ELEstée Lauder Companies (The)
Is the business good?
The checks split: earnings fully cash-backed (2.9×), but margins compressing.
Mixed fundamental signals. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash.
Operating margin has narrowed over the past few years, profitability per dollar of sales is eroding.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is EL?
Estée Lauder Companies (The) earns 8.1% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 0.91 points below what the capital costs: growth destroys value
- Operating margin
- 5.2%
Operating margin · Household & Personal Products median 11% · 12 months to Q4 2026
- Cash conversion
- 2.88×
Cash conversion · operating cash flow covers the operating profit after tax
- Gross margin
- 76%
Gross margin
| Year | Operating margin |
|---|---|
| FY2021 | 16% |
| FY2022 | 18% |
| FY2023 | 9.5% |
| FY2024 | 6.2% |
| FY2025 | −5.5% |
| FY2026 | 5.2% |
Details›
- Gross margin12 months to Q4 2026
- 76%
- Operating margin12 months to Q4 2026
- 5.2%
- Free cash flow margin
- 8.7%
- Revenue, trailing twelve months
- $15.0B
- Free cash flow, trailing twelve months
- $1.32B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 8.1%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Household & Personal Products
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