Analysis of Profitability Ratios
Beginner level
Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Estée Lauder Cos. Inc., profitability ratios
Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Estée Lauder Cos. Inc.’s gross profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Estée Lauder Cos. Inc.’s operating profit margin ratio improved from 2017 to 2018 and from 2018 to 2019. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Estée Lauder Cos. Inc.’s net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Estée Lauder Cos. Inc.’s ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Estée Lauder Cos. Inc.’s ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
Gross Profit Margin
Estée Lauder Cos. Inc., gross profit margin calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross profit | 11,476 | 10,839 | 9,387 | 9,081 | 8,680 | 8,811 | |
| Net sales | 14,863 | 13,683 | 11,824 | 11,262 | 10,780 | 10,969 | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 77.21% | 79.22% | 79.39% | 80.63% | 80.51% | 80.32% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Colgate-Palmolive Co. | 59.42% | 59.39% | 60.05% | 60.04% | 58.62% | — | |
| Kimberly-Clark Corp. | 32.71% | 30.28% | 35.89% | 36.54% | 35.63% | — | |
| Nike Inc. | 44.67% | 43.84% | 44.58% | 46.24% | 45.97% | 44.77% | |
Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).
1 2019 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 11,476 ÷ 14,863 = 77.21%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Estée Lauder Cos. Inc.’s gross profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
Operating Profit Margin
Estée Lauder Cos. Inc., operating profit margin calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 2,313 | 2,052 | 1,692 | 1,610 | 1,606 | 1,828 | |
| Net sales | 14,863 | 13,683 | 11,824 | 11,262 | 10,780 | 10,969 | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 15.56% | 15.00% | 14.31% | 14.30% | 14.90% | 16.66% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Colgate-Palmolive Co. | 22.65% | 23.76% | 23.22% | 25.25% | 17.39% | — | |
| Kimberly-Clark Corp. | 16.21% | 12.06% | 18.07% | 18.22% | 8.68% | — | |
| Nike Inc. | 12.20% | 12.21% | 13.83% | 13.91% | 13.64% | 13.24% | |
| Operating Profit Margin, Sector | |||||||
| Personal Goods | 15.47% | 14.77% | 16.68% | 17.22% | 13.40% | — | |
| Operating Profit Margin, Industry | |||||||
| Consumer Goods | 13.69% | 11.91% | 16.28% | 14.97% | 13.59% | — | |
Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).
1 2019 Calculation
Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × 2,313 ÷ 14,863 = 15.56%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Estée Lauder Cos. Inc.’s operating profit margin ratio improved from 2017 to 2018 and from 2018 to 2019. |
Net Profit Margin
Estée Lauder Cos. Inc., net profit margin calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings attributable to The Estée Lauder Companies Inc. | 1,785 | 1,108 | 1,249 | 1,115 | 1,089 | 1,204 | |
| Net sales | 14,863 | 13,683 | 11,824 | 11,262 | 10,780 | 10,969 | |
| Profitability Ratio | |||||||
| Net profit margin1 | 12.01% | 8.10% | 10.56% | 9.90% | 10.10% | 10.98% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Colgate-Palmolive Co. | 15.08% | 15.44% | 13.10% | 16.06% | 8.63% | — | |
| Kimberly-Clark Corp. | 11.69% | 7.63% | 12.48% | 11.90% | 5.45% | — | |
| Nike Inc. | 10.30% | 5.31% | 12.34% | 11.61% | 10.70% | 9.69% | |
| Net Profit Margin, Sector | |||||||
| Personal Goods | 11.73% | 8.15% | 12.26% | 12.31% | 8.89% | — | |
| Net Profit Margin, Industry | |||||||
| Consumer Goods | 9.28% | 9.80% | 10.70% | 12.37% | 10.26% | — | |
Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).
1 2019 Calculation
Net profit margin = 100 × Net earnings attributable to The Estée Lauder Companies Inc. ÷ Net sales
= 100 × 1,785 ÷ 14,863 = 12.01%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Estée Lauder Cos. Inc.’s net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
Return on Equity (ROE)
Estée Lauder Cos. Inc., ROE calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings attributable to The Estée Lauder Companies Inc. | 1,785 | 1,108 | 1,249 | 1,115 | 1,089 | 1,204 | |
| Stockholders’ equity, The Estée Lauder Companies Inc. | 4,386 | 4,688 | 4,384 | 3,572 | 3,643 | 3,855 | |
| Profitability Ratio | |||||||
| ROE1 | 40.70% | 23.63% | 28.49% | 31.20% | 29.89% | 31.24% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Colgate-Palmolive Co. | 2,023.08% | — | — | — | — | — | |
| Kimberly-Clark Corp. | — | — | 362.16% | — | — | — | |
| Nike Inc. | 44.57% | 19.70% | 34.17% | 30.67% | 25.76% | 24.88% | |
| ROE, Sector | |||||||
| Personal Goods | 76.52% | 48.55% | 56.40% | 61.23% | 42.57% | — | |
| ROE, Industry | |||||||
| Consumer Goods | 22.64% | 23.47% | 24.05% | 28.75% | 23.93% | — | |
Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).
1 2019 Calculation
ROE = 100 × Net earnings attributable to The Estée Lauder Companies Inc. ÷ Stockholders’ equity, The Estée Lauder Companies Inc.
= 100 × 1,785 ÷ 4,386 = 40.70%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Estée Lauder Cos. Inc.’s ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
Return on Assets (ROA)
Estée Lauder Cos. Inc., ROA calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings attributable to The Estée Lauder Companies Inc. | 1,785 | 1,108 | 1,249 | 1,115 | 1,089 | 1,204 | |
| Total assets | 13,156 | 12,567 | 11,568 | 9,223 | 8,239 | 7,869 | |
| Profitability Ratio | |||||||
| ROA1 | 13.57% | 8.82% | 10.80% | 12.08% | 13.22% | 15.30% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Colgate-Palmolive Co. | 15.74% | 19.74% | 15.97% | 20.14% | 11.57% | — | |
| Kimberly-Clark Corp. | 14.11% | 9.71% | 15.04% | 14.83% | 6.83% | — | |
| Nike Inc. | 16.99% | 8.58% | 18.23% | 17.57% | 15.15% | 14.48% | |
| ROA, Sector | |||||||
| Personal Goods | 15.39% | 11.09% | 15.63% | 16.53% | 11.93% | — | |
| ROA, Industry | |||||||
| Consumer Goods | 5.91% | 6.30% | 6.79% | 8.21% | 7.08% | — | |
Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).
1 2019 Calculation
ROA = 100 × Net earnings attributable to The Estée Lauder Companies Inc. ÷ Total assets
= 100 × 1,785 ÷ 13,156 = 13.57%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Estée Lauder Cos. Inc.’s ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |