Analysis of Geographic Areas
Estée Lauder Cos. Inc. operates in 3 regions: The Americas; Europe, the Middle East & Africa; and Asia/Pacific.
Area Profit Margin
Estée Lauder Cos. Inc., profit margin by geographic area
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| The Americas | -1.62% | 25.07% | 13.64% | -27.52% | -4.09% | 4.21% |
| Europe, the Middle East & Africa | 13.54% | 17.71% | 19.22% | 15.92% | 31.29% | 27.03% |
| Asia/Pacific | 15.86% | 14.62% | 18.10% | 17.37% | 19.85% | 18.90% |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
The geographic area profit margin data reveals distinct trends over the six fiscal years ending June 30, 2023, across three primary regions: The Americas, Europe, the Middle East & Africa, and Asia/Pacific.
- The Americas
-
This region exhibits high volatility and significant fluctuations in profit margin percentages. Starting at 4.21% in 2018, the margin plummeted to a negative -4.09% in 2019, further declining sharply to -27.52% in 2020. A recovery phase is evident in 2021 and 2022, with margins improving significantly to 13.64% and then 25.07%, respectively. However, the margin dropped again to -1.62% in 2023. This erratic pattern suggests substantial challenges and instability within this region, possibly influenced by external market conditions or operational factors leading to rapid shifts in profitability.
- Europe, the Middle East & Africa (EMEA)
-
EMEA consistently delivers robust profit margins, demonstrating resilience despite some volatility. The margin increased from 27.03% in 2018 to a peak of 31.29% in 2019, then experienced a notable decline to 15.92% in 2020. From 2021 onwards, the margin showed partial recovery, stabilizing between approximately 13.54% and 19.22%, with a slight downward trend in the most recent period (13.54% in 2023). These figures highlight a strong baseline profitability with some pressure in recent years, potentially due to economic factors impacting the region or strategic investments affecting short-term margins.
- Asia/Pacific
-
Profit margins in Asia/Pacific remained relatively stable across the period, fluctuating moderately without extreme variations. Margins started at 18.9% in 2018, rose slightly to 19.85% in 2019, and then declined gradually to 17.37% in 2020. Subsequently, they modestly improved to 18.1% in 2021 before experiencing a gradual decrease to 14.62% in 2022, with a minor rebound to 15.86% in 2023. This steady range indicates consistent performance with manageable variability, reflecting balanced growth and controlled profitability in this region.
Overall, the data indicates that The Americas region experienced significant instability and wide swings in profit margin, unlike the more stable and comparatively higher margins in EMEA and Asia/Pacific. EMEA showed strong but slightly declining margins after a peak, while Asia/Pacific demonstrated moderate but consistent profitability with minor fluctuations. These patterns highlight regional disparities in financial performance and suggest potential areas for further strategic focus and risk management.
Area Profit Margin: The Americas
Estée Lauder Cos. Inc.; The Americas; area profit margin calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | (73) | 1,159) | 518) | (1,044) | (194) | 211) |
| Net sales | 4,518) | 4,623) | 3,797) | 3,794) | 4,741) | 5,015) |
| Area Profitability Ratio | ||||||
| Area profit margin1 | -1.62% | 25.07% | 13.64% | -27.52% | -4.09% | 4.21% |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area profit margin = 100 × Operating income (loss) ÷ Net sales
= 100 × -73 ÷ 4,518 = -1.62%
- Net Sales
- Net sales exhibited a declining trend from 2018 through 2020, dropping from $5015 million to $3794 million. This was followed by a recovery period in 2021 and 2022, with sales increasing to $3797 million and $4623 million respectively. However, in 2023 there was a slight decrease to $4518 million, indicating some volatility but a general rebound compared to the lowest point in 2020.
- Operating Income (Loss)
- Operating income demonstrated considerable variability over the period. It declined from a positive $211 million in 2018 to a loss of $194 million in 2019 and further worsened significantly to a loss of $1044 million in 2020. A strong recovery occurred in 2021 and 2022, with operating income rising to positive values of $518 million and $1159 million respectively. However, 2023 saw operating income drop back into negative territory at a loss of $73 million, reflecting instability and challenges in maintaining profitability.
- Area Profit Margin
- The area profit margin closely mirrored the fluctuations in operating income. Starting at 4.21% in 2018, the margin turned negative in 2019 and further deteriorated to a low of -27.52% in 2020, indicating significant losses relative to sales. There was a substantial rebound in 2021 and 2022, with profit margins improving to positive levels of 13.64% and 25.07% respectively, suggesting improved operational efficiency or cost management during these years. However, in 2023 the margin fell sharply again to -1.62%, signaling renewed pressure on profitability.
- Summary
- Overall, the financial data reveals a volatile performance pattern within the Americas segment. The period from 2018 through 2020 was marked by declining sales, increasing losses, and deteriorating profit margins, likely reflecting adverse market conditions or operational challenges. The partial recovery observed in 2021 and 2022 indicates improved sales and profitability, but the regression in 2023 suggests the return of difficulties impacting operating results and margins. This cyclical behavior highlights the need for continued focus on stabilizing revenues and managing costs to sustain profitability.
Area Profit Margin: Europe, the Middle East & Africa
Estée Lauder Cos. Inc.; Europe, the Middle East & Africa; area profit margin calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | 843) | 1,360) | 1,335) | 997) | 2,019) | 1,523) |
| Net sales | 6,225) | 7,681) | 6,946) | 6,262) | 6,452) | 5,634) |
| Area Profitability Ratio | ||||||
| Area profit margin1 | 13.54% | 17.71% | 19.22% | 15.92% | 31.29% | 27.03% |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area profit margin = 100 × Operating income (loss) ÷ Net sales
= 100 × 843 ÷ 6,225 = 13.54%
- Net sales
- Net sales exhibited variability over the analyzed period. Beginning at $5,634 million in mid-2018, sales increased to a peak of $7,681 million in mid-2022, reflecting steady growth for most of the period. However, there was a notable decline in net sales in mid-2023, dropping to $6,225 million, which indicates a significant reduction compared to the previous year.
- Operating income
- Operating income showed considerable fluctuations throughout the timeframe. After an initial increase from $1,523 million in mid-2018 to $2,019 million in mid-2019, operating income declined sharply in mid-2020 to $997 million. A partial recovery followed in the next two years, reaching $1,360 million by mid-2022, yet the income substantially declined again in mid-2023 to $843 million, the lowest point in the period examined.
- Area profit margin
- The area profit margin demonstrated a declining trend after an initial rise. It started at 27.03% in mid-2018 and improved further to 31.29% by mid-2019, indicating enhanced profitability. Nevertheless, it experienced a significant drop in mid-2020 to 15.92%, followed by a modest recovery to around 19% in mid-2021. Thereafter, the margin declined consistently, reaching 13.54% in mid-2023, thus reflecting a weakening profit position relative to sales.
- Overall analysis
- The data reveals that the Europe, Middle East & Africa region faced considerable operational and market challenges during the observed period. While net sales initially grew, the recent decline coupled with decreasing profit margins and operating income suggests increased cost pressures or competitive factors impacting profitability. The fluctuating results especially from mid-2020 onwards may reflect external disruptions affecting the business environment, leading to volatility in financial performance.
Area Profit Margin: Asia/Pacific
Estée Lauder Cos. Inc.; Asia/Pacific; area profit margin calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | 824) | 795) | 993) | 736) | 729) | 575) |
| Net sales | 5,194) | 5,437) | 5,486) | 4,238) | 3,673) | 3,042) |
| Area Profitability Ratio | ||||||
| Area profit margin1 | 15.86% | 14.62% | 18.10% | 17.37% | 19.85% | 18.90% |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area profit margin = 100 × Operating income (loss) ÷ Net sales
= 100 × 824 ÷ 5,194 = 15.86%
- Net Sales
- Net sales in the Asia/Pacific region exhibited a consistent upward trend from 2018 to 2021, increasing from $3,042 million to $5,486 million. However, in the last two years, there was a slight decline to $5,437 million in 2022 and further to $5,194 million in 2023, indicating a potential slowdown or market challenges in recent periods.
- Operating Income
- Operating income showed general growth from 2018 through 2021, rising from $575 million to a peak of $993 million. This was followed by a decrease to $795 million in 2022, with a modest recovery to $824 million in 2023. The initial growth suggests improved operational efficiency or increased profitability, while the more recent decline may reflect rising costs or other operational pressures.
- Area Profit Margin
- The area profit margin fluctuated over the six-year period. After increasing from 18.9% in 2018 to a peak of 19.85% in 2019, it declined to 17.37% in 2020. It showed a slight recovery to 18.1% in 2021 but then decreased notably to 14.62% in 2022, followed by a small improvement to 15.86% in 2023. This pattern suggests margin pressure in the latter years, which may be due to increased costs, pricing challenges, or changes in the sales mix.
- Overall Insights
- Over the examined period, the region experienced robust sales growth until 2021, which was accompanied by increasing operating income and relatively stable profit margins initially. However, the period from 2022 onward indicates potential challenges, as evidenced by decreasing net sales, reduced operating income, and compressed profit margins. This suggests heightened competitive or economic pressures affecting profitability and revenue growth in this geographic segment.
Area Return on Assets (Area ROA)
Estée Lauder Cos. Inc., ROA by geographic area
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| The Americas | -0.55% | 10.55% | 4.55% | -11.36% | -2.53% | 2.79% |
| Europe, the Middle East & Africa | 14.09% | 23.53% | 22.60% | 23.08% | 52.28% | 39.51% |
| Asia/Pacific | 19.91% | 19.20% | 21.23% | 17.22% | 44.64% | 49.83% |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
- The Americas
- The return on assets (ROA) in The Americas region exhibits considerable volatility over the analyzed period. Beginning at 2.79% in mid-2018, the ROA declines sharply to -2.53% in 2019 and further deteriorates to -11.36% in 2020, indicating significant challenges during that timeframe. A notable recovery occurs in 2021, with ROA rising to 4.55%, followed by an even stronger performance in 2022, reaching 10.55%. However, in 2023, ROA turns negative again, registering -0.55%, suggesting renewed difficulties or market pressures in the most recent period.
- Europe, the Middle East & Africa (EMEA)
- ROA in the EMEA region demonstrates a generally positive and relatively stable trend, though with some fluctuations. The highest value is observed in 2019 at 52.28%, succeeding an already strong performance of 39.51% in 2018. Subsequently, ROA declines sharply in 2020 to 23.08% but remains at a similar level through 2021 and 2022 (22.6% and 23.53%, respectively), indicating sustained, albeit reduced, profitability. In 2023, ROA decreases further to 14.09%, signaling a downward trend yet remaining positive and substantially higher than the Americas region.
- Asia/Pacific
- The Asia/Pacific region shows a strong initial ROA of 49.83% in 2018, followed by a gradual decline to 44.64% in 2019 and a more pronounced drop to 17.22% in 2020. From 2020 onwards, ROA stabilizes around the 19-21% range, with 21.23% in 2021, a slight decrease to 19.2% in 2022, and a marginal increase to 19.91% in 2023. This pattern suggests that while the region experienced a decrease from peak profitability levels, it has maintained consistent positive returns in recent years.
- Overall Insights
- Comparatively, the Asia/Pacific and EMEA regions consistently deliver positive returns on assets with Asia/Pacific showing the highest levels through most years despite recent declines. The Americas region exhibits significantly more volatility and negative returns in multiple years, reflecting possible regional challenges or market conditions affecting asset profitability. The downward trend in EMEA and stabilization in Asia/Pacific could indicate shifts in market dynamics or operational efficiency changes. The fluctuation in The Americas underscores a need for targeted strategies to improve asset utilization and profitability in this region.
Area ROA: The Americas
Estée Lauder Cos. Inc.; The Americas; area ROA calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | (73) | 1,159) | 518) | (1,044) | (194) | 211) |
| Total assets | 13,292) | 10,989) | 11,387) | 9,189) | 7,661) | 7,558) |
| Area Profitability Ratio | ||||||
| Area ROA1 | -0.55% | 10.55% | 4.55% | -11.36% | -2.53% | 2.79% |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area ROA = 100 × Operating income (loss) ÷ Total assets
= 100 × -73 ÷ 13,292 = -0.55%
- Operating Income (Loss)
- The operating income exhibited substantial volatility over the analyzed years. Starting at a positive level of 211 million USD in 2018, it experienced a sharp decline to a loss of 194 million USD in 2019. The downward trend continued with an even larger loss of 1,044 million USD in 2020. However, a strong recovery occurred in 2021 with an operating income of 518 million USD, followed by further improvement to 1,159 million USD in 2022. Despite these gains, there was a reversal in 2023, when the operating income again dropped to a negative value of 73 million USD.
- Total Assets
- Total assets showed a consistent upward trend throughout the period. Beginning at 7,558 million USD in 2018, assets increased moderately to 7,661 million USD in 2019, then showed more accelerated growth reaching 9,189 million USD in 2020. The upward momentum continued in 2021, reaching 11,387 million USD, followed by a slight decline to 10,989 million USD in 2022 before rising to the highest recorded value of 13,292 million USD in 2023. This trend indicates a steady expansion of asset base over the years.
- Area Return on Assets (ROA)
- The area ROA mirrored the volatility observed in operating income. It began positively at 2.79% in 2018, then shifted to negative returns in 2019 (-2.53%) and substantially deteriorated in 2020 to -11.36%. The metric recovered strongly in 2021 and 2022, registering 4.55% and 10.55% respectively, reflecting improved operational efficiency or profitability relative to asset base. However, in 2023, the ROA declined again to a slightly negative value of -0.55%, signaling a deterioration in asset utilization effectiveness during that year.
- Summary Insights
- The financial performance of the geographic area presents notable fluctuations especially in operating income and returns, with recovery periods followed by downturns. Despite these swings, the asset base shows consistent growth, which may indicate ongoing investments or expansion efforts. The mismatch between asset growth and fluctuating profitability and ROA in recent years suggests challenges in converting asset investments into stable operating earnings. The volatility in profitability metrics underscores the need for further analysis into underlying causes such as market conditions, cost management, or operational changes.
Area ROA: Europe, the Middle East & Africa
Estée Lauder Cos. Inc.; Europe, the Middle East & Africa; area ROA calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | 843) | 1,360) | 1,335) | 997) | 2,019) | 1,523) |
| Total assets | 5,985) | 5,781) | 5,907) | 4,319) | 3,862) | 3,855) |
| Area Profitability Ratio | ||||||
| Area ROA1 | 14.09% | 23.53% | 22.60% | 23.08% | 52.28% | 39.51% |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area ROA = 100 × Operating income (loss) ÷ Total assets
= 100 × 843 ÷ 5,985 = 14.09%
The financial data for the Europe, the Middle East & Africa region reveals several notable trends over the observed six-year span.
- Operating Income (Loss)
- Operating income exhibited growth from 2018 to 2019, reaching a peak of 2,019 million US dollars. However, in 2020 there was a substantial decline to 997 million US dollars, likely impacted by global economic conditions. Subsequently, operating income showed a partial recovery in 2021 and 2022, reaching 1,360 million US dollars. In 2023, it decreased again, falling to 843 million US dollars, indicating renewed challenges or reduced profitability within this period.
- Total Assets
- Total assets remained relatively stable between 2018 and 2019, increasing slightly from 3,855 to 3,862 million US dollars. From 2020 to 2021, there was a significant increase to 5,907 million US dollars, which may reflect strategic investments or asset acquisitions. A minor decline occurred in 2022 to 5,781 million US dollars, followed by a moderate rise to 5,985 million US dollars in 2023. Overall, the asset base expanded substantially over the period, particularly from 2019 onwards.
- Area Return on Assets (ROA)
- Return on assets demonstrated a peak of 52.28% in 2019, indicating high profitability relative to asset size. This was followed by a sharp decline in 2020 to 23.08%, maintaining a comparable level into 2021 and 2022 around 22-23%. In 2023, ROA declined further to 14.09%, suggesting decreasing efficiency in utilizing assets to generate operating income. The downward trend in ROA aligns with lower operating income despite a growing asset base during this period.
In summary, the region experienced significant fluctuations in operating income with an initial peak in 2019, a pronounced dip in 2020, partial recovery and subsequent decline by 2023. Total assets increased notably especially post-2019, while the area ROA followed a declining trajectory after a high point in 2019, indicating challenges in maintaining asset profitability amid changing market conditions.
Area ROA: Asia/Pacific
Estée Lauder Cos. Inc.; Asia/Pacific; area ROA calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | 824) | 795) | 993) | 736) | 729) | 575) |
| Total assets | 4,138) | 4,140) | 4,677) | 4,273) | 1,633) | 1,154) |
| Area Profitability Ratio | ||||||
| Area ROA1 | 19.91% | 19.20% | 21.23% | 17.22% | 44.64% | 49.83% |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area ROA = 100 × Operating income (loss) ÷ Total assets
= 100 × 824 ÷ 4,138 = 19.91%
- Operating Income (Loss)
- The operating income for the Asia/Pacific geographic area demonstrated an overall upward trend from 2018 to 2023, beginning at $575 million in 2018 and increasing to $824 million by 2023. There was a noticeable peak in 2021 at $993 million, followed by a decline in 2022 to $795 million, then a slight recovery in 2023. This pattern suggests variability in operating performance with a strong recovery phase occurring mid-period.
- Total Assets
- Total assets saw a significant increase over the period with an initial value of $1,154 million in 2018. This value grew substantially to $4,273 million by 2020, followed by a smaller increase to $4,677 million in 2021. Afterward, total assets decreased slightly to $4,140 million in 2022 and remained relatively stable in 2023 at $4,138 million. The large asset growth by 2020 may indicate considerable investments or acquisitions, with stabilization and slight reduction in assets in recent years.
- Area Return on Assets (ROA)
- The area ROA exhibited a declining trend from a high of 49.83% in 2018 to 19.91% in 2023, with the most significant drop occurring between 2019 (44.64%) and 2020 (17.22%). Although there was a partial recovery in 2021 to 21.23%, and slight decreases and increases thereafter, the ROA in 2023 remained substantially lower than in the initial years. This decline in ROA indicates reduced efficiency in generating profit from the assets employed within the Asia/Pacific region over the analyzed period.
- Summary
- The financial data reflects growing asset investment coupled with fluctuating operating income and declining asset profitability in the Asia/Pacific area. The substantial asset growth by 2020, with relatively modest gains in operating income during the same period, contributed to the pronounced decrease in ROA. The period post-2020 shows stabilization in both total assets and operating income, although profitability relative to assets remains below initial levels. These trends may highlight challenges in maintaining efficient asset utilization amidst expansion in the Asia/Pacific operations.
Area Asset Turnover
Estée Lauder Cos. Inc., asset turnover by geographic area
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| The Americas | 0.34 | 0.42 | 0.33 | 0.41 | 0.62 | 0.66 |
| Europe, the Middle East & Africa | 1.04 | 1.33 | 1.18 | 1.45 | 1.67 | 1.46 |
| Asia/Pacific | 1.26 | 1.31 | 1.17 | 0.99 | 2.25 | 2.64 |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
- The Americas
-
The asset turnover ratio in The Americas region exhibits a declining trend overall from June 2018 to June 2023. Starting at 0.66 in 2018, the ratio decreased steadily to 0.34 by 2023. Notably, the ratio dropped sharply between 2019 (0.62) and 2021 (0.33), with a slight recovery observed in 2022 (0.42) before declining again in 2023. This pattern suggests challenges in efficiently utilizing assets to generate revenue in this region, possibly indicating either increased asset base without proportional revenue growth or declining sales productivity.
- Europe, the Middle East & Africa (EMEA)
-
The EMEA region shows a more variable asset turnover ratio while maintaining a relatively higher efficiency compared to The Americas. The ratio began at 1.46 in 2018, peaked at 1.67 in 2019, then experienced a downward trend hitting 1.04 by 2023. The most noticeable decrease occurred post-2019 through 2023, with a short-lived recovery in 2022 to 1.33. This fluctuation may reflect market dynamics, operational adjustments, or changes in asset investment in the region, with an overall reduction in the ability to generate revenue from assets in recent years.
- Asia/Pacific
-
The Asia/Pacific region had the highest asset turnover ratios across all periods but has witnessed a significant decline over time. The ratio started at 2.64 in 2018, sharply falling to 0.99 in 2020 amid a notable dip, likely influenced by external factors reducing sales efficiency or increased asset investment without commensurate revenue. From 2020 to 2023, there was a gradual recovery, with the ratio improving to 1.26, though still below pre-2020 levels. This indicates some improvement in asset utilization but suggests ongoing challenges in restoring previous efficiency.
- Summary
-
Across all geographic segments, asset turnover ratios display a general downward trend over the six-year period analyzed. Asia/Pacific consistently shows the highest ratios but suffered a significant drop around 2020 with some recovery thereafter. EMEA's ratios fluctuate but trend toward decline, and The Americas show the lowest and steadily decreasing efficiency in asset use for revenue generation. These patterns may point to broader market conditions, strategic investment decisions, or operational disruptions affecting asset productivity differently by region.
Area Asset Turnover: The Americas
Estée Lauder Cos. Inc.; The Americas; area asset turnover calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 4,518) | 4,623) | 3,797) | 3,794) | 4,741) | 5,015) |
| Total assets | 13,292) | 10,989) | 11,387) | 9,189) | 7,661) | 7,558) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 0.34 | 0.42 | 0.33 | 0.41 | 0.62 | 0.66 |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area asset turnover = Net sales ÷ Total assets
= 4,518 ÷ 13,292 = 0.34
The analysis of the annual data for the Americas geographic area reveals several notable trends in net sales, total assets, and area asset turnover over the six-year period ending June 30, 2023.
- Net Sales
- Net sales exhibited a fluctuating pattern with an overall decline between 2018 and 2023. The sales started at 5,015 million US dollars in 2018, then decreased to 4,741 million in 2019. A significant drop occurred in 2020, with net sales falling to 3,794 million, likely influenced by external factors impacting the market environment. Sales remained relatively stable in 2021 at 3,797 million, followed by a recovery in 2022 to 4,623 million. However, this was slightly offset in 2023, when sales decreased again to 4,518 million.
- Total Assets
- Total assets displayed a consistent upward trend throughout the period. From 7,558 million US dollars in 2018, assets increased steadily each year, reaching 7,661 million in 2019 and then rising more sharply to 9,189 million in 2020. This growth accelerated further in 2021, with assets reaching 11,387 million, followed by a modest decrease in 2022 to 10,989 million. The upward trajectory resumed in 2023, culminating in a peak of 13,292 million. This progressive asset growth suggests ongoing investment or acquisition activity in the Americas area.
- Area Asset Turnover
- The area asset turnover ratio demonstrated a declining trend over the period, indicating reduced efficiency in utilizing assets to generate net sales. The ratio began at 0.66 in 2018 and decreased gradually to 0.62 in 2019, then sharply fell to 0.41 in 2020 and further to 0.33 in 2021. There was a slight recovery to 0.42 in 2022, but it dropped again to 0.34 in 2023. This pattern aligns with the increase in total assets outpacing the recovery or growth in net sales, thus reflecting less efficient asset use.
In summary, the data indicates that while the Americas region has increased its asset base significantly, net sales have experienced volatility with an overall decline from 2018 to 2023. The decreasing asset turnover ratio highlights a challenge in converting asset investments into proportional sales growth, suggesting potential areas for operational or strategic review to improve asset efficiency.
Area Asset Turnover: Europe, the Middle East & Africa
Estée Lauder Cos. Inc.; Europe, the Middle East & Africa; area asset turnover calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 6,225) | 7,681) | 6,946) | 6,262) | 6,452) | 5,634) |
| Total assets | 5,985) | 5,781) | 5,907) | 4,319) | 3,862) | 3,855) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 1.04 | 1.33 | 1.18 | 1.45 | 1.67 | 1.46 |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area asset turnover = Net sales ÷ Total assets
= 6,225 ÷ 5,985 = 1.04
- Net Sales
- Net sales in the Europe, the Middle East & Africa region show an overall increasing trend from 2018 through 2022, rising from $5,634 million to a peak of $7,681 million in 2022. However, there is a notable decline in 2023, with net sales decreasing to $6,225 million. This suggests that while the region experienced sustained growth over the five years, the most recent year reflected a significant drop, potentially indicating market challenges or other adverse factors affecting sales.
- Total Assets
- Total assets in the region increased gradually from $3,855 million in 2018 to $4,862 million approximately in 2020, followed by a more pronounced increase to $5,907 million in 2021. Thereafter, total assets slightly decreased to $5,781 million in 2022, then rose again to $5,985 million in 2023. This pattern shows a general growth in asset base over the period, with some minor fluctuations in the later years, possibly reflecting investment cycles or asset revaluation.
- Area Asset Turnover
- The area asset turnover ratio, which measures the efficiency of asset use in generating sales, exhibits a declining trend over the analyzed period. It started at 1.46 in 2018, increased to 1.67 in 2019, then decreased steadily to 1.04 by 2023. The peak in 2019 indicates the highest efficiency in asset utilization, while the subsequent decline suggests diminishing returns on assets or increasing asset levels not matched by proportional sales increases. The drop in turnover in 2023 corresponds with the decrease in net sales and the increase in total assets, indicating that assets are generating less sales revenue in the most recent year.
Area Asset Turnover: Asia/Pacific
Estée Lauder Cos. Inc.; Asia/Pacific; area asset turnover calculation
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 5,194) | 5,437) | 5,486) | 4,238) | 3,673) | 3,042) |
| Total assets | 4,138) | 4,140) | 4,677) | 4,273) | 1,633) | 1,154) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 1.26 | 1.31 | 1.17 | 0.99 | 2.25 | 2.64 |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 2023 Calculation
Area asset turnover = Net sales ÷ Total assets
= 5,194 ÷ 4,138 = 1.26
- Net Sales
- Net sales in the Asia/Pacific region experienced a general upward trend from 2018 through 2021, increasing from $3,042 million in 2018 to a peak of $5,486 million in 2021. However, there was a decline in net sales during the subsequent two years, dropping to $5,437 million in 2022 and further to $5,194 million in 2023. This indicates that while growth was strong through 2021, the last two years showed a slight contraction in sales, possibly reflecting changing market conditions or regional challenges.
- Total Assets
- Total assets showed significant growth from 2018 to 2021, increasing from $1,154 million to $4,677 million, reflecting substantial investment or asset acquisition during this period. After 2021, total assets declined to $4,140 million in 2022 and remained relatively stable at $4,138 million in 2023. This suggests that asset growth halted and consolidated in the most recent years, possibly due to asset optimization or reduced capital expenditure.
- Area Asset Turnover Ratio
- The asset turnover ratio, which measures the efficiency of asset utilization to generate sales, declined sharply from 2.64 in 2018 to 0.99 in 2020. This decrease highlights a period of lower efficiency amidst rapid asset growth. Subsequently, the ratio improved to 1.17 in 2021 and further increased to 1.31 in 2022, before slightly declining to 1.26 in 2023. Despite the improvement post-2020, the ratio remained below the initial 2018 level, indicating that asset utilization, while recovered, has not returned to its earlier efficiency.
Net sales
Estée Lauder Cos. Inc., net sales by geographic area
US$ in millions
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| The Americas | 4,518) | 4,623) | 3,797) | 3,794) | 4,741) | 5,015) |
| Europe, the Middle East & Africa | 6,225) | 7,681) | 6,946) | 6,262) | 6,452) | 5,634) |
| Asia/Pacific | 5,194) | 5,437) | 5,486) | 4,238) | 3,673) | 3,042) |
| Returns associated with restructuring and other activities | (27) | (4) | (14) | —) | (3) | (8) |
| Total | 15,910) | 17,737) | 16,215) | 14,294) | 14,863) | 13,683) |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
Over the examined period, the geographic net sales display distinct regional trends and overall company performance fluctuations. The Americas region experienced a decline from 2018 to 2020, dropping from 5,015 million USD to 3,794 million USD, reflecting a significant contraction likely influenced by market or operational challenges. Recovery efforts appear to have partially succeeded as sales stabilized around 3,800 million USD in 2021 and then increased to 4,623 million USD in 2022, though a slight decrease to 4,518 million USD was noted in 2023.
In the Europe, Middle East & Africa (EMEA) segment, there was a consistent upward trajectory from 2018 to 2022, with sales rising from 5,634 million USD to a peak of 7,681 million USD. However, this momentum reversed in 2023, with net sales falling sharply to 6,225 million USD. This decline could suggest emerging regional headwinds or competitive pressures affecting these markets.
The Asia/Pacific region demonstrated robust growth over the period, expanding from 3,042 million USD in 2018 to 5,486 million USD in 2021. Despite a minor contraction thereafter, sales remained relatively high at 5,437 million USD in 2022 and 5,194 million USD in 2023. This region's consistent performance underscores its increasing contribution to overall sales.
Returns associated with restructuring and other activities exhibited sporadic fluctuations, with losses ranging from minor decreases such as -3 million USD in 2019 to a larger impact of -27 million USD in 2023. These negative returns correlate with restructuring costs and may have had a dampening effect on net sales during specific years, particularly in 2023.
Overall, total net sales followed an upward trend from 2018 (13,683 million USD) to a peak in 2022 (17,737 million USD), indicating general growth and expansion. The decline to 15,910 million USD in 2023 marks a notable contraction, suggesting the influence of adverse conditions or market dynamics in the most recent period. The interplay of regional variations and restructuring-related returns shaped the net sales trajectory across these years.
- The Americas
- Initial decline from 5,015 million USD in 2018 to 3,794 million USD in 2020, partial recovery to 4,623 million USD in 2022, slight decrease in 2023 to 4,518 million USD.
- Europe, Middle East & Africa
- Steady growth from 5,634 million USD in 2018 to a peak of 7,681 million USD in 2022, followed by a significant decline to 6,225 million USD in 2023.
- Asia/Pacific
- Consistent robust growth from 3,042 million USD in 2018 to 5,486 million USD in 2021, maintaining strong sales above 5,000 million USD through 2023.
- Returns Associated with Restructuring and Other Activities
- Irregular negative impacts, notably -27 million USD in 2023, indicating sporadic restructuring costs affecting net sales.
- Total Net Sales
- Growth from 13,683 million USD in 2018 to a high of 17,737 million USD in 2022, followed by a decline to 15,910 million USD in 2023, reflecting mixed regional dynamics and operational impacts.
Operating income (loss)
Estée Lauder Cos. Inc., operating income (loss) by geographic area
US$ in millions
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| The Americas | (73) | 1,159) | 518) | (1,044) | (194) | 211) |
| Europe, the Middle East & Africa | 843) | 1,360) | 1,335) | 997) | 2,019) | 1,523) |
| Asia/Pacific | 824) | 795) | 993) | 736) | 729) | 575) |
| Charges associated with restructuring and other activities | (85) | (144) | (228) | (83) | (241) | (257) |
| Total | 1,509) | 3,170) | 2,618) | 606) | 2,313) | 2,052) |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
The operating income figures across the geographic segments exhibit considerable variability over the six-year period. The Americas region shows a volatile trajectory, beginning with a positive operating income in 2018, followed by negative values in the subsequent two years, reaching a significant low in 2020. A recovery is observed in 2021 and 2022, with income rising sharply and peaking in 2022, before declining again into a negative result in 2023. This pattern suggests fluctuating performance and potential challenges in market conditions or operational issues in this region.
In contrast, the Europe, Middle East & Africa region demonstrates generally positive operating income figures, with a strong increase from 2018 to 2019. Despite a notable decline in 2020, the region maintains a positive trend afterward, with values recovering steadily in 2021 and 2022, followed by a decrease in 2023. Although the most recent year shows a downturn, the segment remains profitable throughout the period, indicating resilience relative to other regions.
The Asia/Pacific segment reflects moderate growth from 2018 through 2021, with a peak in 2021. Subsequent years show a modest decrease but overall stable performance, maintaining positive operating income figures. This consistent profitability suggests sustained demand and operational effectiveness in this area.
Charges associated with restructuring and other activities are consistently negative across all years, indicating ongoing costs linked to organizational changes or other adjustments. These charges fluctuate in magnitude but generally trend downward after a peak in 2018 and 2019, showing some improvement or reduced restructuring activities recently.
The total operating income aligns with the aggregate of the geographic segments, displaying an upward trend from 2018 to 2019, followed by a sharp decline in 2020, corresponding with global economic disruptions. A substantial rebound occurs in 2021 and 2022, with total operating income reaching its highest in 2022. However, 2023 experiences a pronounced decline, nearly halving the prior year's figure. This overall pattern suggests that while the company has demonstrated a capacity to recover from adverse conditions, recent performance indicates renewed pressures or challenges impacting profitability.
- Geographic Segment Trends
- The Americas show significant volatility with negative results in multiple years and a rebound offset by a recent downturn.
- Europe, Middle East & Africa maintain consistent profitability with fluctuations but no negative operating income overall.
- Asia/Pacific steadily grows and remains stable, indicating consistent positive contributions.
- Restructuring charges reduce over time but continue to exert a negative impact.
- Total operating income follows a U-shaped pattern with recovery post-2020 but a sharp decrease in 2023.
Total assets
Estée Lauder Cos. Inc., total assets by geographic area
US$ in millions
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | |
|---|---|---|---|---|---|---|
| The Americas | 13,292) | 10,989) | 11,387) | 9,189) | 7,661) | 7,558) |
| Europe, the Middle East & Africa | 5,985) | 5,781) | 5,907) | 4,319) | 3,862) | 3,855) |
| Asia/Pacific | 4,138) | 4,140) | 4,677) | 4,273) | 1,633) | 1,154) |
| Total | 23,415) | 20,910) | 21,971) | 17,781) | 13,156) | 12,567) |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
- Overall Asset Growth
- The total assets across all geographic areas exhibit a strong upward trend over the analyzed six-year period. Beginning at approximately $12.6 billion in mid-2018, total assets increased steadily year over year, reaching about $23.4 billion by mid-2023. This represents an overall growth of roughly 86%, indicating significant expansion in asset base.
- The Americas
- Assets in the Americas show consistent growth throughout the period. Starting at $7.6 billion in 2018, there was a moderate increase to $7.7 billion by 2019, followed by a notable jump to nearly $9.2 billion in 2020. Growth accelerated in subsequent years, reaching approximately $11.4 billion in 2021. After a slight decline to $11.0 billion in 2022, assets rebounded strongly to $13.3 billion in 2023. Overall, the Americas remain the largest contributor to total assets, with an approximate 76% increase over six years.
- Europe, Middle East & Africa (EMEA)
- The EMEA region's assets maintained relative stability in the early years, starting at $3.9 billion in 2018 and showing marginal increase to $3.9 billion in 2019. A gradual rise continued into 2020 with $4.3 billion, followed by a sharp increase to $5.9 billion in 2021. A slight decline occurred in 2022 to $5.8 billion, but assets modestly increased again in 2023 to around $6.0 billion. Over the full period, asset growth in EMEA is solid, with an increase of approximately 55% from 2018 through 2023.
- Asia/Pacific
- Assets in the Asia/Pacific region demonstrate significant variability and strong growth early in the period. Initial values were relatively low, at about $1.2 billion in 2018, increasing to $1.6 billion in 2019. A substantial surge is observed from 2019 to 2020, with assets more than doubling to approximately $4.3 billion. Following this peak, assets continued to rise slightly in 2021 to $4.7 billion but then declined gradually to $4.1 billion in both 2022 and 2023. Despite the recent decline, the overall increase from 2018 to 2023 is notable, exceeding 250% growth.
- Comparative Regional Insights
- The Americas consistently hold the majority share of total assets, contributing between approximately 60% and 57% across the years. EMEA's share remains stable around 30% to 25%. The Asia/Pacific region, while starting with the smallest asset base, has shown exceptional growth, particularly in the 2019–2020 period, reflecting rapid expansion or increased investment in that region, though its share has somewhat stabilized with a modest decline in recent years.
- Volatility and Recent Trends
- Across all regions, the year 2020 marks a notable inflection point with substantial increases in assets particularly in the Americas and Asia/Pacific. This may reflect strategic growth initiatives or revaluation effects. The subsequent slight decline in some regions in 2022, especially in the Americas and Asia/Pacific, contrasts with the rebound in total assets in 2023, suggesting a degree of volatility potentially driven by external market conditions or internal adjustments.