairments, or extraordinary charges impacting overall financial performance.

Overall, the ROE trajectory illustrates a period of robust profitability through early 2022, followed by a progressive decline into negative territory by the end of 2024 and into mid-2025. This pattern underscores the importance of analyzing underlying operational factors and external market conditions contributing to these changes in the company's efficiency and profitability metrics over the specified timeframe.