Why did Estee Lauder's operating profit plummet in Q4 2024?

The Estee Lauder Companies Inc. (EL) experienced a significant decline in operating profit in Q4 2024, with a decrease of 11.99%. This downturn can be attributed to several key factors:

1. **Impact of Weak Asian Travel Markets and Chinese Consumers**: Estee Lauder's performance has been notably affected by the decline in Asian travel markets and Chinese consumer spending. As a result of these factors, the company's shares have seen an 80% drop since January 2022.
2. **Competition and Shift in Consumer Preferences**: The company's gross margins have fallen from approximately 80% a decade ago to the low 70s due to increased competition and a shift towards more affordable prestige items.

In summary, Estee Lauder's operating profit decline in Q4 2024 is primarily due to weak Asian travel markets and Chinese consumers, combined with competition and a shift in consumer preferences for more affordable prestige items.