What changed in this filing

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Item 1. Business

2024-08-19 compared with 2023-08-18 · 92 added, 112 removed, 245 unchanged (45% of the section changed)

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Estée Lauder, Clinique, Origins, M·A·C, Bobbi Brown Cosmetics, La Mer, Aveda, Jo Malone London, TOM FORD, Too Faced, Dr.Jart+, and The Ordinary.

We are also the global licensee of the AERIN and BALMAIN brand names for fragrances and cosmetics.

We are also the global licensee of the AERIN, BALMAIN and Dr.

Andrew Weil brand names for fragrances and cosmetics.

Each brand is distinctly positioned within the market for cosmetics and other beauty products.

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Our products are sold on our own and authorized retailer websites, on third-party online malls, in stores in airports, in duty-free locations and in our own and authorized freestanding stores.

In addition, our products are sold in brick-and-mortar retail stores, including department stores, specialty-multi retailers, upscale perfumeries and pharmacies and prestige salons and spas.

We believe that our strategy of pursuing selective distribution heightens the aspirational quality of our brands.

In addition, our products are sold in brick-and-mortar retail stores, including department stores, specialty-multi retailers, upscale perfumeries and pharmacies and top-tier salons and spas.

We have been controlled by the Lauder family since the founding of our Company.

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These products include moisturizers, serums, cleansers, toners, body care, exfoliators, acne and oil correctors, facial masks and sun care products.

Makeup - Our full array of makeup products includes lipsticks, lip glosses, mascaras, foundations, eyeshadows, nail polishes and powders.

Makeup - Our full array of makeup products includes lipsticks, lip glosses, mascaras, foundations, eyeshadows and powders.

Many of the products are offered in an extensive palette of shades and colors.

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Beauty brands are differentiated by numerous factors, including quality, performance, a particular lifestyle, where they are distributed (e.g., prestige or mass) and price point.

Below is a chart showing the brands that we sell and how we view them based on lifestyle and price point:

Below is a chart showing the brands we sell and how we view them based on lifestyle and price point:

Estée Lauder brand products, which have been sold since 1946, have a reputation for innovation, sophistication and superior quality.

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The brand’s popularity has grown through a tradition of word-of-mouth endorsement from professional makeup artists, models, photographers and journalists around the world.

Acquired in 1995, Bobbi Brown is a global prestige beauty brand known for its high quality and undertone-correct makeup and skin care products that celebrate individual beauty and confidence.

Acquired in 1995, Bobbi Brown Cosmetics is a global prestige beauty brand known for its high quality and undertone-correct makeup and skin care products that celebrate individual beauty and confidence.

Reflecting its artistry roots, the brand is focused on creating a teaching and learning community of women around the world.

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Acquired in 1999, Jo Malone London is a scented British lifestyle brand with understated elegance, offering enchanted story-telling and “High-Touch” boutique services.

The brand’s famous colognes are perfect alone or artfully layered with Fragrance Combining.

The brand’s famous colognes are perfect alone or artfully layered.

Jo Malone London embodies the spirit of gifting generosity and inspires emotional elevation.

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Consistent with the fashion brand, our products exude seductive modern-day glamour and include luxury fragrance, color cosmetics, men’s grooming products and skin care products for discerning consumers globally.

Acquired in 2010, Smashbox Cosmetics is a Los Angeles-based, photo studio-inspired makeup brand with high performance products created for our consumer’s everyday life in the spotlight.

Acquired in 2010, Smashbox Cosmetics is a Los Angeles-based, photo studio-inspired makeup brand with high performance products created for our consumers' everyday life in the spotlight.

Launched in 2012, AERIN is a luxury lifestyle beauty and fragrance brand inspired by the signature style of its founder, Aerin Lauder.

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Acquired in 2019, Dr.Jart+ is a Seoul-based, global skin care brand known for its innovative formulations and unique combination of dermatological science and art.

Its high-quality masks, moisturizers and serums are distributed primarily through travel retail, specialty-multi and online channels.

In 2021, we increased our investment in Deciem Beauty Group Inc.

(“DECIEM”) to approximately 76%.

On May 31, 2024, we purchased the remaining interest in the Deciem Beauty Group Inc.

("DECIEM") after increasing our investment in 2021 to 76%.

Known as “The Abnormal Beauty Company,” DECIEM is a Toronto-based, vertically integrated multi-brand beauty company rooted in a consumer-focused and functional approach.

Its portfolio includes The Ordinary, an ingredient-focused brand, and NIOD, a science-driven skin care brand.

In fiscal 2021, we made the decision to exit the global distribution of BECCA products, a makeup brand we acquired in 2016 and substantially completed this exit during fiscal 2022.

In fiscal 2022, we negotiated early termination agreements for our previous license agreements for the Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna product lines effective June 30, 2022 and continued to sell products under these licenses through such time.

From time to time, we also make strategic minority investments in other companies, mainly in the beauty industry.

In some cases, we have acquired the remaining interest or a majority interest (e.g., Have & Be Co.

Dr.Jart+) and Deciem Beauty Group Inc., respectively).

Our current minority investments include a company based in India that manufactures, markets and sells Ayurvedic skin care and other products under the Forest Essentials brand name, primarily in India.

From time to time, we also make minority investments in companies, mainly in the beauty industry, including through our New Incubation Ventures, the strategic early-stage investment and incubation arm of our Company.

In some cases, we have acquired the remaining interests (e.g., Have & Be Co.

Dr.Jart+) and DECIEM).

We have several minority investments including a company based in India that manufactures, markets and sells Ayurvedic skin care and other products under the Forest Essentials brand name, primarily in India.

Our “Luxury Brands” are La Mer, Jo Malone London, TOM FORD, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle and Kilian Paris.

Our luxury portfolio also includes Estée Lauder's Re-Nutriv product franchise.

Our “Large Brands” are Estée Lauder, La Mer, M·A·C and Clinique.

Our “scaling brands” are Jo Malone London, TOM FORD, Aveda, Bobbi Brown Cosmetics and The Ordinary.

Our “developing brands” are Le Labo, Too Faced, Dr.Jart+, Origins, Kilian Paris, Bumble and bumble, Smashbox, Darphin Paris, Lab Series, Editions de Parfums Frédéric Malle and GLAMGLOW.

Our “Scaling Brands” are Jo Malone London, TOM FORD, The Ordinary, Aveda, and Bobbi Brown Cosmetics.

Our “Developing Brands” are Le Labo, Too Faced, Dr.Jart+, Origins, Kilian Paris, Bumble and bumble, Smashbox, Darphin Paris, Editions de Parfums Frédéric Malle, Lab Series, and GLAMGLOW.

Social Impact and Sustainability

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Certain goals are also intended to help us reduce cost and waste.

Our Nominating and ESG Committee, one of our Board committees, has oversight responsibility for our Company’s environmental, social and governance (“ESG”) activities and practices, including citizenship and sustainability matters.

The Nominating and ESG Committee of our Board of Directors has oversight responsibility for our Company’s environmental, social and governance (“ESG”) activities and practices, including citizenship and sustainability matters.

Our social impact and sustainability efforts are led by our Executive Chairman and our President and Chief Executive Officer.

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Our products are sold on our own and authorized retailer websites, on third-party online malls, in stores in airports, in duty-free locations and in our own and authorized freestanding stores.

In addition, our products are sold in brick-and-mortar retail stores, including department stores, specialty-multi retailers, upscale perfumeries and pharmacies and prestige salons and spas.

In addition, our products are sold in brick-and-mortar retail stores, including department stores, specialty-multi retailers, upscale perfumeries and pharmacies and top-tier salons and spas.

Our general practice is to accept returns of our products from customers if properly requested and approved.

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As of June 30, 2024, we operated approximately 1,600 freestanding stores.

The total reflects the net impact during fiscal 2023 of store closures related to the Post-COVID Business Acceleration Program and closures due to natural lease expirations, offset by new door openings.

Most freestanding stores are operated by us under a single brand name, such as M·A·C, Jo Malone London and Aveda.

We also operate over 250 multi-branded company stores in outlet malls.

The total reflects the net impact during fiscal 2024 of lease expirations, offset by new door openings.

Most freestanding stores are operated by us under a single brand name, such as M·A·C, Jo Malone London, Le Labo and Aveda.

We also operate over 300 multi-branded company stores, primarily in outlet malls.

We maintain dedicated sales teams that manage our retail accounts.

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and in The Americas are Brazil, Mexico, Chile, Colombia, Panama, Peru and Argentina.

Our “Priority Emerging Markets” in Europe, the Middle East & Africa are India, the Middle East, Turkey and South Africa;

in Asia/Pacific are Thailand, Malaysia, Vietnam, Indonesia, and the Philippines;

and in The Americas are Brazil and Mexico.

Our strategy is to build strong relationships globally with select retailers, and our senior management works with executives of our major retail accounts on a regular basis in support of these relationships.

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In addition to continuing to attract existing consumers, our hero products provide an opportunity for new consumers to be introduced to our desirable products, creating consumer traffic across all channels of distribution.

We aim to further strengthen our hero products through continuous review of our product portfolio and strategic innovation.

We aim to further strengthen our hero products, and create new ones, through continuous review of our product portfolio and strategic innovation.

Our marketing planning approach leverages local insights to optimize allocation of resources across different media outlets and retail touch points to resonate with our most discerning consumers most effectively.

This includes strategically deploying our brands and tailoring product assortments and communications to fit local tastes and preferences in cities and neighborhoods.

This includes strategically deploying our brands and tailoring product assortments and communications to fit local tastes and preferences in cities and neighborhoods, and also using these insights to develop new ways to innovate, engage consumers, build brand equity and sell products.

Most of our creative marketing work is done by in-house teams, in collaboration with external resources, that design and produce the sales materials, social media strategies, advertisements and packaging for products in each brand.

For a number of products, we create and deploy 360° integrated consumer engagement programs.

We build brand equity and drive traffic to retail locations and to our own and authorized retailers’ websites through digital and social media, magazines and newspapers, television, billboards in cities and airports, and direct mail and email.

We build brand equity and drive traffic to retail locations and to our own and authorized retailers’ websites including through digital and social media, billboards in cities and airports, and email.

In addition, we seek editorial coverage for our brands and products in digital and social media and print, to drive influencer amplification.

We are increasing our brand awareness and sales through our strategic emphasis on technology, by continuing to elevate our digital presence encompassing e-commerce and m-commerce, as well as digital, social media and influencer marketing.

We are investing in new analytical capabilities to promote a more personalized experience across our distribution channels.

We continue to innovate to better meet consumer online shopping preferences (e.g., how-to videos, ratings and reviews and mobile phone and tablet applications), support e-commerce and m-commerce businesses via digital and social marketing activities designed to build brand equity and “High-Touch” consumer engagement, in order to continue to offer better experiences and services and set the standard for prestige beauty shopping online.

We continue to focus on increasing our brand awareness and sales through our strategic emphasis on technology, by expanding our digital presence encompassing e-commerce, as well as digital, social media and influencer marketing.

Our ongoing investments in new analytical capabilities enable us to create more personalized experiences across our distribution channels.

We continue to innovate to better meet consumer online shopping preferences (e.g., how-to videos, ratings and reviews and mobile phone and tablet applications), support e-commerce businesses via digital and social marketing activities designed to build brand equity and “High-Touch” consumer engagement, in order to continue to offer better experiences and services and set the standard for prestige beauty shopping online.

We also support our authorized retailers to strengthen their e-commerce businesses and drive sales of our brands on their websites.

We have opportunities to expand our brand portfolio online around the world, and we continue to invest in new omnichannel concepts in the United States, China and other markets to increase brand loyalty by better serving consumers as they shop across channels and travel corridors.

We have opportunities to expand our brand portfolio online around the world, and we continue to invest in omnichannel concepts in the United States, China and other markets to increase brand loyalty by better serving consumers as they shop across channels and travel corridors.

We have dedicated resources to implement creative, coordinated, brand-enhancing strategies across all online activities to increase our direct access to consumers.

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The modernization and simplification of our technology ecosystem remains a key focus, as we increasingly leverage the benefits of the cloud.

We recognize that technology presents opportunities for competitive advantage, and we continue to invest in new capabilities and the use of emerging technologies across various aspects of our business.

In fiscal 2023, we made investments in research and pilots of technologies that serve and attract new consumers.

As the working environment for our team members evolve, including hybrid ways of working for our employees, we continue to invest in hardware, software, education and support structures that drive productive, collaborative facilities and meeting spaces, both virtually and in person.

We recognize technology presents opportunities for competitive advantage, and we continue to invest in new capabilities and the use of emerging technologies, including investments in artificial intelligence ("AI"), across various aspects of our business.

This includes the strategic utilization of data to provide better visibility into consumer trends, to increase responsiveness in our product development.

Research and Development

We believe that we are an industry leader in the development of new products.

We believe we are an industry leader in the development of new products.

Our research and development group, which includes scientists, engineers, analysts, and other employees involved in product and packaging innovation, works closely with our marketing and product development teams and third-party suppliers to generate ideas, develop new products and product-line extensions, create new packaging concepts, and improve, redesign or reformulate existing products.

In addition, these research and development personnel provide ongoing technical assistance and know-how to quality assurance and manufacturing personnel on a worldwide basis, to ensure consistent global standards for our products and to deliver environmentally responsible products that meet or exceed consumer expectations.

The research and development group has both long-standing and continually growing research-based working relationships with several U.S.

The research and development group has research-based working relationships with several U.S.

and international dermatology and medical institutions, research universities and educational facilities, which supplement internal capabilities.

Members of the research and development group are also responsible for product safety, registration and regulatory compliance matters.

As our business continues to grow globally, and to satisfy the demand for locally relevant consumer products, we have increased our focus on innovation in Asia/Pacific, especially in China, as well as in Japan and Korea.

In fiscal 2023, we completed construction of a newly leased site for our new Research and Development facility in China, to better meet the needs of the Chinese consumer through local relevancy with superior capabilities in product and package design and consumer and clinical testing.

Our research and development costs totaled $360 million, $344 million and $307 million in fiscal 2024, 2023 and 2022, respectively, and are expensed as incurred.

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Manufacturing, Warehousing and Raw Materials

We manufacture our products primarily in our own facilities in the United States, Belgium, Switzerland, the United Kingdom and Canada and also leverage global third-party manufacturing networks.

We manufacture our products primarily in our own facilities in The Americas (United States and Canada);

in Europe, the Middle East & Africa (Belgium, Switzerland and the United Kingdom);

and in Asia/Pacific (Japan), and we also leverage global third-party manufacturing networks.

We continue to evaluate our manufacturing facilities and processes and identify sourcing opportunities to improve innovation, increase efficiencies, minimize our impact on the environment, ensure supply sufficiency and reduce costs.

Our plants are modern, and our manufacturing processes are substantially automated.

In fiscal 2023, we began limited production in our new owned manufacturing facility near Tokyo as we continued construction, which is expected to enable us to better meet demand, further drive our sustainability efforts, optimize costs and increase speed to market in the Asia/Pacific region, including our travel retail business within the region.

We expect the remainder of the site to be completed and operational in early fiscal 2024, with production levels scaling over the next few years.

While we believe that our manufacturing network of internal and external sites is sufficient to meet current and reasonably anticipated increased requirements, we continue to implement improvements in capacity, technology, and productivity and align our manufacturing with regional sales demand to be more agile.

From time to time, demand changes may challenge our capacity for certain subcategories on a short-term basis, but we believe that these changes will not impact our ability to meet our long-term strategic objectives.

We have established a flexible global distribution network that is managed by us or third parties.

The network is designed to meet the changing demands of our customers while maintaining service levels.

We are continuously evaluating and adjusting this physical distribution network, particularly as we work to anticipate and respond to channel shifts.

In fiscal 2024, we completed the construction of our new manufacturing facility in Japan, near Tokyo.

While we believe our manufacturing network of internal and external sites is sufficient to meet current and reasonably anticipated increased requirements, we continue to implement improvements in capacity, technology, and productivity and align our manufacturing with regional sales demand to be more agile.

From time to time, demand changes may challenge our capacity for certain subcategories on a short-term basis, but we believe these changes will not impact our ability to meet our long-term strategic objectives.

We have established a flexible global distribution network that is designed to meet the changing demands of our customers while maintaining service levels.

We are continuously evaluating and adjusting this physical distribution network, particularly as we work to anticipate and respond to shifts in channel and consumer preferences, as well as identifying opportunities to increase efficiencies and reduce costs.

We have established regional and local distribution centers, including those maintained by third parties, strategically positioned throughout the world in order to facilitate efficient delivery of our products to our customers and consumers.

In fiscal 2022, we opened a new, state-of-the-art distribution center in Switzerland to support the growth of our travel retail business and further drive our sustainability efforts.

During fiscal 2023, we continued to support the growth of our business in China with the opening of an additional distribution center in Guangzhou.

As discussed above, we continue to focus on social impact and sustainability across our operations.

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We also engage in initiatives to improve our equipment and buildings to support and deliver our sustainability goals and reduce our impact on the environment.

Environmental efforts include waste reduction, zero industrial waste to landfill, investments in renewable energy sources and packaging that incorporates recyclable and recycled content.

Environmental efforts include waste reduction, reducing industrial waste to landfill, investments in renewable energy sources and packaging that incorporates recyclable and recycled content.

The principal raw materials used in the manufacture of our products are essential oils, alcohols and specialty chemicals.

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Procurement of materials for all manufacturing facilities is generally made on a global basis through our Global Supplier Relations function.

We also partner with an extensive and reliable network of third-party manufacturers that help us access innovation and capacity.

We also partner with an extensive network of third-party manufacturers that help us access innovation and capacity.

We review our supplier base periodically with the specific objectives of improving quality, increasing innovation and speed-to-market, ensuring supply sufficiency and reducing costs.

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In the past, we have been able to obtain an adequate supply of essential raw materials and packaging components for virtually all materials used in the production of our products.

From time to time, we may experience supply disruptions on a short-term basis, but we currently believe we have adequate resources of supply and that our portfolio of suppliers has the resources and facilities to overcome most unforeseen interruptions of supply.

From time to time, we may experience supply disruptions on a short-term basis, but we currently believe we have adequate resources of supply and our portfolio of suppliers has the resources and facilities to overcome most unforeseen interruptions of supply.

We are continually benchmarking the performance of our supply chain, and we augment our supply base and adjust our distribution networks and manufacturing plants and networks based upon the changing needs of the business.

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Procter & Gamble;

Shiseido Company, Ltd.;

LVMH Moët Hennessey Louis Vuitton;

Natura & Co.;

and Bath & Body Works, Inc.

Shiseido Company, Ltd.;

and Coty Inc.

We also face competition from a number of independent brands, some of which are backed by private-equity investors, as well as some retailers that have their own beauty brands.

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Trademarks, Patents and Copyrights

We own the trademark rights used in connection with the manufacturing, marketing, distribution and sale of our products both in the United States and in the other principal countries where such products are sold, including Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, Bobbi Brown, La Mer, Aveda, Jo Malone London, Bumble and bumble, Darphin, TOM FORD, Smashbox, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, Kilian Paris, Too Faced, Dr.Jart+, and The Ordinary.

We are the exclusive worldwide licensee for fragrances, cosmetics and/or related products for AERIN, BALMAIN, and Dr.

For further discussion on license arrangements, including their duration, see Item 8.

Financial Statements and Supplementary Data – Note 2 – Summary of Significant Accounting Policies – License Arrangements .

Financial Statements and Supplementary Data – Note 2 – Summary of Significant Accounting Policies – Royalty Fees - License Arrangements .

We protect our trademarks in the United States and significant markets worldwide.

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We view human capital management and the strength of our employees as integral to the long-term success and resilience of our business.

Our human capital management includes the following strategic areas, each of which is discussed further below:

• Inclusion, Diversity and Equity - Fostering an inclusive, diverse and equitable culture that provides our employees with personal and professional development opportunities, which helps to attract and retain the best talent and drive long-term growth.

• Talent Recruitment, Retention, Learning and Development - Affording our employees learning opportunities to drive career development and enhance innovation, which helps to create strong and sustainable leadership across the organization and support ongoing development of new products and services.

• Health and Safety - Striving to provide a healthy and safe workplace for our employees, which we believe also enhances productivity.

• Employee Rewards - Offering competitive compensation and benefit packages to support our employees’ physical, mental and financial well-being, which helps us attract, incentivize and retain world-class talent.

• Volunteerism and Community Engagement - Supporting volunteer efforts by our employees because our long-term success is closely tied to the vitality of the communities where we have a presence.

Our Board of Directors and its committees provide oversight to management on a range of human capital matters, including inclusion and diversity, health and safety, pay equity and compensation and benefits.

We had approximately 62,000 and 63,000 employees worldwide, including demonstrators at points of sale who are employed by us, as of June 30, 2023 and 2022, respectively.

As of June 30, 2024 and 2023, we had approximately 62,000 employees worldwide, including demonstrators at points of sale who are employed by us.

At June 30, 2024, approximately 71% of our global employees were full-time, approximately 16% were temporary and approximately 13% were part-time employees, with approximately 27% of our global employees located in the United States and approximately 73% located outside of the United States.

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A limited number of employees outside of the United States are covered by works council agreements or other syndicate arrangements.

Our human capital management includes the following strategic areas:

Inclusion, Diversity and Equity

We are committed to supporting an inclusive and diverse workplace that better enables us to create innovative products and services as we continually strive to meet the evolving needs of our diverse global consumers.

We continue to evolve our inclusion, diversity and equity strategy as we remain committed to supporting an inclusive and diverse workplace for all of our employees that better enables us to create innovative products and services as we continually strive to meet the evolving needs of our diverse global consumers.

Our objective in creating an environment of inclusion, diversity and equity is to enhance our ability to attract and retain the best talent globally and promote a sense of belonging.

We continuously encourage a culture of fairness, equal access to opportunities, including positions of leadership, and transparency in employment matters.

We have enhanced our strategy in many areas including hiring, employee engagement, development and talent management to further support inclusion, diversity and equity across the organization.

We are proud of our history of driving awareness and acceptance around the world and for standing up for the rights of individuals in the workplace and beyond.

We remained resolute in our commitment to prioritize racial equity, diligently advancing our previously announced series of commitments across the business, with a focus on U.S.

Areas where we have made commitments include programs related to listening and learning, talent and opportunity, representation, suppliers and investing in change.

We are also committed to gender equity and equitable pay practices.

We have a number of programs to help accelerate the development and promotion of women, such as our Women's Leadership Network, and remain committed to the achievement of gender pay equity across the organization.

We continue to prioritize cross-generational inclusion and diversity to help cultivate talent within our workforce.

We are committed to various programs to continue our investment at all levels of seniority and tenure, including our Global Reverse Mentor Program that pairs seasoned leaders with more junior talent and was designed to give insights to the leadership team on current millennial and Gen Z habits, preferences and trends.

We remain resolute in our commitments to racial equity, with a focus on U.S.

operations, including programs related to listening and learning, talent and opportunity, representation, suppliers and investing in change.

We are also committed to gender equity and equitable pay practices, having made significant progress in this respect, and also continue to prioritize cross-generational inclusion and diversity to help cultivate talent within our workforce.

Talent Recruitment, Retention, Learning and Development

Hiring, retaining and developing the best talent globally is key to our success in sustaining long-term growth.

Our talent strategy is focused on employee engagement and investments in career development, as well as measuring, recognizing and rewarding business and leadership performance.

Hiring, retaining and developing the best talent globally is key to our success.

Our talent strategy is focused on employee engagement and investments in career development, succession planning and building leadership at various levels across the organization, as well as measuring, recognizing and rewarding business and leadership performance.

Our investments include providing programs to ensure our employees are equipped with the right skillsets and knowledge, as well as opportunities to transfer to other functions or regions through short-term and long-term assignments.

We believe these programs and opportunities create a pipeline of talent and leadership, necessary to drive and deliver on our long-term strategy.

To enhance our culture and measure our human capital objectives, we regularly engage with our employees.

We provide several mechanisms for our employees to provide their feedback, including direct discussions with managers, employee surveys and interactive townhall meetings.

Key topics covered during employee engagement include inclusion, diversity and equity, learning and development, work-life structure, leadership effectiveness, and employee benefits.

We believe these programs and opportunities create a pipeline of talent and leadership, necessary to drive and deliver on our long-term strategy in an ever-changing business environment.

To enhance our culture and measure our human capital efforts, we regularly engage with our employees and provide several mechanisms for our employees to provide their feedback.

Key topics covered during employee engagement include inclusion, diversity and equity, learning and development, work-life structure, leadership effectiveness, and employee benefits and well-being.

Based on our review of employee survey results, action plans are implemented to enhance employee satisfaction and to ensure alignment with our overall human capital strategy.

In fiscal 2022, we responded to employee need for more access to career opportunities by launching our first Talent Marketplace, ELC Grow, which enables employees to explore personalized roles, projects, and networking opportunities that can empower employees to grow their skills and career.

We are expanding access to this marketplace to all employees globally in fiscal 2024.

An important element of our talent strategy is succession planning and building leadership at various levels across the organization.

We regularly discuss potential successors to key roles, review relevant backgrounds and capabilities and develop succession plans accordingly.

One example is our Talent Marketplace, (called ELC Grow), which enables employees to explore personalized roles, projects, and networking opportunities that can empower employees to grow their skills and career.

To enhance innovation, productivity and our speed to market, we aim to foster an environment of curiosity and to create a workplace that encourages continuous learning and development.

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Our programs are offered through in-person, online or virtual learning experiences.

As our ways of working continue to evolve, we have adjusted and reprioritized our training and development programs and delivery methods to meet the needs of our employees who are working from home.

These changes included delivering learning experiences around subject matters such as managing remotely, mental health awareness and building resilience during uncertain times, as well as pivoting traditional in-person sessions to virtual instructor-led learning.

In addition, we continue to curate digital content to support “business as usual” focus areas, such as performance development, as well as socially relevant information around racial justice and inclusion and diversity.

Health and Safety

We are committed to providing a healthy and safe workplace for our employees.

We establish and update safety policies and procedures, train employees on our safety guidelines and local requirements, and create a culture focused on safety through ongoing communication, awareness and engagement.

As we plan for the future, our focus is on flexibility, work-life harmonization, and ensuring that our employees have what they need to succeed personally and professionally.

We establish and update safety policies and procedures, train employees on our safety guidelines and local requirements, and create a culture focused on well-being and safety through ongoing communication, awareness and engagement.

Employee Rewards

We offer compelling and competitive compensation packages with the objectives to attract, motivate and retain world-class talent, and we are committed to fair and equitable pay across the organization.

Employee compensation is based on specific circumstances, including role and experience, geographic location and performance.

In addition to base pay, we offer annual incentive awards and equity awards for employees at certain job grades.

To support the health and well-being of our employees, we offer competitive benefit packages that may include pension and post-retirement benefit plans, health and wellness benefits, flexible working arrangements, parental (maternal and paternal) leave, adoption assistance and education-related benefits, which may vary by country.

We offer competitive compensation and benefit packages to attract, motivate and retain world-class talent, and we are committed to fair and equitable pay across the organization.

To support the health and well-being of our employees, our competitive benefit packages may include, depending upon position and location, pension and post-retirement benefit plans, health and wellness benefits, flexible working arrangements, parental (maternal and paternal) leave and support programs, adoption assistance and education-related benefits.

Volunteerism and Community Engagement

We are dedicated to being active and respectful citizens, and we engage in philanthropic and employee volunteering efforts to enhance the communities we touch.

We are inspired by the generosity of our employees and encourage them to become involved in their communities by offering programs to support the causes that matter to them.

To empower employees, ELC Good Works, our global charitable and volunteerism program, allows eligible employees to create and participate in volunteer activities, with their cash donations matched by the Company and volunteer hours rewarded through additional cash donations by the Company.

We support volunteer efforts by our employees as our long-term success can benefit from the vitality of the communities where we have a presence.

This is done through our ELC Good Works program, our global charitable and volunteerism program which allows eligible employees to create and participate in volunteer activities, with their cash donations matched by the Company and volunteer hours rewarded through additional cash donations by the Company.

Government Regulation

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Such laws and regulations relate to a wide range of matters including ingredients, manufacturing, labeling, packaging, marketing, advertising, transport and the sale, disposal and safety of our products, as well as environmental matters.

Compliance with these laws and regulations has not had and is not expected to have a material adverse effect on the Company’s capital expenditures, including capital expenditures for environmental control facilities, earnings or competitive position.

We rely on legal and operational compliance programs, as well as in-house and outside counsel, to guide our businesses in complying with applicable laws and regulations.

Our results of operations in total, by geographic region and by product category, are subject to seasonal fluctuations, with net sales in the first half of the fiscal year typically being slightly higher than in the second half of the fiscal year.

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www.elcompanies.com .

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other reports, as well as any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available free of charge via the EDGAR database at www.sec.gov or our website, as soon as reasonably practicable after we file such reports and amendments with, or furnish them to, the Securities and Exchange Commission.

Securities and Exchange Commission.

Corporate Governance Guidelines and Code of Conduct

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Jane Lauder 51 Executive Vice President, Enterprise Marketing and Chief Data Officer and a Director

Lauder 90 Chairman Emeritus and a Director

Lauder 91 Chairman Emeritus

Lauder 80 Chairman of Clinique Laboratories, LLC and a Director

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Michael O’Hare 56 Executive Vice President – Global Human Resources

Deirdre Stanley 58 Executive Vice President and General Counsel

Travis 62 Executive Vice President and Chief Financial Officer

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*As of August 12, 2024.

All of the executive officers named above have been employees of the Company for more than five years, with the exception of Roberto Canevari, Deirdre Stanley and Meridith Webster.

See below for information regarding expected changes.

All of the executive officers named above have been employees of the Company for more than five years, with the exception of Roberto Canevari and Meridith Webster.

Canevari joined the Company in 2021;

previously, from July 2019 to April 2021, he served as Executive Vice President, Supply Chain, Europe, at Unilever PLC, a consumer goods company, and from September 2012 to June 2019, he was Chief Supply Chain Officer at Burberry Group PLC, a global luxury brand.

Stanley joined the Company in 2019;

previously, she served as General Counsel for Thomson Reuters Corporation, a provider of business information services, and its predecessor company, for 17 years.

Webster joined the Company in 2021;

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from 2017 to 2018, Ms.

Webster was Managing Director for Public Affairs at Emerson Collective, an organization focused on a wide range of initiatives including education, immigration, climate, and cancer research and treatment, and from 2011 to 2017, she served at Bloomberg L.P., a provider of business and financial information and news, in a variety of roles, including the Global Head of Public Affairs.

and from 2011 to 2017, she served at Bloomberg L.P., a provider of business and financial information and news, in a variety of roles, including the Global Head of Public Affairs.

As previously reported on August 7, 2024, Rashida La Lande, age 50, is expected to become Executive Vice President and General Counsel effective August 19, 2024.

La Lande joins the Company from The Kraft Heinz Company, a manufacturer and marketer of food and beverage products, where she was for more than five years.

Prior to that, she was a partner at the law firm of Gibson, Dunn & Crutcher.

As previously reported on July 23, 2024, Akhil Shrivastava, age 51, is expected to become Executive Vice President and Chief Financial Officer on November 1, 2024, succeeding Tracey T.

Travis in that role.

Shrivastava has been an employee of the Company for more than five years.

Information about our Board of Directors*

Name Principal Occupation or Employment

Charlene Barshefsky Chair, Parkside Global Advisors, an international consulting company, and former Senior International Partner, WilmerHale, a law firm

Wei Sun Christianson Senior Advisor at Morgan Stanley, a global financial services firm, and former Managing Director and Co-Chief Executive Officer of Asia Pacific and

Chief Executive Officer of China at Morgan Stanley

Lynn Forester de Rothschild CEO of E.L.

Rothschild LLC, a private investment company

Charlene Barshefsky Chair, Parkside Global Advisors, a consulting firm

Angela Wei Dong Global Vice President and General Manager of Greater China, NIKE, Inc., a company that designs and develops, and markets and sells worldwide, athletic footwear, equipment, accessories and services

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Fribourg Chairman and Chief Executive Officer, Continental Grain Company, an international agribusiness and investment company

Jennifer Hyman Co-Founder and Chief Executive Officer, Rent the Runway, Inc., a company that enables women to subscribe, rent items, and shop retail from an unlimited closet of designer brands

Jennifer Hyman Co-Founder, Chief Executive Officer, and Chair, Rent the Runway, Inc., a company that enables women to subscribe, rent items, and shop resale from an unlimited closet of designer brands

Managing Director, Lauder Partners LLC, a venture capital firm

Jane Lauder Executive Vice President, Enterprise Marketing and Chief Data Officer, The Estée Lauder Companies Inc.

Lauder Chairman Emeritus, The Estée Lauder Companies Inc.

Lauder Chairman, Clinique Laboratories, LLC

Lauder Executive Chairman, The Estée Lauder Companies Inc.

Manager of private investments on his own behalf and former Chief Marketing Officer, Nu Holdings Ltd., a digital banking platform

Parsons Chairman of the Equity Alliance, a firm that invests in diverse, emerging venture capital fund managers, and co-founder and partner of Imagination Capital LLC, a venture capital firm

Sternlicht Chairman and Chief Executive Officer, Starwood Capital Group, a privately-held global investment firm

Jennifer Tejada Chief Executive Officer and Chair, PagerDuty, Inc., a digital operations management platform

Founder and Chief Executive Officer of AIE Creative, a branding and marketing firm

Parsons Chairman, Equity Alliance, a firm that invests in diverse, emerging venture capital fund managers, and co-founder and partner, Imagination Capital LLC, a venture capital firm

Lynn Forester de Rothschild Chief Executive Officer and Chair E.L.

Rothschild LLC, a private investment company

Sternlicht Chairman and Chief Executive Officer, Starwood Capital Group, a privately-held global investment firm focused on global real estate

Jennifer Tejada Chief Executive Officer and Chair, PagerDuty, Inc., a digital operations management platform for businesses

Zannino Managing Director, CCMP Capital Advisors, LLC, a private equity firm

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business