Estée Lauder Cos. Inc. (NYSE:EL)

Total Asset Turnover

The reported total asset turnover declined steadily from 1.09 in mid-2018 to 0.68 by mid-2023, indicating a decreasing efficiency in using assets to generate revenue. The adjusted total asset turnover similarly fell from 0.9 to 0.71 over the same period, reflecting consistent underlying trends after adjustments.

Current Ratio

The reported current ratio exhibited fluctuations but trended downward overall, dropping from 1.86 in 2018 to 1.46 in 2023. The adjusted current ratio showed a similar pattern, peaking near 1.97 in 2021 before decreasing to 1.55 in 2023. This suggests a gradual weakening in short-term liquidity and the company’s ability to cover current liabilities.

Debt to Equity

The reported debt to equity ratio rose significantly between 2019 and 2020, jumping from 0.78 to 1.56, before partially retreating and then increasing again to 1.45 by 2023. The adjusted ratio followed this trend more pronouncedly, peaking at 2.01 in 2020 and ending at 1.49 in 2023. This indicates increased leverage and financial risk during this period, with some moderation but persisting elevated levels in recent years.

Debt to Capital

Both reported and adjusted debt to capital ratios increased notably in 2020, reaching 0.61 and 0.67 respectively, and remained elevated thereafter, suggesting a higher reliance on debt in the overall capitalization structure compared to earlier years, with a slight decline from peak values but sustained elevation relative to pre-2020 levels.

Financial Leverage

Financial leverage ratios, both reported and adjusted, climbed markedly from 2018 to 2020, with the reported measure rising from 2.68 to 4.52 and the adjusted from 3.18 to 3.98. Despite a decrease in 2021, leverage increased again through 2023, reflecting a recurring trend of greater use of debt relative to equity and assets.

Net Profit Margin

Reported net profit margin displayed considerable volatility, dropping sharply in 2020 to 4.79% from double-digit values and rebounding to 17.7% in 2021 before declining again to 6.32% in 2023. Adjusted margins followed a somewhat similar pattern but with lower variability, indicating impacts from non-operating or one-time items in reported figures. Overall, profitability saw a sharp decline in the pandemic-impacted year followed by inconsistent recovery.

Return on Equity (ROE)

ROE experienced significant fluctuation: the reported figure surged from 23.63% in 2018 to a peak of 47.38% in 2021, then dropped to 18.01% by 2023. The adjusted ROE mirrored this trend with lower peaks and troughs, reaching a high in 2021 and tapering off substantially afterward. This pattern aligns with changes in profitability and leverage, illustrating variability in shareholder returns.

Return on Assets (ROA)

Reported ROA declined from a high of 13.57% in 2019 to 3.85% in 2020, recovered to 13.06% in 2021, and then dropped again to 4.3% in 2023. Adjusted ROA showed a more conservative pattern, moving within a lower range overall but following the same directional changes. This reflects the company’s challenges with asset utilization and profitability during and following the pandemic.

The analyzed financial data reveals several key trends and patterns for the company over the six-year period ending June 30, 2023.

Net Sales and Adjusted Net Sales

Net sales exhibited an overall upward trend from 2018 through 2022, increasing from $13,683 million to a peak of $17,737 million. However, in 2023, net sales declined to $15,910 million, indicating a reduction after several years of growth. Adjusted net sales follow a similar pattern, increasing steadily until 2022 before experiencing a decrease in 2023, suggesting that adjustments for non-recurring items or other factors did not significantly alter the underlying sales trend.

Total Assets and Adjusted Total Assets

Total assets increased substantially over the period, rising from $12,567 million in 2018 to $23,415 million in 2023. Notably, there was a significant jump between 2019 and 2020, which continued into 2021. Adjusted total assets reflect a similar pattern but start from a higher base in 2018 ($15,253 million compared to $12,567 million) and experienced more moderate year-over-year increases thereafter, culminating at $22,571 million in 2023. These trends suggest ongoing investment or asset acquisition activities, with adjustments accounting for possible revaluations or asset classifications.

Reported and Adjusted Total Asset Turnover

Both reported and adjusted total asset turnover ratios demonstrate a downward trend over the years. Reported total asset turnover peaked at 1.13 in 2019 before declining sharply to 0.74 in 2021, with a partial recovery to 0.85 in 2022, and then falling again to 0.68 in 2023. Adjusted total asset turnover shows a comparable trajectory, starting at 0.90 in 2018, declining to 0.76 in 2021, recovering to 0.88 in 2022, and then decreasing to 0.71 in 2023. This decline in asset turnover ratios indicates that the company has been generating less revenue per dollar of assets over time, which may suggest reduced operational efficiency or significant asset base growth outpacing sales increases.

Overall, the data suggests that while the company expanded its asset base considerably and achieved sales growth through most periods, the declining asset turnover ratios highlight potential challenges in generating proportional revenue from its assets. The dip in sales in 2023 after years of growth signals a possible shift in market conditions or company performance, warranting further investigation.

Current Assets

Current assets demonstrated an overall upward trend from 2018 to 2021, increasing from $6,168 million to $9,768 million. However, a slight decline occurred thereafter, with current assets decreasing to $9,139 million by 2023.

Current Liabilities

Current liabilities consistently increased throughout the entire period, rising from $3,310 million in 2018 to $6,240 million in 2023. The increase was relatively steady year over year without any periods of decline.

Reported Current Ratio

The reported current ratio declined over the six-year span, starting at 1.86 in 2018 and falling to 1.46 in 2023. This ratio exhibited fluctuations, dipping to 1.57 in 2019, improving to 1.84 by 2021, and then gradually decreasing again through 2023, indicating a reduced margin of short-term liquidity over time.

Adjusted Current Assets

Adjusted current assets followed a similar pattern to reported current assets, growing from $6,197 million in 2018 to a peak of $9,788 million in 2021, before declining slightly to $9,155 million in 2023. The adjustments made did not significantly alter the underlying trend.

Adjusted Current Liabilities

Adjusted current liabilities steadily increased from $3,310 million in 2018 to $5,917 million in 2023, mirroring the behavior of reported current liabilities. The increase was consistent, though slightly less pronounced when adjusted in some years.

Adjusted Current Ratio

The adjusted current ratio showed an overall decreasing trend, beginning at 1.87 in 2018 and declining to 1.55 by 2023. It peaked at 1.97 in 2021, reflecting improved liquidity in that year, but the subsequent decline indicates weakened short-term financial strength relative to liabilities.

Overall Insights

The data reflects growth in both current assets and current liabilities over the period, with liabilities increasing at a slightly faster rate. The company's liquidity ratios, both reported and adjusted, illustrate a gradual decline in the ability to cover short-term obligations with short-term assets. The peak in liquidity ratios around 2021 suggests that year as a relative high point before financial pressures increased slightly by 2023. Maintaining or improving liquidity could be a focus area given the downward trend.

Analysis of the financial data reveals fluctuating trends in the company's leverage and equity components over the examined period.

Total debt

Total debt demonstrated variability, initially decreasing from 3,544 million US$ in mid-2018 to 3,412 million US$ in mid-2019, followed by a significant increase to 6,136 million US$ in mid-2020. After a moderate decrease in 2021 and 2022, reaching 5,412 million US$, it sharply rose again to 8,114 million US$ by mid-2023. This indicates an overall upward trend in total debt, with peaks notably in 2020 and 2023.

Stockholders’ equity

The reported stockholders' equity generally declined from 4,688 million US$ in 2018 to a low of 3,935 million US$ in 2020, before rebounding appreciably to 6,057 million US$ in 2021. Following this peak, equity decreased slightly to 5,590 million US$ in 2022 and stabilized near that level at 5,585 million US$ in 2023. The trend suggests variability, with a distinct recovery after 2020.

Reported debt to equity ratio

The reported debt to equity ratio followed a similar volatile pattern as total debt and equity. It fluctuated around 0.76 to 0.78 in 2018 and 2019, surged to 1.56 in 2020 reflecting significantly increased leverage, then declined to 0.92 in 2021 and modestly increased to 0.97 in 2022. By mid-2023, the ratio increased sharply again to 1.45, indicating elevated financial leverage relative to equity.

Adjusted total debt

Adjusted total debt greatly increased from 6,321 million US$ in 2018 to a peak of 8,789 million US$ in 2020, followed by a decrease to 7,645 million US$ in 2022, before rising sharply to 10,169 million US$ in 2023. This points to a general escalation in adjusted liabilities, especially prominent in the latest period.

Adjusted total equity

Adjusted equity showed a moderate decline from 4,801 million US$ in 2018 to 4,372 million US$ in 2020, then increased significantly to 7,688 million US$ in 2021. Subsequently, it decreased to 6,926 million US$ in 2022 and further to 6,847 million US$ in 2023. Despite some fluctuations, adjusted equity overall increased since 2020, although it has slightly moderated in recent years.

Adjusted debt to equity ratio

This ratio illustrated substantial variation, remaining stable at approximately 1.32 through 2018 and 2019, then rising sharply to 2.01 in 2020. It subsequently decreased to near unity at 1.05 in 2021, slightly increased to 1.10 in 2022, and then surged again to 1.49 in 2023. This highlights periods of increased adjusted financial leverage, particularly in 2020 and 2023, with some improvement in 2021 followed by renewed pressure on equity coverage.

Overall, the financial data shows a cyclical pattern in both debt and equity measures, with notable stress on leverage ratios during 2020 and again in 2023. The company appears to have raised substantial debt levels in these years, accompanied by fluctuations in equity that impact both reported and adjusted leverage ratios. Equity levels recovered markedly post-2020 but have slightly decreased in the most recent years. The recurrent increases in debt relative to equity suggest heightened financial risk and the need for ongoing management of capital structure to maintain balanced leverage.

Total Debt

The total debt exhibited fluctuations over the observed period. Initially, there was a slight decline from 3,544 million USD in mid-2018 to 3,412 million USD in mid-2019. This was followed by a substantial increase to 6,136 million USD in 2020. Subsequent years saw some reduction with totals of 5,569 million USD in 2021 and 5,412 million USD in 2022, before rising sharply to 8,114 million USD in 2023, marking the highest debt level in the period.

Total Capital

Total capital showed an overall upward trend with moderate volatility. The period began at 8,232 million USD in 2018, dipped slightly to 7,798 million USD in 2019, then increased markedly to 10,071 million USD in 2020. A continued upward trajectory occurred through 2021 and 2022, reaching 11,626 million and 11,002 million USD respectively. The highest point was achieved in 2023 at 13,699 million USD, indicating growth in capital resources.

Reported Debt to Capital Ratio

This ratio tracked the proportion of debt relative to total capital, showing variability. The ratio was relatively stable near 0.43-0.44 in 2018 and 2019, increased significantly to 0.61 in 2020, then decreased to 0.48 and 0.49 in 2021 and 2022 respectively. It increased again to 0.59 in 2023. These shifts reflect the changes in debt and capital levels, with a noteworthy peak in 2020 corresponding to the debt surge.

Adjusted Total Debt

Adjusted total debt, which likely includes additional liabilities or adjustments, followed a pattern similar to total debt but with generally higher values. It started at 6,321 million USD in 2018, remaining almost stable in 2019 at 6,238 million USD. There was a sharp rise to 8,789 million USD in 2020, then a decline to 8,099 million USD in 2021, further decreasing to 7,645 million USD in 2022, and subsequently rising again to 10,169 million USD in 2023.

Adjusted Total Capital

Adjusted total capital showed substantial growth over the period. Beginning at 11,122 million USD in 2018, it remained nearly steady at 10,951 million USD in 2019. A significant increase occurred in 2020, reaching 13,161 million USD. The upward trend continued more strongly in subsequent years, with 15,787 million USD in 2021 and 14,571 million USD in 2022. The highest adjusted capital was observed in 2023 at 17,016 million USD.

Adjusted Debt to Capital Ratio

This ratio mirrored the reported debt-to-capital ratio in overall pattern but at elevated levels, reflecting adjustments. It held steady at 0.57 from 2018 to 2019, peaked at 0.67 in 2020, then declined to 0.51 in 2021 and slightly increased to 0.52 in 2022. In 2023, the ratio rose again to 0.6, indicating a relative increase in adjusted debt compared to adjusted capital.

Overall, the financial data indicate periods of increased leverage, particularly in 2020 and again in 2023, as evidenced by rising debt levels and corresponding debt-to-capital ratios. Both total and adjusted capital grew steadily over the years, showing a strengthening capital base, although the increases in debt have moderated the improvements in leverage ratios. The adjustments to debt and capital suggest recognition of additional financial obligations or assets, which influences the leverage assessment. The company's debt management appears dynamic with varying leverage, possibly responding to strategic or market conditions impacting the balance sheet structure over time.

The financial data indicates several noteworthy trends regarding the company's asset base, equity, and financial leverage over the six-year period analyzed.

Total assets

Total assets increased overall from 12,567 million US dollars in 2018 to 23,415 million US dollars in 2023. There was a steady rise through 2021, peaking at 21,971 million US dollars, followed by a slight dip in 2022, and a rebound in 2023 to the highest value in the period.

Stockholders' equity

Stockholders' equity exhibited a declining trend from 4,688 million US dollars in 2018 to 3,935 million US dollars in 2020. However, there was a significant recovery in 2021, with equity rising sharply to 6,057 million US dollars. In subsequent years, equity decreased moderately but remained above pre-2021 levels.

Reported financial leverage

The reported financial leverage ratio moved upward overall, starting at 2.68 in 2018 and reaching the highest value of 4.52 in 2020. This was followed by a reduction in 2021 to 3.63, a slight increase in 2022, and another rise in 2023 to 4.19. These fluctuations suggest variations in the company's mix of debt relative to equity.

Adjusted total assets

Adjusted total assets displayed growth from 15,253 million US dollars in 2018 to 22,571 million US dollars in 2023, with a peak in 2021 at 21,360 million US dollars. Similar to reported total assets, there was a decline in 2022 before increasing again in 2023.

Adjusted total equity

Adjusted total equity trends mirror those of reported equity, decreasing from 4,801 million US dollars in 2018 to 4,372 million US dollars in 2020, then rising sharply in 2021 to 7,688 million US dollars. Afterward, adjusted equity slightly declined in 2022 and 2023, but sustained a higher level compared to pre-2021 figures.

Adjusted financial leverage

Adjusted financial leverage ratio increased from 3.18 in 2018 to 3.98 in 2020, then dropped significantly in 2021 to 2.78. It rose modestly to 2.92 in 2022 and further to 3.30 in 2023. The leverage pattern indicates an initial increase followed by deleveraging in 2021 and a moderate increase thereafter.

Overall, the company experienced asset growth accompanied by fluctuations in equity levels and financial leverage. The pronounced equity increase in 2021 may indicate an equity injection or improved profitability, resulting in deleveraging during that period. Subsequent moderate declines in equity and increased leverage suggest a selective return to higher borrowing or capital structure adjustments. These dynamics reflect active financial management amid growth and changing market conditions.

The financial data reveals significant fluctuations in the performance metrics over the six-year period analyzed. Net sales demonstrate an overall upward trend from 13,683 million US dollars in June 2018 to a peak of 17,737 million US dollars in June 2022, followed by a decline to 15,910 million in June 2023. This pattern suggests growth in revenue streams up to 2022, with a notable decrease thereafter.

Net earnings attributable to the company display considerable volatility. Initial figures increase from 1,108 million in 2018 to 1,785 million in 2019, then sharply drop to 684 million in 2020. A strong recovery occurs in 2021 reaching 2,870 million, followed by a decline in the subsequent two years, ending at 1,006 million in 2023. These swings indicate variability in profitability and potential influences from external or internal factors affecting earnings.

Reported net profit margin mirrors the fluctuations in net earnings relative to sales. The margin increases from 8.1% in 2018 to 12.01% in 2019, falls to 4.79% in 2020, surges to a high of 17.7% in 2021, then decreases again to 6.32% by 2023. This suggests that while the company occasionally achieves high profitability relative to sales, margin sustainability has been inconsistent.

Adjusted net earnings, which likely account for non-recurring or extraordinary items, also reflect a similar pattern of variability. Values rise from 1,404 million in 2018 to 1,605 million in 2019, drop dramatically to 309 million in 2020, peak at 2,903 million in 2021, and fall again to 797 million in 2023. The adjustment appears to have a significant impact during 2020 and 2021, indicating exceptional events or adjustments affecting reported earnings.

Adjusted net sales closely follow the trend of net sales, increasing from 13,683 million in 2018 to a peak of 17,728 million in 2022, before declining to 16,120 million in 2023. The relatively small differences between adjusted and reported sales suggest limited adjustments in revenue recognition or related items over the period.

The adjusted net profit margin presents volatility similar to the reported net profit margin, with a high of 17.8% in 2021 and lows around 2.17% in 2020 and 4.94% in 2023. This margin indicates that after adjustments, profitability still experienced considerable fluctuation and was particularly low in 2020, potentially due to extraordinary impacts that year.

Overall, the data depicts a company experiencing significant earnings volatility, with strong sales growth up to 2022 followed by a downturn in 2023. Profitability margins have not maintained consistent levels, reflecting possible external market pressures or internal operational challenges, especially evident during 2020 and 2023. The substantial recovery in 2021 underscores the company's ability to rebound, although sustaining such profitability levels appears challenging in the most recent periods.

The financial data reveals notable fluctuations in earnings and equity metrics over the analyzed period.

Net Earnings Attributable to The Estée Lauder Companies Inc.

Net earnings demonstrated variability, initially increasing from 1,108 million USD in 2018 to a peak of 1,785 million USD in 2019. However, earnings sharply declined in 2020 to 684 million USD, likely indicative of significant challenges during that year. A strong recovery followed in 2021, reaching a high of 2,870 million USD, then slightly contracted to 2,390 million USD in 2022, before declining again to 1,006 million USD in 2023.

Stockholders’ Equity

Stockholders' equity showed a downward trend from 4,688 million USD in 2018 to 3,935 million USD in 2020, reflecting either net losses or distributions exceeding earnings. In 2021, equity increased sharply to 6,057 million USD, sustaining levels above 5,500 million USD through 2022 and 2023, indicating renewed capital strength.

Reported Return on Equity (ROE)

Reported ROE exhibited significant volatility. It peaked at 40.7% in 2019, dropped to 17.38% in 2020, and reached the highest point of the period in 2021 at 47.38%. Subsequent years showed a decline to 42.75% in 2022 and further down to 18.01% in 2023, corresponding with the fluctuations in net earnings and equity.

Adjusted Net Earnings

Adjusted net earnings followed a pattern similar to reported net earnings but with differences in magnitude. After an increase from 1,404 million USD in 2018 to 1,605 million USD in 2019, there was a dramatic drop to 309 million USD in 2020. In 2021, adjusted earnings surged to 2,903 million USD, then declined to 1,884 million USD in 2022 and further down to 797 million USD in 2023, highlighting underlying operational volatility.

Adjusted Total Equity

Adjusted total equity mirrored the pattern of stockholders’ equity but at consistently higher levels. Beginning at 4,801 million USD in 2018, it decreased to 4,372 million USD by 2020, then substantially increased to 7,688 million USD in 2021. It slightly declined in the following two years, ending at 6,847 million USD in 2023, indicating adjustments may have improved the representation of financial stability.

Adjusted Return on Equity (ROE)

Adjusted ROE was initially robust at 29.24% in 2018 and reached 34.05% in 2019 before plunging to 7.07% in 2020, reflecting the impact of external or non-recurring factors. The ratio rebounded to 37.76% in 2021 but then decreased notably over the last two years to 27.2% in 2022 and 11.64% in 2023, aligning with trends in adjusted earnings and equity.

Overall, the data reflect a period of substantial operational and financial fluctuation, with a nadir around 2020 followed by a strong but variable recovery phase. The pronounced volatility in earnings and returns on equity suggests sensitivity to market or internal factors affecting profitability and capital structure. Both reported and adjusted metrics point to higher profitability and equity strength in 2021, with a moderate decline in subsequent years, warranting close monitoring of ongoing performance and capital management.

Net Earnings Attributable to The Estée Lauder Companies Inc.

The net earnings show significant fluctuations over the analyzed period. Starting at $1,108 million in 2018, earnings increased to a peak of $1,785 million in 2019 before sharply declining to $684 million in 2020. A substantial recovery occurred in 2021, reaching a high of $2,870 million. However, earnings declined again to $2,390 million in 2022 and further dropped to $1,006 million in 2023.

Total Assets

Total assets steadily increased from $12,567 million in 2018 to $21,971 million in 2021, indicating growth in asset base. Minor contraction occurred in 2022 with assets slightly decreasing to $20,910 million, followed by a rebound to $23,415 million in 2023.

Reported Return on Assets (ROA)

The reported ROA follows a pattern similar to net earnings. It rose from 8.82% in 2018 to a high of 13.57% in 2019, then fell sharply to 3.85% in 2020. It rebounded to 13.06% in 2021, decreased to 11.43% in 2022, and dropped again to 4.3% in 2023. This volatility suggests fluctuations in profitability relative to asset base.

Adjusted Net Earnings

Adjusted net earnings present a similar trend but with less variability in some years. After rising from $1,404 million in 2018 to $1,605 million in 2019, there was a drastic fall to $309 million in 2020. Adjusted earnings surged to $2,903 million in 2021, decreased to $1,884 million in 2022, and declined further to $797 million in 2023.

Adjusted Total Assets

Adjusted total assets show a general upward trend. From $15,253 million in 2018, assets increased to $21,360 million in 2021. Similar to total assets, a slight dip to $20,225 million occurred in 2022, with a subsequent rise to $22,571 million in 2023.

Adjusted ROA

Adjusted ROA mirrors the volatility of adjusted net earnings. It rose from 9.2% in 2018 to 10.21% in 2019, followed by a sharp decline to 1.78% in 2020. It then increased notably to 13.59% in 2021 before declining to 9.32% in 2022 and further to 3.53% in 2023. This reflects significant fluctuations in profitability excluding certain adjustments, relative to adjusted assets.