Forensic Analysis · Consumer Staples / Food & Beverage · as of Jun 27, 2026

ESTEE LAUDER COMPANIES INC (EL)

A forensic read on ESTEE LAUDER COMPANIES INC built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.

C · Mixed — selective

Forensic grade

Grey Zone

Financial health

2.4

Altman Z-score

Clean

Earnings quality

Forensic signals

-6.3%

ROE

$29.1B

Market cap

1.66%

Dividend yield

ESTEE LAUDER COMPANIES INC earns a C (Mixed — selective) forensic quality grade, and its Altman Z-score is 2.4, placing it in the Grey zone. 6 forensic signals were flagged in its latest SEC filings, led by return on invested capital.

What the filings flag

-4%Return on invested capital. Return on invested capital is -4% and slipping from 16% — well below its ~8% cost of capital, so reinvested dollars may be destroying value, not building it.

2% of revStock-based comp load. Stock-based compensation ran 2% of revenue and 45% of free cash flow in FY2025 — about $0.84 per diluted share. Heavy — a large slice of 'free cash flow' is really being paid out in stock, so the true owner cash per share is well below the headline.

$1.2BGoodwill impairments. Took $1.2B of goodwill writedowns across 5 year(s) (FY2021 ($54M), FY2024 ($291M), FY2025 ($13M)) — about 15% of net income over the span. A large writedown means an acquisition turned out worth far less than was paid — a real mark against M&A discipline.

203dInventory days. Days inventory outstanding moved from 179 to 203 FY2024→FY2025 (against cost of goods sold; inventory -5% vs -16% in cost of sales). Inventory is building a little faster than sales — watch for markdowns.

-0.4%/yrShare-count dilution. Diluted share count changed -1% over the last 3 years to FY2025 (-0.4%/yr). Roughly flat — buybacks are about offsetting stock comp, not shrinking the count. Per-share value isn't being meaningfully helped or hurt by the count.

97% of FCFShareholder returns. Returned $653M to shareholders (buybacks + dividends) in FY2025 — 97% of free cash flow. Right at the limit of what free cash flow covers — little room before it's funded by debt or the balance sheet.

Key fundamentals

Net Margin-7.9%

Debt / Equity1.89x

Free Cash Flow$670.0M

Latest Revenue$14.33B

Return on Equity-29.3%

Revenue Growth YoY-8.2%

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Data from SEC EDGAR public filings · metrics as of Jun 27, 2026. Forensic signals flag probability, not certainty.