The Estee Lauder (0JTM.L) Q3 2024 Earnings Report

Estee Lauder Companies reported a resilient Q3 2024 with revenue of $3.94 billion, up 5.0% year over year and a gross margin of 71.9%, marking continued pricing power and favorable product mix within a premium beauty portfolio. Despite a sequential QoQ revenue decline of 7.92% and a modest reduction in operating momentum on a quarterly basis, the company delivered solid profitability with operating income of $531 million (operating margin of 13.5%) and net income of $330 million (net margin 8.38%), supported by meaningful operating leverage and cost discipline. Cash generation remained robust, evidenced by $534 million in operating cash flow and $359 million in free cash flow for the quarter. The balance sheet shows substantial liquidity with $3.70 billion in cash and cash equivalents and total debt of $9.84 billion, resulting in a net debt position of approximately $6.14 billion. The company continued to fund capital returns and deleveraging initiatives, with $236 million in dividends paid and a modest debt repayment of $352 million during the period. Valuation remains elevated relative to many consumer staples peers (P/E around 41x and P/S around 13.9x in the provided ratios). The portfolio strategy, brand equity, and higher-margin segments underpin long-term earnings resilience, but market anticipations around growth tempo, geographic mix, and currency effects warrant a measured stance. Investors should monitor topline trajectory in skincare and prestige makeup, expense discipline, working capital dynamics, and any shifts in consumer spend in higher-value channels as macro conditions evolve.