The Estée Lauder Companies Inc. stock research
FY2025 Q3
The Estée Lauder Companies (EL) Gross Margin — Quarter Ended Mar 31, 2025
Revenue and gross profit both decreased compared to the immediately preceding quarter and the same quarter one year earlier. Gross margin improved versus the prior year but weakened relative to the prior quarter, driven by a proportionally larger decline in cost of revenue than in revenue over the year-ago period.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q3
Revenue and gross profit both decreased compared to the immediately preceding quarter and the same quarter one year earlier. Gross margin improved versus the prior year but weakened relative to the prior quarter, driven by a proportionally larger decline in cost of revenue than in revenue over the year-ago period.
- The gross margin improvement over the prior year reflects a sharper reduction in cost of revenue relative to the decline in revenue, resulting in a higher margin percentage. The sequential weakening from the prior quarter occurred because revenue fell more than cost of revenue on a relative basis.
- Compared with the immediately preceding quarter, gross margin was lower (75.0% vs 76.1%), while compared with the same quarter one year earlier, gross margin was higher (75.0% vs 71.9%). Revenue declined from both comparison periods.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
75.0%
Gross profit
$2.7B
Revenue
$3.5B
Cost of revenue
$889.0M
Quarter-over-quarter change
-1.1 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 |
|---|---|---|---|---|
| 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% |
| Mar 31, 2025 | $3.5B | $2.7B | $889.0M | 75.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
-1.1 pts
Year-over-year change
Mar 31, 2024
+3.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improvement over the prior year reflects a sharper reduction in cost of revenue relative to the decline in revenue, resulting in a higher margin percentage. The sequential weakening from the prior quarter occurred because revenue fell more than cost of revenue on a relative basis.
Compared with the immediately preceding quarter, gross margin was lower (75.0% vs 76.1%), while compared with the same quarter one year earlier, gross margin was higher (75.0% vs 71.9%). Revenue declined from both comparison periods.
Monitor the trend in cost of revenue given its pivotal role in driving margin improvements over the prior year.