The Estée Lauder Companies Inc. stock research
FY2024 Q2
The Estée Lauder Companies (EL) Gross Margin — Quarter Ended Dec 31, 2023
Revenue and gross profit both increased from the preceding quarter, while cost of revenue rose only slightly, resulting in an improved gross margin. Compared to the same quarter one year earlier, revenue and gross profit were lower, cost of revenue was stable, and the gross margin weakened marginally.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2024 Q2
Revenue and gross profit both increased from the preceding quarter, while cost of revenue rose only slightly, resulting in an improved gross margin. Compared to the same quarter one year earlier, revenue and gross profit were lower, cost of revenue was stable, and the gross margin weakened marginally.
- The strongest observable margin driver is the change in the relationship between revenue and cost of revenue: revenue grew more than cost of revenue from the prior quarter, boosting the gross margin. Sequentially, cost of revenue increased at a slower pace than revenue, while year-over-year cost of revenue remained unchanged despite lower revenue, compressing the margin.
- Sequentially, revenue, gross profit, and cost of revenue were all higher, with the gross margin improving. Year-over-year, revenue and gross profit were lower, cost of revenue was flat, and the gross margin weakened slightly.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
73.0%
Gross profit
$3.1B
Revenue
$4.3B
Cost of revenue
$1.2B
Quarter-over-quarter change
+3.4 pts
Year-over-year change
-0.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $3.8B | $2.6B | $1.2B | 69.1% |
| Jun 30, 2023 | $3.6B | $2.4B | $1.2B | 67.8% |
| Sep 30, 2023 | $3.5B | $2.4B | $1.1B | 69.6% |
| Dec 31, 2023 | $4.3B | $3.1B | $1.2B | 73.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+3.4 pts
Year-over-year change
Dec 31, 2022
-0.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the change in the relationship between revenue and cost of revenue: revenue grew more than cost of revenue from the prior quarter, boosting the gross margin. Sequentially, cost of revenue increased at a slower pace than revenue, while year-over-year cost of revenue remained unchanged despite lower revenue, compressing the margin.
Sequentially, revenue, gross profit, and cost of revenue were all higher, with the gross margin improving. Year-over-year, revenue and gross profit were lower, cost of revenue was flat, and the gross margin weakened slightly.
Monitor the trajectory of gross margin relative to the prior-year level, as the current quarter's margin, while improved sequentially, remains slightly below the same quarter last year.