# Estée Lauder Companies Inc. (EL) Q4 2025 Financial Results Summary
**Release Date:** August 20, 2025
The Estée Lauder Companies Inc. (NYSE: EL) reported its financial results for the fiscal year ended June 30, 2025. The company continues to navigate a challenging business environment, with a keen focus on its strategic vision of Beauty Reimagined. Here’s a summary of the key financial metrics and updates from the report:
### Financial Highlights for Fiscal 2025
– **Net Sales:**
– Reported at **$14,326 million**, down **8%** compared to **$15,608 million** in 2024.
– Organic net sales also decreased by **8%**.
– **Gross Profit:**
– Declined to **$10,597 million**, a decrease of **5%** from **$11,184 million** in 2024.
– Gross margin increased to **74.0%**, up **230 basis points** from **71.7%** in the prior year.
– **Operating (Loss) Income:**
– Reported a loss of **$785 million**, down from a profit of **$970 million** in 2024, reflecting a decline of over **100%**.
– Operating margin fell to **-5.5%**, down from **6.2%** in the previous year.
– **Net (Loss) Earnings Per Common Share:**
– Reached **$(3.15)**, down from **$1.08**, reflecting a drop of over **100%**.
– Adjusted diluted net earnings per common share was **$1.51**, a decrease of **42%** compared to **$2.59**.
– **Adjusted Operating Income:**
– Stood at **$1,146 million**, down **28%** from **$1,588 million** in 2024.
– Adjusted operating margin decreased to **8.0%** from **10.2%**.
### Significant Operational Metrics
– **Effective Tax Rate:**
– Reported at **-8.9%**, decreased from **47.0%** in the previous year due to the establishment of a valuation allowance related to tax credits.
– **Net Cash Flows from Operating Activities:**
– Decreased to **$1.27 billion** from **$2.36 billion** in 2024, largely due to lower pre-tax earnings and unfavorable changes in operating assets and liabilities.
– **Capital Expenditures:**
– Reduced to **$602 million** from **$919 million** due to optimized investment strategy.
### Dividend Declaration
– The company announced a quarterly dividend of **$0.35** per share, scheduled for payment on **September 16, 2025**, to stockholders of record as of **September 2, 2025**.
### Performance by Product Category
– **Skin Care:**
– Net sales fell by **12%**, with significant contributions from brands like Estée Lauder and La Mer.
– **Makeup:**
– Experienced a **6% decline** driven by lower sales in the face subcategory and retail softness for brands such as M·A·C.
– **Fragrance:**
– Flat sales performance, with growth from Luxury Brands, including strong double-digit growth from Le Labo.
– **Hair Care:**
– Sales decreased by **10%**, primarily due to sluggish performance from Aveda.
### Regional Performance
– **Americas:**
– Sales decreased by **4%** to **$4,411 million**, reflecting soft retail performance.
– **Europe, the Middle East & Africa (EMEA):**
– Reported a sales drop of **12%** to **$5,375 million**.
– **Asia-Pacific:**
– Sales also declined by **7%** to **$4,537 million**, with difficulties in travel retail affecting results.
### Strategic Initiatives
– The company is committed to its **Profit Recovery and Growth Plan (PRGP)**. Although it recorded benefits from this plan, overall results for fiscal 2025 included significant costs from impairment charges and restructuring.
– Plans are in place to improve operating profitability moving forward, aiming for a solid double-digit adjusted operating margin in the coming years.
### Conclusion
The Estée Lauder Companies faced several operational challenges in fiscal 2025 amidst a volatile external environment but is confident in its strategic vision to achieve sales growth and profitability restoration in the coming fiscal year.
### CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions)
| Year Ended June 30 | Percentage Change | ||
|---|---|---|---|
| 2025 | 2024 | ||
| Net Sales | $14,326 | $15,608 | -8% |
| Cost of Sales | 3,729 | 4,424 | -16% |
| Gross Profit | 10,597 | 11,184 | -5% |
| Gross Margin | 74.0% | 71.7% | |
| Operating Expenses | |||
| Selling, General and Administrative | 9,456 | 9,621 | -2% |
| Restructuring and Other Charges | 481 | 122 | 100+% |
| Goodwill Impairment | 13 | 291 | -96% |
| Impairment of Other Intangible Assets | 1,273 | 180 | 100+% |
| Total Operating Expenses | 11,382 | 10,214 | 11% |
| Operating (Loss) Income | -785 | 970 | -100+% |
| Operating Margin | -5.5% | 6.2% | |
| Interest Expense | 357 | 378 | -6% |
| (Loss) Earnings Before Income Taxes | -1,040 | 772 | -100+% |
| Provision for Income Taxes | 93 | 363 | -74% |
| Net (Loss) Earnings | -1,133 | 409 | -100+% |
| Net (Loss) Earnings Attributable to The Estée Lauder Companies Inc. | -1,133 | 390 | -100% |
| Net Loss per Common Share | |||
| Basic | -3.15 | 1.09 | -100+% |
| Diluted | -3.15 | 1.08 | -100+% |
—
### CONDENSED CONSOLIDATED BALANCE SHEETS (in millions)
| June 30, 2025 | June 30, 2024 | |
|---|---|---|
| ASSETS | ||
| Cash and Cash Equivalents | $2,921 | $3,395 |
| Accounts Receivable, net | 1,530 | 1,727 |
| Inventory and Promotional Merchandise | 2,074 | 2,175 |
| Prepaid Expenses and Other Current Assets | 544 | 625 |
| Total Current Assets | 7,069 | 7,922 |
| Property, Plant and Equipment, net | 3,172 | 3,136 |
| Operating Lease Right-of-Use Assets | 1,952 | 1,833 |
| Other Assets | 7,699 | 8,786 |
| Total Assets | $19,892 | $21,677 |
| LIABILITIES AND EQUITY | ||
| Current Debt | $3 | $504 |
| Accounts Payable | 1,497 | 1,440 |
| Operating Lease Liabilities | 406 | 354 |
| Other Accrued Liabilities | 3,529 | 3,404 |
| Total Current Liabilities | 5,435 | 5,702 |
| Long-Term Debt | 7,314 | 7,267 |
| Long-Term Operating Lease Liabilities | 1,744 | 1,701 |
| Other Noncurrent Liabilities | 1,534 | 1,693 |
| Total Noncurrent Liabilities | 10,592 | 10,661 |
| Total Equity | 3,865 | 5,314 |
| Total Liabilities and Equity | $19,892 | $21,677 |
