The Estée Lauder Companies Inc. stock research
FY2025 Q2
The Estée Lauder Companies (EL) Gross Margin — Quarter Ended Dec 31, 2024
Revenue decreased year-over-year but cost of revenue fell more, improving gross margin; sequentially, revenue rose and margin expanded. The company's liquidity discussion in the filing notes a decrease in cash and cash equivalents.
Gross margin takeaway
Quarter ended Dec 31, 2024 · FY2025 Q2
Revenue decreased year-over-year but cost of revenue fell more, improving gross margin; sequentially, revenue rose and margin expanded. The company's liquidity discussion in the filing notes a decrease in cash and cash equivalents.
- The strongest observable driver is the reduction in cost of revenue relative to revenue, which allowed gross margin to rise despite lower year-over-year revenue.
- Compared to the prior quarter, gross margin improved as revenue increased and cost of revenue rose at a slower pace. Versus the same quarter a year ago, gross margin was higher, driven by a larger decline in cost of revenue than in revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
76.1%
Gross profit
$3.0B
Revenue
$4.0B
Cost of revenue
$957.0M
Quarter-over-quarter change
+3.7 pts
Year-over-year change
+3.1 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, 2024 | $3.9B | $2.8B | $1.1B | 71.9% |
| Jun 30, 2024 | $3.9B | $2.8B | $1.1B | 71.8% |
| Sep 30, 2024 | $3.4B | $2.4B | $928.0M | 72.4% |
| Dec 31, 2024 | $4.0B | $3.0B | $957.0M | 76.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2024
+3.7 pts
Year-over-year change
Dec 31, 2023
+3.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the reduction in cost of revenue relative to revenue, which allowed gross margin to rise despite lower year-over-year revenue.
Compared to the prior quarter, gross margin improved as revenue increased and cost of revenue rose at a slower pace. Versus the same quarter a year ago, gross margin was higher, driven by a larger decline in cost of revenue than in revenue.
Monitor the trajectory of cost of revenue, as its relative movement has been the primary factor in margin changes.