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EL, Estee Lauder Companies Inc. (The)

Personal Care Products consumer brand Cyclical

Lauder, is one of the world's leading manufacturers, marketers and sellers of quality skin care, makeup, fragrance and hair care products.

We are a steward of over 20 luxury and prestige brands globally.

Since the initial launch of the Est e Lauder brand in the United States, we have significantly expanded our consumer reach to approximately 150 countries and territories.

Latest annual: FY2025 10-K

EL · Estee Lauder Companies Inc. (The)

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$14.3B

−8.2% YoY · 0% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $14.8B 5-yr avg $16.0B

Gross margin 75% 5-yr avg 74%

Operating margin 2.9% 5-yr avg 8.8%

ROIC 3% 5-yr avg 16%

Owner-earnings margin 9% 5-yr avg 10%

Free cash flow margin 9% 5-yr avg 10%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 76% and operating margin about 14% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The operating margin has swung widely — from −5.5% to 18% — on a steadier 76% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Inventory runs near 14% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run in the teens (median 19%, above 15% in 5 of 9 years). Owner earnings agree: roughly 12% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

74% of revenue comes from outside the United States.

Revenue by geography, FY2025

Other Countries43%$6.2B
United States26%$3.8B
China25%$3.7B
South Korea5%$718M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2025

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
										Income statement
$11.8B	$13.7B	$14.9B	$14.3B	$16.2B	$17.7B	$15.9B	$15.6B	$14.3B	$14.8B	RevenueRevenue
79%	79%	77%	75%	76%	76%	71%	72%	74%	75%	Gross marginGross mgn
63%	63%	60%	60%	58%	56%	60%	62%	66%	64%	SG&A / revenueSG&A/rev
$1.7B	$2.1B	$2.3B	$606M	$2.6B	$3.2B	$1.5B	$970M	($785M)	$429M	Operating incomeOp. inc.
14.4%	15.0%	15.6%	4.2%	16.1%	17.9%	9.5%	6.2%	−5.5%	2.9%	Operating marginOp. mgn
$1.2B	$1.1B	$1.8B	$684M	$2.9B	$2.4B	$1.0B	$390M	($1.1B)	($248M)	Net incomeNet inc.
22%	44%	22%	34%	14%	21%	28%	48%	—	—	Effective tax rateTax rate
										Cash flow & returns
$1.8B	$2.6B	$2.5B	$2.3B	$3.6B	$3.0B	$1.7B	$2.4B	$1.3B	$1.8B	Operating cash flowOp. cash
$464M	$531M	$557M	$611M	$651M	$727M	$744M	$825M	$829M	$808M	DepreciationDeprec.
($142M)	$687M	($68M)	$772M	($217M)	($408M)	($286M)	$820M	$1.3B	$935M	Working capital & otherWC & other
$504M	$629M	$744M	$623M	$637M	$1.0B	$1.0B	$919M	$602M	$513M	CapexCapex
4.3%	4.6%	5.0%	4.4%	3.9%	5.9%	6.3%	5.9%	4.2%	3.5%	Capex / revenueCapex/rev
$1.3B	$1.9B	$2.0B	$1.7B	$3.0B	$2.3B	$987M	$1.4B	$670M	$1.3B	Owner earningsOwner earn.
10.9%	14.1%	13.2%	11.6%	18.5%	13.0%	6.2%	9.2%	4.7%	8.7%	Owner earnings marginOE mgn
$1.3B	$1.9B	$1.8B	$1.7B	$3.0B	$2.0B	$728M	$1.4B	$670M	$1.3B	Free cash flowFCF
10.9%	14.1%	11.9%	11.6%	18.5%	11.3%	4.6%	9.2%	4.7%	8.7%	Free cash flow marginFCF mgn
$1.7B	$0	$0	$1.0B	$1.1B	$3M	$0	$0	—	$0	AcquisitionsAcquis.
$486M	$546M	$609M	$503M	$753M	$840M	$925M	$947M	$618M	$507M	Dividends paidDiv. paid
$413M	$759M	$1.6B	$893M	$733M	$2.3B	$271M	$35M	$35M	—	BuybacksBuybacks
19%	19%	37%	8%	34%	36%	11%	5%	-8%	3%	ROICROIC
28%	24%	41%	17%	47%	43%	18%	7%	-29%	-6%	Return on equityROE
17%	12%	27%	5%	35%	28%	1%	−10%	−45%	−19%	Retained to equityRetained/eq
										Balance sheet
$1.7B	$2.7B	$3.0B	$5.0B	$5.0B	$4.0B	$4.0B	$3.4B	$2.9B	$3.7B	Cash & investmentsCash+inv
$1.4B	$1.5B	$1.8B	$1.2B	$1.7B	$1.6B	$1.5B	$1.7B	$1.5B	$1.7B	ReceivablesReceiv.
$1.5B	$1.6B	$2.0B	$2.1B	$2.5B	$2.9B	$3.0B	$2.2B	$2.1B	$1.9B	InventoryInvent.
$835M	$1.2B	$1.5B	$1.2B	$1.7B	$1.8B	$1.7B	$1.4B	$1.5B	$1.3B	Accounts payablePayables
$2.0B	$1.9B	$2.3B	$2.1B	$2.5B	$2.7B	$2.8B	$2.5B	$2.1B	$2.3B	Operating working capitalOper. WC
$5.0B	$6.2B	$7.2B	$8.9B	$9.8B	$9.3B	$9.1B	$7.9B	$7.1B	$7.5B	Current assetsCur. assets
$2.8B	$3.3B	$4.6B	$5.2B	$5.3B	$5.8B	$6.2B	$5.7B	$5.4B	$5.9B	Current liabilitiesCur. liab.
1.8×	1.9×	1.6×	1.7×	1.8×	1.6×	1.5×	1.4×	1.3×	1.3×	Current ratioCurr. ratio
$1.9B	$1.9B	$1.9B	$1.4B	$2.6B	$2.5B	$2.5B	$2.1B	$2.1B	$2.1B	GoodwillGoodwill
$11.6B	$12.6B	$13.2B	$17.8B	$22.0B	$20.9B	$23.4B	$21.7B	$19.9B	$19.7B	Total assetsAssets
$3.6B	$3.5B	$3.4B	$6.1B	$5.6B	$5.4B	$8.1B	$7.8B	$7.3B	$7.3B	Total debtDebt
$1.8B	$829M	$425M	$1.1B	$611M	$1.5B	$4.1B	$4.4B	$4.4B	$3.7B	Net debt / (cash)Net debt
16.5×	16.1×	17.4×	3.8×	15.1×	19.0×	5.9×	2.6×	-2.2×	1.3×	Interest coverageInt. cov.
$4.4B	$4.7B	$4.4B	$3.9B	$6.1B	$5.6B	$5.6B	$5.3B	$3.9B	$4.0B	Shareholders’ equityEquity
1.9%	1.7%	1.6%	1.5%	2.0%	1.9%	1.7%	2.1%	2.1%	2.0%	Stock comp / revenueSBC/rev
$28M	—	$68M	$812M	$54M	—	—	$291M	$13M	$848M	Goodwill written downGW imp.
										Per share
373M	376M	370M	367M	368M	365M	361M	361M	360M	365M	Shares out (diluted)Shares
$31.70	$36.42	$40.13	$38.96	$44.04	$48.61	$44.08	$43.26	$39.78	$40.69	Revenue / shareRev/sh
$3.35	$2.95	$4.82	$1.86	$7.79	$6.55	$2.79	$1.08	$-3.15	$-0.68	EPS (diluted)EPS
$3.45	$5.15	$5.29	$4.52	$8.13	$6.34	$2.73	$3.99	$1.86	$3.53	Owner earnings / shareOE/sh
$3.45	$5.15	$4.79	$4.52	$8.13	$5.48	$2.02	$3.99	$1.86	$3.53	Free cash flow / shareFCF/sh
$1.30	$1.45	$1.64	$1.37	$2.05	$2.30	$2.56	$2.62	$1.72	$1.39	Dividends / shareDiv/sh
$1.35	$1.67	$2.01	$1.70	$1.73	$2.85	$2.78	$2.55	$1.67	$1.41	Cap. spending / shareCapex/sh
$11.75	$12.48	$11.84	$10.72	$16.45	$15.32	$15.48	$14.73	$10.73	$10.95	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	8-yr	5-yr
Revenue / share	+2.9%/yr	+0.4%/yr
Owner earnings / share	−7.4%/yr	−16.3%/yr
Dividends / share	+3.5%/yr	+4.6%/yr
Capital spending / share	+2.7%/yr	−0.3%/yr
Book value / share	−1.1%/yr	+0.0%/yr

The record, charted

FY2017–2025

Each measure over its full record; the current point and the worst year marked.

Share count

360Mpeak FY2018

ROIC

−8%low FY2025

Gross margin

74%low FY2023

Net debt ÷ owner earnings

6.6×peak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$670Mowner earningsvs.($1.1B)net incomelow FY2025

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2017FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $1.1B loss into $670M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($1.1B)	$390M	$1.0B	$2.4B	$2.9B
Depreciation & amortizationnon-cash charge added back	+$829M	+$825M	+$744M	+$727M	+$651M
Stock-based compensationreal costnon-cash, but a real cost	+$304M	+$325M	+$267M	+$331M	+$327M
Working capital & othertiming of cash in and out, other non-cash items	+$1.3B	+$820M	−$286M	−$408M	−$217M
Cash from operations	$1.3B	$2.4B	$1.7B	$3.0B	$3.6B
Maintenance capital expenditurethe spending needed just to hold position and volume	−$602M	−$919M	−$744M	−$727M	−$637M
Owner earnings	$670M	$1.4B	$987M	$2.3B	$3.0B
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	—	—	−$259M	−$313M	—
Free cash flow	$670M	$1.4B	$728M	$2.0B	$3.0B
Owner-earnings marginowner earnings ÷ revenue	5%	9%	6%	13%	18%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $304M), owner earnings is nearer $366M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -2.2×

Does not cover its interest

Operating income ($785M) ÷ interest expense $357M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $3.9B

Net debt against an operating loss

Cash $2.9B + ST investments $534M − debt $7.3B

What this means
Netting $3.5B of cash and short-term investments against $7.3B of debt leaves $3.9B owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 95d

Long (60+ days)

DSO 39 + DIO 203 − DPO 147 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 19%

High through the cycle

9-yr median, range -8%–37%; -8% latest = NOPAT ($620M) ÷ invested capital $8.3B

Industry peers: median 10%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran -8% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 12%

Solid through the cycle

9-yr median margin, range 5%–18%; latest $670M = operating cash $1.3B − maintenance capex $602M

Industry peers: median 12%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 5% of revenue this year, a 12% median across 9 years. Treating stock comp as the real expense it is (less $304M of SBC) leaves $366M.
Are earnings backed by cash? $1.3B

Loss, but cash-generative

Net income ($1.1B) · cash from operations $1.3B

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 97%

Returns most of it

Dividends + buybacks $653M ÷ Owner Earnings $670M

What this means
Of $670M Owner Earnings, $653M (97%) went back to shareholders, $618M dividends, $35M buybacks. But the buybacks barely exceed stock issued to employees ($304M SBC), net of dilution, little was truly returned. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.73×

Harvesting

Capex $602M ÷ depreciation $829M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $14.3B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.30×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $7.3B vs $1.6B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Near

A profit every year (9-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (9)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −94%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.24/share (latest year $-3.13), the averaged base the calculator's gate runs on, and book value is $10.68/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 8 of 9

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 5 of 9 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 15% → 3% (3-yr avg ends)

In the filing’s words The filing attributes gains to higher prices, but the margin in the record has not followed — the claim outruns the result here.

What this means
Through the cycle the operating margin slipped — about 15% early to 3% lately, median 14% — competition or costs are biting in.
Reinvestment, incremental ROIC −33%

What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
Owner earnings growth −5%/yr

What this means
Owner earnings shrank about 5% a year over the record.
Worst year 2025 · −5.5% op. margin

What this means
Operations went underwater in 2025, understand why before trusting the good years.
Share count −0.4%/yr

What this means
Roughly flat share count, little dilution, little buyback.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Our competitors or other third parties may incorporate AI into their business, services, and products more rapidly or more successfully than us, which could hinder our ability to compete effectively and adversely affect our business.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$7.5B

Cash & short-term investments$3.7B
Receivables$1.7B
Inventory$1.9B
Other current assets$182M

Current liabilities$5.9B

Debt due within a year$3M
Accounts payable$1.3B
Other current liabilities$4.6B

Current ratio1.27×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.94×stricter: inventory excluded

Cash ratio0.62×strictest: cash alone against what's due

Working capital$1.6Bthe cushion left after near-term bills

Debt due this year vs. cash$3M due · $3.7B cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+4.6%the freshest read on whether the business is still growing

Current ratio, recent quarters1.4× → 1.3×

Deeper floors

Tangible book value($1.8B)equity stripped of goodwill & intangibles

Net current asset value($1.2B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$3.1B$2.0B of it operating leases; with finance leases, “total fixed claims” below reaches $9.5B (annual-report basis)

Deferred revenue$294Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$464M

'27$403M

'28$309M

'29$232M

'30$186M

later$856M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$464Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$2.5Bevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$2.2Bthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$7.3B

Lease obligations (present value)$2.2B

Total fixed claims on the business$9.5B

Counting the leases the way Buffett does, the fixed claims on this business come to $9.5B, of which the leases are 23%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Jun 30, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2017–2025

Over the record, the business generated $21.2B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$6.7B · 32%
Dividends$6.2B · 29%
Buybacks$7.0B · 33%
Retained (debt / cash)$1.3B · 6%

Returned to owners$13.2B
87% of the owner earnings the business produced over the span, $6.2B as dividends and $7.0B as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $3.7B and cash and short-term investments rose $1.9B.
Average price paid for buybacks—
Buybacks ran $7.0B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−2.3%
The diluted count fell from 373M to 365M, so the buybacks outran the stock issued to staff.
Dividend record$1.72/sh
Paid in 9 of the years on record, the per-share dividend growing about 4% a year. It was cut at least once along the way.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 9-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$5.9B30% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity55%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$3.8Bover 9 years buying other businesses, against $6.7B of capital spent building

$1.3B written down across 6 years (2017, 2019, 2020, 2021, 2024, 2025): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 33% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 9-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Owner earnings
2021	$66.0M	$198.8M	$3.0B
2022	$25.5M	−$14.8M	$2.3B
2023	$21.8M	−$29.1M	$987M
2024	$17.9M	−$28.7M	$1.4B
2025	$9.6M	$6.9M	$670M
2025	$17.8M	$6.6M	$670M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership0.8%
The stake all directors and executive officers hold together, per the 2025 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$304M
The slice of the business handed to employees in shares this year, 2% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Estee Lauder Companies Inc. (The) is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2025.

3 of the 6 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?6.7% vs 12.7%
The owner-earnings margin averaged 12.7% early in the record and 6.7% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid debt outgrow the business?$3.6B → $7.3B
Debt rose from $3.6B to $7.3B while owner earnings went from about $1.7B to $1.0B — about 2.1 years of owner earnings in debt then, about 7.1 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereAre "one-time" charges a yearly habit?6 of 9 years
Management took an impairment or write-down in 6 of the last 9 years, $1.6B in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Did the share count rise anyway?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Income taxes as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Personal Care Products

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
CLColgate-Palmolive Co.	$20.4B	60%	21.9%	41%	17%
ECLEcolab Inc.	$16.1B	42%	14.1%	10%	12%
KVUEKenvue Inc.	$15.1B	57%	16.1%	9%	10%
REGNRegeneron Pharmaceuticals Inc.	$14.3B	—	34.6%	21%	31%
ELEstee Lauder Companies Inc. (The)	$14.3B	76%	14.4%	19%	12%
VTRSViatris	$14.3B	34%	2.5%	0%	14%
CLXClorox Co.	$7.1B	44%	17.1%	32%	12%
COTYCoty Inc.	$5.9B	60%	-1.0%	-1%	4%
Group median	—	57%	15.3%	15%	12%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Estee Lauder Companies Inc. (The) has delivered.

Today’s price $

Through the cycle, Estee Lauder Companies Inc. (The) earns about $1.7B on its 11.6% median owner-earnings margin. This year’s 4.7% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($1.7B) Net of stock comp (−$303M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−21%/yr

Owner-earnings growth · ’17→’25−5%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $1.3B on 362M shares outstanding (a weighted basic average, the only count this filer tags); net debt $3.7B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh EL against another business →

The owners of EL: the meeting and the votes →

Cite: Owner Scorecard, "Estee Lauder Companies Inc. (The) (EL), the owner's record," https://ownerscorecard.com/c/EL, data as of 2026-07-09.

Manual order: ← EIX its page in the Manual ELA →

Industry order: ← COTY the Personal Care Products chapter ELF →