What changed in this filing

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Item 1. Financial Statements

2025-10-30 compared with 2025-05-01 · 361 added, 508 removed, 650 unchanged (57% of the section changed)

3 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

September 30,

(In millions, except per share data) 2025 2024

1 unchanged sentence

Cost of sales

889 1,107 2,774 3,331

2,661 2,833 8,141 8,406

Operating expenses

Selling, general and administrative

2,258 2,284 7,141 7,177

Restructuring and other charges

Impairment of goodwill and other intangible assets

Talcum litigation settlement agreements

Total operating expenses

2,355 2,302 8,536 7,203

Operating income (loss)

306 531 ( 395 ) 1,203

Interest expense 86 92

2 unchanged sentences

Earnings (loss) before income taxes

241 486 ( 589 ) 1,051

Provision (benefit) for income taxes

82 151 ( 2 ) 356

Net earnings (loss)

$ 47 $ ( 156 )

Net earnings attributable to redeemable noncontrolling interest — ( 5 ) — ( 21 )

Net earnings (loss) attributable to The Estée Lauder Companies Inc.

$ 159 $ 330 $ ( 587 ) $ 674

Net earnings (loss) attributable to The Estée Lauder Companies Inc.

per common share

Net earnings (loss) per common share

$ .13 $ ( .43 )

1 unchanged sentence

Weighted average common shares outstanding

360.3 359.1 359.9 358.8

361.4 360.8 359.9 360.4

See notes to consolidated financial statements.

2 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

September 30,

(In millions) 2025 2024

1 unchanged sentence

$ 47 $ ( 156 )

Other comprehensive income (loss):

Other comprehensive (loss) income:

Net cash flow hedge gain (loss)

( 24 ) 21 ( 26 ) ( 7 )

Cross-currency swap contract - fair value hedge gain (loss)

7 ( 4 ) 14 10

Cross-currency swap contract - fair value hedge gain

Retirement plan and other retiree benefit adjustments 4 2

Translation adjustments ( 27 ) 108

Benefit (provision) for income taxes on components of other comprehensive income

14 ( 29 ) 5 ( 29 )

Total other comprehensive income (loss), net of tax

68 ( 173 ) ( 133 ) ( 93 )

(Provision) benefit for income taxes on components of other comprehensive (loss) income

Total other comprehensive (loss) income, net of tax

Comprehensive income (loss)

Comprehensive loss (income) attributable to redeemable noncontrolling interest:

Net earnings — ( 5 ) — ( 21 )

Translation adjustments — 15 — 13

Total comprehensive loss (income) attributable to redeemable noncontrolling interest — 10 — ( 8 )

Comprehensive income (loss) attributable to The Estée Lauder Companies Inc.

$ 33 $ ( 73 )

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data) March 31, 2025 June 30, 2024

(In millions, except share and per share data) September 30, 2025 June 30, 2025

Current assets

26 unchanged sentences

Class A shares authorized:

1,300,000,000 at March 31, 2025 and June 30, 2024;

1,300,000,000 at September 30, 2025 and June 30, 2025;

shares issued:

472,522,958 at March 31, 2025 and 471,018,569 at June 30, 2024;

473,216,446 at September 30, 2025 and 472,541,563 at June 30, 2025;

Class B shares authorized:

304,000,000 at March 31, 2025 and June 30, 2024;

304,000,000 at September 30, 2025 and June 30, 2025;

shares issued and outstanding:

125,542,029 at March 31, 2025 and June 30, 2024

125,542,029 at September 30, 2025 and June 30, 2025

Paid-in capital 7,141 7,012

3 unchanged sentences

Treasury stock, at cost;

238,313,007 Class A shares at March 31, 2025 and 237,871,995 Class A shares at June 30, 2024

238,401,382 Class A shares at September 30, 2025 and 238,316,738 Class A shares at June 30, 2025

( 13,707 ) ( 13,698 )

5 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

Three Months Ended

September 30,

(In millions) 2025 2024

10 unchanged sentences

Pension and post-retirement benefit contributions ( 28 ) ( 32 )

Impairment of goodwill and other intangible assets

Other non-cash items 11 13

Other adjustments and non-cash items

Changes in operating assets and liabilities:

Increase in accounts receivable, net ( 358 ) ( 219 )

Decrease (increase) in inventory and promotional merchandise 6 ( 10 )

Increase in other assets, net

( 11 ) ( 47 )

Decrease in inventory and promotional merchandise

Decrease (increase) in other assets, net

Decrease in accounts payable ( 204 ) ( 337 )

Increase (decrease) in other accrued and noncurrent liabilities

Decrease in operating lease assets and liabilities, net ( 21 ) ( 23 )

Net cash flows provided by operating activities

Decrease in other accrued and noncurrent liabilities

( 79 ) ( 100 )

Increase (decrease) in operating lease assets and liabilities, net

Net cash flows used for operating activities

( 340 ) ( 670 )

Cash flows from investing activities

Capital expenditures ( 395 ) ( 702 )

Proceeds from sale of property, plant and equipment

Purchases of investments — ( 1 )

Capital expenditures ( 96 ) ( 141 )

Proceeds from the disposition of investments 3 —

Settlement of net investment hedges ( 23 ) ( 18 )

1 unchanged sentence

Cash flows from financing activities

Repayments of current debt, net

Proceeds from issuance of long-term debt, net — 649

Debt issuance costs — ( 4 )

Repayments of commercial paper (maturities after three months) — ( 785 )

Repayments of long-term debt

( 503 ) ( 7 )

Net proceeds from stock-based compensation transactions 15 29

Payments to acquire treasury stock ( 35 ) ( 34 )

Settlement of cross-currency swaps

Net proceeds from stock-based compensation transactions 39 15

Dividends paid to stockholders ( 127 ) ( 240 )

Payment for acquisition of noncontrolling interest

Payments to acquire treasury stock ( 9 ) ( 10 )

Payment of deferred consideration

Net cash flows used for financing activities

16 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by U.S.

GAAP for complete financial statements.

The unaudited interim consolidated financial statements furnished reflect all normal and recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

GAAP in annual financial statements.

The unaudited interim consolidated financial statements reflect all normal and recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year.

5 unchanged sentences

Descriptions of the Company’s significant accounting policies are discussed in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate.

Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, as relevant, and makes adjustments when facts and circumstances dictate.

As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions.

2 unchanged sentences

All assets and liabilities of foreign subsidiaries and affiliates are translated at period-end rates of exchange, while revenue and expenses are translated at monthly average rates of exchange for the period.

Unrealized translation gains (losses), net of tax, reported as translation adjustments through other comprehensive income (loss) (“OCI”) attributable to The Estée Lauder Companies Inc.

were $ 78 million and $( 192 ) million, net of tax, during the three months ended March 31, 2025 and 2024, respectively, and $( 130 ) million and $( 103 ) million, net of tax, during the nine months ended March 31, 2025 and 2024, respectively.

Unrealized translation (losses) gains, net of tax, reported as translation adjustments through other comprehensive income (loss) (“OCI”) were $( 32 ) million and $ 115 million, net of tax, during the three months ended September 30, 2025 and 2024, respectively.

For the Company’s subsidiaries operating in highly inflationary economies, the U.S.

dollar is the functional currency, and these subsidiaries are not material to the Company's consolidated financial statements or liquidity.

Remeasurement adjustments in financial statements in a highly inflationary economy and other transactional gains and losses are reflected in earnings (loss).

The Company enters into foreign currency forward contracts and may enter into option contracts to hedge foreign currency transactions for periods consistent with its identified exposures.

dollar is the functional currency, and these subsidiaries are not material to the Company's consolidated financial statements or liquidity as of and for the three months ended September 30, 2025 and 2024.

Remeasurement adjustments in financial statements in a highly inflationary economy and other transactional gains and losses are reflected in earnings.

The Company enters into foreign currency forward contracts to hedge foreign currency transactions for periods consistent with its identified exposures.

The Company also uses cross-currency swap contracts to hedge the impact of foreign currency changes on certain intercompany foreign currency denominated debt.

Additionally, the Company enters into foreign currency forward contracts and cross-currency swap contracts to hedge a portion of its net investment in certain foreign operations, which are designated as net investment hedges.

Additionally, the Company enters into foreign currency forward contracts to hedge a portion of its net investment in certain foreign operations, which are designated as net investment hedges.

See Note 4 – Derivative Financial Instruments for further discussion .

The Company categorizes these instruments as entered into for purposes other than trading.

The accompanying consolidated statements of earnings (loss) include net exchange gains on foreign currency transactions of $ 11 million and $ 23 million during the three months ended March 31, 2025 and 2024, respectively, and $ 55 million and $ 52 million during the nine months ended March 31, 2025 and 2024, respectively.

The accompanying consolidated statements of earnings (loss) include net exchange (losses) gains on foreign currency transactions of $( 6 ) million and $ 19 million during the three months ended September 30, 2025 and 2024, respectively.

THE ESTÉE LAUDER COMPANIES INC.

2 unchanged sentences

The Company is a worldwide manufacturer, marketer and seller of skin care, makeup, fragrance and hair care products.

The Company’s sales subject to credit risk are made primarily to retailers in its travel retail business, department stores, specialty multi-brand retailers and perfumeries.

The Company’s sales subject to credit risk are made primarily to department stores, duty-free retailers, specialty multi retailers, online pure players, perfumeries and pharmacies, and salons and spas.

The Company grants credit to qualified customers.

While the Company does not believe it is exposed significantly to any undue concentration of credit risk at this time, it continues to monitor its customers' abilities, individually and collectively, to make timely payments.

The Company’s largest customer for the three and nine months ended March 31, 2025 sells products primarily in China travel retail.

This customer accounted for $ 218 million, or 12 %, and $ 206 million, or 12 %, of the Company's accounts receivable at March 31, 2025 and June 30, 2024, respectively.

Inventory and Promotional Merchandise

Inventory and promotional merchandise consists of the following:

(In millions) March 31, 2025 June 30, 2024

(In millions) September 30, 2025 June 30, 2025

Raw materials

6 unchanged sentences

Property, plant and equipment consists of the following:

(In millions) March 31, 2025 June 30, 2024

($ in millions)

September 30, 2025 June 30, 2025

Assets (Useful Life)

12 unchanged sentences

(1) Land improvements are depreciated over a 10 year useful life.

Depreciation and amortization of property, plant and equipment was $ 167 million and $ 166 million during the three months ended March 31, 2025 and 2024, respectively, and $ 503 million and $ 491 million during the nine months ended March 31, 2025 and 2024, respectively.

Depreciation and amortization of property, plant and equipment was $ 170 million and $ 168 million during the three months ended September 30, 2025 and 2024, respectively.

Depreciation and amortization related to the Company’s manufacturing process is included in Cost of sales, and all other depreciation and amortization is included in Selling, general and administrative expenses in the accompanying consolidated statements of earnings (loss).

The effective rate for income taxes was 56.9 % and 13.3 % for the three months ended September 30, 2025 and 2024, respectively.

The increase in the effective tax rate of 4,360 basis points was attributable in part to the loss before income taxes in the fiscal 2025 first quarter as well as the estimated unfavorable impact of the newly enacted U.S.

tax legislation, a higher effective tax rate on the Company's foreign operations due to the Company's full year geographical mix of earnings in the current and prior-year periods and an unfavorable impact associated with the establishment of a valuation allowance against current period foreign tax credit and research and development tax credit U.S.

deferred tax assets.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

Effective rate for income taxes 34.0 % 31.1 % 0.3 % 33.9 %

Basis-point change from the prior-year period 290 ( 3,360 )

For the three months ended March 31, 2025, the increase in the effective tax rate was primarily attributable to a higher effective tax rate on the Company's foreign operations due to the Company's full year geographical mix of earnings in the current and prior-year periods, as well as an unfavorable impact associated with previously issued stock-based compensation.

For the nine months ended March 31, 2025, the decrease in the effective tax rate was primarily attributable to the impact of the discrete treatment of charges associated with restructuring and other activities, the impairment of goodwill and other intangible assets, the charge associated with the talcum litigation settlement agreements (See Note 8 - Commitments and Contingencies for further discussion) and an unfavorable impact associated with previously issued stock-based compensation.

On August 16, 2022, the U.S.

federal government enacted the Inflation Reduction Act, including a tax provision implementing a 15% corporate alternative minimum tax based on global adjusted financial statement income.

The corporate alternative minimum tax did not have an impact on the Company's consolidated financial statements for the three and nine months ended March 31, 2025 and 2024.

On August 26, 2024, the U.S.

Tax Court issued a decision in Varian Medical Systems, Inc.

Commissioner.

The decision related to the Tax Cuts and Jobs Act deduction for certain deemed foreign dividends otherwise subject to the Transition Tax on unrepatriated earnings of applicable foreign subsidiaries.

Based on the Company's evaluation of the technical merits of this decision, the Company intends to timely file a protective refund claim with the U.S.

Internal Revenue Service in fiscal 2025 claiming a Transition Tax payable reduction of approximately $ 73 million.

Although the Company has accrued the $ 73 million estimated tax benefit in the provision for income taxes and reduced the Transition Tax payable in the fiscal 2025 first quarter by $ 73 million, at this time the Company believes it is more-likely-than-not that the intended Transition Tax payable reduction claim will not be sustained.

As such, in the fiscal 2025 first quarter the Company correspondingly increased the provision for income taxes for the estimated $ 73 million tax benefit to establish an uncertain tax position reserve accrual for the estimated $ 73 million Transition Tax at issue.

As a result, there was no net impact from this development in the provision for income taxes and accompanying consolidated statement of earnings (loss) for the three and nine months ended March 31, 2025.

In the accompanying consolidated balance sheet as of March 31, 2025, the $ 73 million Transition Tax payable reduction and offsetting $ 73 million uncertain tax position reserve accrual are included in Other noncurrent liabilities.

On July 4, 2025, new U.S tax legislation was enacted known as the One Big Beautiful Bill Act.

This legislation includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of certain business tax provisions.

The legislation has multiple effective dates, with certain provisions becoming effective in fiscal 2026.

The most impactful provision effective beginning in fiscal 2026 relates to the expansion of the business interest expense deduction limitation.

The resulting increase in tax deductible interest expense reduced U.S.

taxable income and increased the excess foreign tax credits generated which require a valuation allowance.

The estimated unfavorable fiscal 2026 impact of the One Big Beautiful Bill Act has been included in the provision for income taxes, and the impact for the three months ended September 30, 2025 was $ 8 million.

In December 2021, the Organization for Economic Cooperation and Development issued "Pillar Two" Global Anti-Base Erosion model rules for countries to enact into domestic law that would establish a 15% global minimum tax applied on a country-by-country basis for multinational companies.

In certain countries that have enacted legislation incorporating the global minimum tax, it became effective for the Company at the beginning of fiscal 2025.

The estimated tax impact of such legislation has been included in the provision for income taxes for the three and nine months ended March 31, 2025 and was not material.

We are continuing to monitor and evaluate the potential impact of newly enacted legislation incorporating the global minimum tax in additional countries.

As of March 31, 2025 and June 30, 2024, the gross amount of unrecognized tax benefits, exclusive of interest and penalties, totaled $ 139 million and $ 65 million, respectively.

The total amount of unrecognized tax benefits at March 31, 2025 that, if recognized, would affect the effective tax rate was $ 129 million.

The significant increase in the gross amount of unrecognized tax benefits as of March 31, 2025 as compared to June 30, 2024 was attributable to having established an uncertain tax position reserve accrual for the Transition Tax payable reduction position determined in the fiscal 2025 first quarter based on the August 26, 2024 U.S.

Tax Court decision in Varian Medical Systems v.

Commissioner, as discussed above.

The total gross interest and penalties accrued related to unrecognized tax benefits during the three and nine months ended March 31, 2025 in the accompanying consolidated statements of earnings (loss) was $ 1 million and $ 4 million, respectively.

The total gross accrued interest and penalties in the accompanying consolidated balance sheets at March 31, 2025 and June 30, 2024, was $ 21 million and $ 17 million, respectively.

On the basis of the information available as of March 31, 2025, the Company does not expect significant changes to the total amount of unrecognized tax benefits within the next twelve months.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the fiscal 2025 second quarter, the Company received notification of the formal conclusion of the compliance process with respect to its fiscal 2023 income tax return under the U.S.

Internal Revenue Service (“IRS”) Compliance Assurance Program (“CAP”), which had no impact on the Company’s consolidated financial statements for the three and nine months ended March 31, 2025.

At March 31, 2025 and June 30, 2024, total Other assets of $ 1,726 million and $ 1,460 million included $ 1,298 million and $ 1,018 million of deferred tax assets, respectively.

The estimated tax impact of such legislation has been included in the provision for income taxes for the three months ended September 30, 2025 and was not material.

As of September 30, 2025 and June 30, 2025, the gross amount of unrecognized tax benefits, exclusive of interest and penalties, totaled $ 141 million and $ 140 million, respectively.

The total amount of unrecognized tax benefits at September 30, 2025 that, if recognized, would affect the effective tax rate was $ 134 million.

The total gross interest and penalties accrued related to unrecognized tax benefits during the three months ended September 30, 2025 in the accompanying consolidated statements of earnings (loss) was $ 2 million.

The total gross accrued interest and penalties in the accompanying consolidated balance sheets at September 30, 2025 and June 30, 2025, was $ 21 million and $ 19 million, respectively.

On the basis of the information available as of September 30, 2025, the Company does not expect significant changes to the total amount of unrecognized tax benefits within the next twelve months.

At September 30, 2025 and June 30, 2025, total Other assets of $ 1,836 million and $ 1,805 million included $ 1,366 million and $ 1,339 million of deferred tax assets, respectively.

Supplier Finance Programs

Under the Company's supplier finance programs, the Company agrees to pay the banks the stated amount of confirmed invoices from its designated suppliers on the due dates of the invoices.

Under its supplier finance programs, the Company agrees to pay the banks the stated amount of confirmed invoices from its designated suppliers on the due dates of the invoices.

The Company may terminate the agreements upon written notice (with notice periods ranging from 30 to 60 days) or immediately upon a breach.

The supplier invoices that have been confirmed as valid under the programs require payment in full within 90 days of the invoice date.

Outstanding obligations confirmed as valid totaling $ 67 million and $ 58 million as of March 31, 2025 and June 30, 2024, respectively, are included in Accounts payable in the accompanying consolidated balance sheets.

Outstanding obligations confirmed as valid totaling $ 65 million and $ 82 million as of September 30, 2025 and June 30, 2025, respectively, are included in Accounts payable in the accompanying consolidated balance sheets.

Other Accrued Liabilities

Other accrued liabilities consist of the following:

(In millions) March 31, 2025 June 30, 2024

Advertising, merchandising and sampling $ 306 $ 276

Employee compensation 492 576

Accrued sales incentives 328 426

(In millions) September 30, 2025 June 30, 2025

Accrued employee compensation

Accrued income taxes

Accrued payroll and other non-income taxes

Accrued restructuring

Accrued sales incentives

Accrued selling, advertising, marketing, promotion and product development

Deferred revenue

Payroll and other non-income taxes 328 333

Accrued income taxes 203 335

Sales return accrual

2 unchanged sentences

$ 3,376 $ 3,529

Recently Adopted Accounting Standards

2022-04 – Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations

In September 2022, the FASB issued authoritative guidance which is intended to enhance the transparency surrounding the use of supplier finance programs.

The guidance requires companies that use supplier finance programs to make annual disclosures about the program’s key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period and associated rollforward information.

Only the amount outstanding at the end of the period must be disclosed in interim periods.

The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.

Effective for the Company – The guidance became effective for the Company’s first quarter fiscal 2024 and has been applied on a retrospective basis, except for the requirement to disclose rollforward information annually which is effective prospectively for the Company beginning in fiscal 2025.

Impact on consolidated financial statements – The Company has supplier financing arrangements and applied the disclosure requirements as required by the amendments.

Such information is included in Supplier Finance Programs above within Note 1 – Summary of Significant Accounting Policies .

THE ESTÉE LAUDER COMPANIES INC.

1 unchanged sentence

Recently Issued Accounting Standards

2025-06 – Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40)

In September 2025, the FASB issued authoritative guidance to modernize the accounting for the costs to develop software for internal use to align better with current software development methods, such as agile programming.

Capitalization of eligible costs will begin when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

In evaluating whether it is probable the project will be completed, entities are required to consider whether there is significant uncertainty associated with the development activities of the software.

The new standard does not change the types of costs that are capitalizable once the threshold for capitalization is met.

Capitalization ceases when the software project is substantially complete and ready for its intended use, which typically occurs after all substantial testing is completed.

Furthermore, the guidance supersedes website development costs guidance and incorporates the recognition requirements for website-specific development costs into Subtopic 350-40.

The guidance clarifies that existing disclosure requirements under ASC 360 for property, plant and equipment apply to capitalized costs under the new standard, regardless of how the internal-use software is classified on the balance sheet or how it was acquired.

Effective for the Company :

The guidance becomes effective for the Company’s first quarter of fiscal 2029.

The guidance can be applied prospectively, retrospectively or through a modified transition approach.

Early adoption is permitted.

Impact on consolidated financial statements :

The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements.

2025-05 – Measurement of Credit Losses for Accounts Receivable and Contract Assets (Topic 326)

In July 2025, the FASB issued authoritative guidance related to the estimation of expected credit losses for current accounts receivable and current contract assets.

The guidance allows entities to elect a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset in the development of a reasonable and supportable forecast as part of estimating expected credit losses.

Entities electing the practical expedient are still required to adjust historical loss information to reflect current conditions to the extent that historical loss information does not reflect current conditions.

An entity that elects to use the practical expedient is required to disclose that fact.

Effective for the Company :

The guidance becomes effective for the Company’s first quarter of fiscal 2027 and is applied prospectively.

Early adoption is permitted.

Impact on consolidated financial statements :

The Company is currently evaluating the impact that this guidance will have on its accounts receivable balance and consolidated financial statement disclosures.

2024-03 and 2025-01 – Disaggregation of Income Statement Expenses (Subtopic 220-40)

10 unchanged sentences

however, retrospective application is permitted.

Impact on the consolidated financial statements :

Impact on consolidated financial statements :

The Company is currently evaluating the impact that this guidance will have on its consolidated financial statement disclosures.

2023-07 – Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued authoritative guidance to improve reportable segment disclosure requirements.

Companies are required to disclose significant segment expenses by reportable segment if they are regularly provided to the chief operating decision maker (CODM).

Companies are also required to disclose other segment items by reportable segment.

The guidance clarifies that companies may disclose more than one measure of segment profit or loss used by the CODM, provided that at least one of the reported measures includes the segment profit or loss measure that is most consistent with U.S.

GAAP measurement principles.

All existing annual disclosures about segment profit or loss, as well as the new requirements, must now be provided on an interim basis.

Additionally, on an annual basis, the CODM’s title and position is required, as well as an explanation of how the CODM uses the reported measure(s) and other disclosures.

The guidance does not change how companies identify their operating segments, aggregate those operating segments, or apply the quantitative thresholds to determine their reportable segments.

Effective for the Company – The guidance is effective for the Company’s fiscal year ending June 30, 2025 Form 10-K and then in interim periods beginning in the Company’s first quarter of fiscal 2026.

Early adoption is permitted.

The guidance should be applied retrospectively unless impracticable.

Impact on consolidated financial statement s – The Company is currently evaluating the impact that this guidance will have on its consolidated financial statement disclosures.

2023-09 – Income Taxes (Topic 740):

2 unchanged sentences

(1) greater disaggregation of information in the effective tax rate reconciliations and (2) disclosure of income taxes paid, disaggregated by applicable jurisdiction.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Companies are required to use specific categories to prepare and disclose a tabular rate reconciliation (using both percentages and reporting currency amounts) of:

3 unchanged sentences

The guidance also codifies existing SEC rules that require companies to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign as well as income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign jurisdictions.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective for the Company – The guidance is effective for the Company’s fiscal year ending June 30, 2026 Form 10-K.

2 unchanged sentences

Impact on consolidated financial statement s – The Company is currently evaluating the impact that this guidance will have on its consolidated financial statement disclosures.

SEC Final Rule Release No.

33-11275 – The Enhancement and Standardization of Climate-Related Disclosures for Investors

In March 2024, the SEC adopted rules intended to enhance and standardize climate-related disclosures in registration statements and annual reports.

The rules require significant effects of severe weather events and other natural conditions, amounts related to carbon offsets and renewable energy credits or certificates, as well as material impacts on financial estimates and assumptions that are due to severe weather events and other natural conditions or disclosed climate-related targets or transition plans to be disclosed in the annual financial statements in certain circumstances.

Effective for the Company – On April 4, 2024, the SEC issued an order staying the final rule on climate-related disclosures pending certain legal challenges.

Under the rule as currently issued, the disclosure requirements related to the annual financial statements are expected to be effective for the Company's fiscal year ending June 30, 2026 Form 10-K.

The Company is not required to provide comparative information in the year of adoption.

Impact on consolidated financial statement s – The Company is currently evaluating the impact that this guidance will have on its annual consolidated financial statement disclosures.

NOTE 2 – GOODWILL AND OTHER INTANGIBLE ASSETS

The Company assigns goodwill at the time of acquisition to a reporting unit, which is one level below the Company's operating segments.

The skin care, makeup, fragrance and hair care product categories are the Company's operating segments.

The following table presents goodwill by product category and the related change in the carrying amount:

1 unchanged sentence

Balance as of June 30, 2025

Goodwill, gross carrying amount

$ 1,616 $ 1,116 $ 260 $ 353 $ 3,345

1 unchanged sentence

( 435 ) ( 745 ) ( 30 ) — ( 1,210 )

Total goodwill

1,181 371 230 353 2,135

Impairment charges

— ( 13 ) — — ( 13 )

Translation adjustments, goodwill

2 unchanged sentences

( 16 ) — — — ( 16 )

Balance as of March 31, 2025

Goodwill, gross carrying amount

Balance as of September 30, 2025

1,592 1,116 260 353 3,321

7 unchanged sentences

Other intangible assets consist of the following:

March 31, 2025 June 30, 2024

September 30, 2025 June 30, 2025

(In millions) Gross

10 unchanged sentences

$ 3,706 $ 3,759

The aggregate amortization expense related to amortizable intangible assets was $ 34 million and $ 36 million for the three months ended March 31, 2025 and 2024, respectively, and $ 105 million and $ 109 million for the nine months ended March 31, 2025 and 2024, respectively.

The aggregate amortization expense related to amortizable intangible assets was $ 26 million and $ 36 million for the three months ended September 30, 2025 and 2024, respectively.

The estimated aggregate amortization expense for the remainder of fiscal 2026 and for each of the next four fiscal years is as follows:

1 unchanged sentence

Estimated aggregate amortization expense $ 78 $ 87 $ 71 $ 69 $ 67

Impairment Analysis During the Nine Months Ended March 31, 2025

During the fiscal 2025 second quarter, the TOM FORD brand experienced lower-than-expected growth within key geographic regions and channels, including in mainland China, Asia travel retail and Hong Kong SAR.

Also during the fiscal 2025 second quarter, the Too Faced reporting unit experienced lower-than-expected results in key geographic regions and channels.

As a result, the Company made revisions to the internal forecasts relating to its TOM FORD brand and Too Faced reporting unit.

Additionally, there were increases in the weighted average cost of capital for both the TOM FORD brand and Too Faced reporting unit as compared to the prior-year annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2024.

The Company concluded that the changes in circumstances in the TOM FORD brand and Too Faced reporting unit, along with increases in the weighted average cost of capital, triggered the need for interim impairment reviews of the TOM FORD trademark and the Too Faced trademark and goodwill.

These changes in circumstances were also an indicator that the carrying amounts of Too Faced’s long-lived assets, including customer lists, may not be recoverable.

Accordingly, the Company performed interim impairment tests for the TOM FORD and Too Faced trademarks and Too Faced goodwill as well as a recoverability test for the Too Faced long-lived assets as of December 31, 2024.

The Company concluded that the carrying value of the trademark intangible assets exceeded their estimated fair values, which were determined utilizing the relief-from-royalty method, and recorded an impairment charge of $ 773 million for TOM FORD and $ 75 million for Too Faced.

The Company concluded that the carrying amounts of the long-lived assets for Too Faced were recoverable.

Additionally, as a result of the interim impairment review, the remaining carrying value of Too Faced’s goodwill was not recoverable and the Company recorded an impairment charge of $ 13 million, reducing the carrying value to zero .

The significant assumptions used in the relief-from-royalty method include revenue growth rates and profit margins, terminal values, weighted average cost of capital used to discount future cash flows and royalty rates.

The most significant unobservable input used to estimate the fair value of the TOM FORD and Too Faced trademark intangible assets was the weighted average cost of capital, which was 11.5 % and 14 %, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the impairment charges for the nine months ended March 31, 2025 and the remaining trademark and goodwill carrying values as of March 31, 2025, for the TOM FORD brand and Too Faced reporting unit, are as follows:

Impairment Charges (1)

Carrying Value

(In millions) Nine Months Ended

March 31, 2025 As of March 31, 2025

Brand/Reporting Unit Geographic Region Trademark

Trademark (2)

$ 773 $ — $ 1,805 $ —

$ 848 $ 13 $ 1,917 $ —

(1) The date of the fair value measurement for the TOM FORD and Too Faced trademark intangible assets and Too Faced reporting unit was December 31, 2024.

(2) The carrying values of the trademark intangible assets, immediately subsequent to the impairment charges, are equal to their fair values.

The impairment charge related to the TOM FORD trademark intangible asset for the nine months ended March 31, 2025 of $ 773 million was reflected in the fragrance, makeup and other product categories of $ 549 million, $ 170 million and $ 54 million, respectively.

The trademark and goodwill impairment charges related to Too Faced were reflected in the makeup product category.

NOTE 3 – CHARGES ASSOCIATED WITH RESTRUCTURING AND OTHER ACTIVITIES

1 unchanged sentence

As announced on November 1, 2023, the Company launched the Profit Recovery and Growth Plan ("PRGP") to help progressively rebuild its profit margins in fiscal years 2025 and 2026.

The PRGP is focused on rebuilding stronger, more sustainable profitability, supporting sales growth acceleration and increasing speed and agility.

The plan is designed to improve gross margin, lower the cost base and reduce overhead expenses, while increasing investments in key consumer-facing activities.

Upon completion of this plan, the Company expects to have improved its gross margin and expense base to drive greater operating leverage for the future.

As a component of the PRGP, on February 5, 2024, the Company announced a two-year restructuring program.

The restructuring program’s main focus included the reorganization and rightsizing of certain areas of the Company as well as simplification and acceleration of processes.

The Company committed to this course of action on February 1, 2024.

In connection with the restructuring program, the Company estimated a net reduction in the range of approximately 1,800 to 3,000 positions globally, which was about 3 - 5 % of its positions including temporary and part-time employees as of June 30, 2023.

This reduction took into account the elimination of some positions as well as retraining and redeployment of certain employees in select areas.

The Company planned to substantially complete specific initiatives under the restructuring program through fiscal 2026.

The Company expected that the restructuring program would result in restructuring and other charges totaling between $ 500 million and $ 700 million, before taxes, consisting of employee-related costs, contract terminations, asset write-offs and other costs associated with implementing these initiatives.

After reviewing additional potential initiatives and the progress of previously approved initiatives, on February 3, 2025, the Company committed to the expansion of the PRGP, including an expansion of the restructuring program.

The expansion of the overall PRGP is focused on three key areas.

First, the Company plans to adopt a more competitive approach to procurement, a key pillar of savings, by further consolidating spending and strategically re-evaluating key supplier relationships.

Second, the Company plans to further improve efficiencies within its supply chain network through a zero-waste approach, aiming to improve demand forecasting and innovation planning to minimize excess inventory and product destruction.

Third, the Company is outsourcing select services to proven global partners.

The expanded component of the restructuring program began during the Company’s fiscal 2025 third quarter.

The focus of the overall expanded restructuring program (collectively the “Restructuring Program”) includes (i) reorganization and rightsizing of certain areas, (ii) simplification and acceleration of processes, (iii) outsourcing of select services and (iv) evolution of go-to-market footprint and selling models.

Cumulative initiatives under the Restructuring Program are expected to be approved by the end of fiscal 2026 and substantially completed by the end of fiscal 2027.

In connection with the Restructuring Program, as of September 30, 2025, the Company estimates a net reduction in the range of approximately 5,800 to 7,000 positions globally, which is about 9 - 11 % of its positions including temporary and part-time employees as of June 30, 2023.

This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas.

The Company expects that the Restructuring Program will result in restructuring and other charges totaling between $ 1,200 million and $ 1,600 million, before taxes, consisting of employee-related costs, asset-related costs, contract terminations and other costs associated with implementing these initiatives, which other than the non-cash charges, are expected to result in future cash expenditures funded from cash provided by operations.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The expanded component of the restructuring program began during the Company’s fiscal 2025 third quarter with all initiatives to be approved by the end of fiscal 2026.

Specific initiatives under the expanded component of the restructuring program are expected to be substantially completed by the end of fiscal 2027.

The focus of the now expanded restructuring program (now, collectively the “Restructuring Program”) includes (i) reorganization and rightsizing of certain areas and (ii) simplification and acceleration of processes, along with the newly added focus on (i) outsourcing of select services and (ii) evolution of go-to-market footprint and selling models.

In connection with the Restructuring Program, the Company now estimates a net reduction in the range of approximately 5,800 to 7,000 positions globally, which is about 9 - 11 % of its positions including temporary and part-time employees as of June 30, 2023.

This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas.

The Company now expects that the Restructuring Program will result in restructuring and other charges totaling between $ 1,200 million and $ 1,600 million, before taxes, consisting of employee-related costs, contract terminations, asset write-offs and other costs associated with implementing these initiatives, which other than the non-cash charges, are expected to result in future cash expenditures funded from cash provided by operations.

Restructuring Program Component of the Profit Recovery and Growth Plan Approvals

Cumulative charges for initiatives approved by the Company in connection with the Restructuring Program as of March 31, 2025 and through April 24, 2025 were:

Additional information relating to the Company's Profit Recovery and Growth Plan and related Restructuring Program is included in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Restructuring Program Approvals

Cumulative charges for initiatives approved by the Company in connection with the Restructuring Program as of September 30, 2025 and through October 26, 2025, were:

Net Sales) Cost of Sales Operating Expenses Total

4 unchanged sentences

$ 4 $ 10 $ 552 $ 114 $ 680

Nine months ended March 31, 2025 5 10 351 42 408

Cumulative charges approved through March 31, 2025

Three months ended September 30, 2025

1 — 107 39 147

April 1, 2025 - April 24, 2025

Cumulative charges approved through April 24, 2025

Cumulative charges approved through September 30, 2025

5 10 659 153 827

Included in the above table, cumulative restructuring charges for initiatives approved by the Company in connection with the Restructuring Program as of March 31, 2025 and through April 24, 2025 were:

October 1, 2025 - October 26, 2025

( 1 ) — 24 2 25

Cumulative charges approved through October 26, 2025

$ 4 $ 10 $ 683 $ 155 $ 852

Included in the above table, cumulative restructuring charges for initiatives approved by the Company in connection with the Restructuring Program as of September 30, 2025 and through October 26, 2025, by major cost type were:

(In millions) Employee-

4 unchanged sentences

$ 512 $ 14 $ 3 $ 23 $ 552

Nine months ended March 31, 2025 330 6 3 12 351

Cumulative charges approved through March 31, 2025

Three months ended September 30, 2025

64 39 1 3 107

April 1, 2025 - April 24, 2025

Cumulative charges approved through April 24, 2025

Cumulative charges approved through September 30, 2025

576 53 4 26 659

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 1, 2025 - October 26, 2025

Cumulative charges approved through October 26, 2025

$ 599 $ 53 $ 4 $ 27 $ 683

Specific actions taken since the Restructuring Program inception to drive future sales growth and productivity to rebuild gross and operating margin profitability include:

• Value Chain Optimization – The Company approved initiatives to reduce spans and layers and right-size organizational capability within its supply chain and research and development functions.

These actions will primarily result in employee severance through a net reduction in workforce, as well as costs to decommission and relocate activities, and asset write-offs.

These actions will primarily result in employee severance through a net reduction in workforce, as well as asset-related costs and costs to decommission and relocate activities.

• Enabling Function Re-Invention – The Company approved initiatives to reorganize and right-size various corporate functions.

These activities will primarily result in employee severance through a net reduction in workforce.

• Future of Brand-led Model – The Company approved initiatives to redesign spans and layers in its marketing and creative organization to make it leaner, faster, and more agile.

• Future of Brand-led Model – The Company approved initiatives to redesign spans and layers in its marketing, creative and other functions within the brand and product category structures to make them leaner, faster and more agile.

These activities will primarily result in employee severance through a net reduction in workforce.

• Go-to-Market Operating Model Acceleration – The Company approved initiatives to optimize and right-size the organizational structure within its geographic regions to drive greater efficiency and effectiveness, as well as exit unprofitable brands from specific markets and distribution channels.

These activities will result in employee severance through a net reduction in workforce, inventory write-offs, as well as costs associated with sales returns.

These activities will primarily result in employee severance through a net reduction in workforce, inventory write-offs, as well as costs associated with sales returns.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• Digital Organization Transformation – The Company approved initiatives to begin to reorganize and right-size its technology functions, which support its internal enterprise and commercial capabilities, to create a leaner, faster, more effective and more agile technology organization.

These activities will primarily result in employee severance through a net reduction in workforce.

Once the relevant accounting criteria have been met, the Company expects to record restructuring and other charges of approximately $ 623 million (before tax) in connection with these initiatives, which other than the non-cash charges, are expected to result in future cash expenditures funded from cash provided by operations.

These activities will primarily result in employee severance through a net reduction in workforce, as well as asset-related costs.

Once the relevant accounting criteria have been met, the Company expects to record cumulative restructuring and other charges of approximately $ 852 million (before tax) in connection with these initiatives, which other than the non-cash charges, are expected to result in future cash expenditures funded from cash provided by operations.

Restructuring Program Restructuring and Other Charges

1 unchanged sentence

Employee-Related Costs – Employee-related costs are primarily comprised of severance and other post-employment benefit costs, calculated based on salary levels, prior service and other statutory minimum benefits, if applicable.

Asset-Related Costs – Asset-related costs primarily consist of asset write-offs or accelerated depreciation related to long-lived assets (including rights associated with commercial operating leases and operating lease right-of-use assets) that will be taken out of service prior to their existing useful life as a direct result of a restructuring initiative.

Asset-Related Costs – Asset-related costs primarily consist of asset write-offs or accelerated depreciation related to long-lived assets (including operating lease right-of-use assets) that will be taken out of service prior to their existing useful life as a direct result of a restructuring initiative.

Contract Terminations – Costs related to contract terminations include continuing payments to a third party after the Company has ceased benefiting from the rights conveyed in the contract, or a payment made to terminate a contract prior to its expiration.

2 unchanged sentences

Sales Returns and Cost of Sales – Product returns (offset by the related cost of sales) and inventory write-offs or write-downs as a direct result of an approved restructuring initiative to exit certain businesses or locations will be recorded as a component of Net sales and/or Cost of sales when estimable and reasonably assured.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Charges – Other charges related to the design and implementation of approved initiatives, which are charged to Operating expenses as incurred and primarily include the following:

1 unchanged sentence

• Temporary labor backfill;

• Costs to establish and maintain a Project Management Office for the duration of the Restructuring Program, including internal costs for employees dedicated solely to project management activities, and consulting services to assist with business case development;

• Recruitment and training costs for new and reskilled employees to acquire and apply the capabilities needed to perform responsibilities as a direct result of an approved restructuring initiative.

The Company records approved charges associated with restructuring and other activities once the relevant accounting criteria have been met.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total cumulative charges recorded associated with restructuring and other activities for the Restructuring Program were:

2 unchanged sentences

Charges Other

Total Cumulative Charges

Total Charges

Cumulative charges through June 30, 2025

Six months ended December 31, 2024 — 9 256 23 288

Three months ended March 31, 2025 — — 81 14 95

Cumulative charges through March 31, 2025 $ — $ 9 $ 429 $ 60 $ 498

$ — $ 9 $ 524 $ 77 $ 610

Three months ended September 30, 2025

— ( 2 ) 72 17 87

Cumulative charges through September 30, 2025

$ — $ 7 $ 596 $ 94 $ 697

Included in the above table, cumulative restructuring charges recorded by the Company in connection with the Restructuring Program as of September 30, 2025, by major cost type were:

(In millions) Employee-

3 unchanged sentences

Cumulative charges through June 30, 2025

Six months ended December 31, 2024 247 7 — 2 256

Three months ended March 31, 2025 78 — 3 — 81

Cumulative charges through March 31, 2025 $ 415 $ 9 $ 3 $ 2 $ 429

For the three and nine months ended March 31, 2024, charges recorded associated with restructuring and other activities for the Restructuring Program were $ 17 million.

Changes in accrued restructuring charges from the Restructuring Program for the nine months ended March 31, 2025 were:

$ 503 $ 13 $ 3 $ 5 $ 524

Three months ended September 30, 2025

Cumulative charges through September 30, 2025

$ 569 $ 18 $ 3 $ 6 $ 596

Changes in accrued restructuring charges from the Restructuring Program for the three months ended September 30, 2025 were:

(In millions) Employee-

5 unchanged sentences

Cash payments ( 66 ) — — ( 1 ) ( 67 )

Non-cash asset write-offs

Non-cash asset-related costs

— ( 5 ) — — ( 5 )

1 unchanged sentence

( 2 ) — — — ( 2 )

Balance at March 31, 2025 $ 335 $ — $ 3 $ — $ 338

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accrued restructuring charges at March 31, 2025 relating to the Restructuring Program are expected to result in cash expenditures funded from cash provided by operations of approximately $ 122 million, $ 150 million, $ 61 million and $ 5 million for the remainder of fiscal 2025 and for fiscal 2026, 2027 and 2028, respectively.

Balance at September 30, 2025

$ 367 $ — $ 2 $ — $ 369

Accrued restructuring charges at September 30, 2025 relating to the Restructuring Program are expected to result in cash expenditures funded from cash provided by operations of approximately $ 248 million, $ 104 million and $ 17 million for the remainder of fiscal 2026 and for fiscal 2027 and 2028, respectively.

Charges associated with restructuring and other activities are not allocated to the Company's product categories or geographic regions because they are centrally directed and controlled, are not included in internal measures of product category or geographic region performance and result from activities that are deemed Company-wide initiatives to redesign, resize and reorganize select areas of the business.

Post-COVID Business Acceleration Program

The Company approved specific initiatives under the Post-COVID Business Acceleration Program (the “PCBA Program”) through fiscal 2022 and has substantially completed those initiatives.

Additional information about the PCBA Program is included in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

NOTE 4 – DERIVATIVE FINANCIAL INSTRUMENTS

2 unchanged sentences

Costs associated with entering into derivative financial instruments have not been material to the Company’s consolidated financial results.

At March 31, 2025, the notional amount of derivatives not designated as hedging instruments was $ 3,704 million.

At September 30, 2025, the notional amount of derivatives not designated as hedging instruments was $ 3,314 million.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Hedges

The Company enters into interest rate derivative contracts to manage the exposure to interest rate fluctuations on its funded indebtedness.

At March 31, 2025, the Company has interest rate swap agreements, with notional amounts totaling $ 700 million and $ 300 million to effectively convert the fixed rate interest on its 2030 Senior Notes and 2031 Senior Notes, respectively, to variable interest rates based on the three-month fallback Secured Overnight Financing Rate ("SOFR") plus a margin.

At September 30, 2025, the Company has interest rate swap agreements, with notional amounts totaling $ 700 million, $ 300 million and $ 300 million, to effectively convert the fixed rate interest on its 2030 Senior Notes, 2031 Senior Notes and 2034 Senior Notes, respectively, to variable interest rates based on the Secured Overnight Financing Rate ("SOFR") plus a margin.

These interest rate swap agreements are designated as fair value hedges of the related long-term debt, and the changes in the fair value of the interest rate swap agreements are exactly offset by the change in the fair value of the underlying long-term debt.

The Company enters into cross-currency swap contracts to manage the exposure of foreign exchange rate fluctuations on its intercompany foreign currency denominated debt.

At March 31, 2025, the Company has cross-currency swap contracts with notional amounts totaling $ 491 million, to hedge the impact of foreign currency changes on certain intercompany foreign currency denominated debt.

The cross-currency swap contracts are designated as fair value hedges of the related intercompany debt, and the gains and losses representing hedge components included in the assessment of effectiveness are presented in the same line item as the earnings effect of the hedged transaction in the consolidated statements of earnings (loss).

At September 30, 2025, the Company has cross-currency swap contracts with notional amounts totaling $ 491 million, to hedge the impact of foreign currency changes on certain intercompany foreign currency denominated debt.

The cross-currency swap contracts are designated as fair value hedges of the related intercompany debt, and the gains and losses representing hedge components included in the assessment of effectiveness are presented in the same income statement line item as the earnings effect of the hedged transaction in the consolidated statements of earnings (loss).

Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis.

The earnings recognition of excluded components is presented in the same line item as the earnings effect of the hedged transaction in the consolidated statements of earnings (loss).

The earnings recognition of excluded components is presented in the same income statement line item as the earnings effect of the hedged transaction in the consolidated statements of earnings (loss).

Any difference between the changes in the fair value of the excluded components and amounts recognized in earnings (loss) will be recognized in Accumulated Other Comprehensive Loss ("AOCI").

The estimated net gain on the Company’s derivative instruments designated as fair value hedges as of March 31, 2025 that is expected to be reclassified from AOCI into earnings (loss), net of tax, within the next twelve months is $ 14 million.

The accumulated net gain (loss) on derivative instruments designated as fair value hedges in AOCI was $ 7 million and $( 7 ) million as of March 31, 2025 and June 30, 2024, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated net gain on the Company’s derivative instruments designated as fair value hedges as of September 30, 2025 that is expected to be reclassified from AOCI into earnings, net of tax, within the next twelve months is $ 14 million.

The accumulated net gain on derivative instruments designated as fair value hedges in AOCI was $ 10 million and $ 7 million as of September 30, 2025 and June 30, 2025, respectively.

Cash Flow Hedges

The Company enters into foreign currency forward contracts, and may enter into foreign currency option contracts, to hedge anticipated transactions and receivables and payables denominated in foreign currencies, for periods consistent with the Company’s identified exposures.

The Company enters into foreign currency forward contracts to hedge anticipated transactions and receivables and payables denominated in foreign currencies, for periods consistent with the Company’s identified exposures.

The purpose of the hedging activities is to minimize the effect of foreign exchange rate movements on the cash flows that the Company receives from foreign subsidiaries.

The foreign currency forward contracts entered into to hedge anticipated transactions have been designated as cash flow hedges and have varying maturities through the end of December 2026.

The foreign currency forward contracts entered into to hedge anticipated transactions and receivables and payables denominated in foreign currencies have been designated as cash flow hedges and have varying maturities through the end of March 2027.

Hedge effectiveness of the foreign currency forward contracts is based on the forward method, which includes forward points in the effectiveness assessment.

At March 31, 2025, the Company had cash flow hedges outstanding with a notional amount totaling $ 2,129 million.

At September 30, 2025, the Company had cash flow hedges outstanding with a notional amount totaling $ 1,270 million.

For foreign currency hedge contracts that are no longer deemed highly effective, hedge accounting is discontinued and gains and losses in AOCI are reclassified to Net sales when the underlying forecasted transaction occurs.

If it is probable that the forecasted transaction will no longer occur, then any gains or losses in AOCI are reclassified to current-period Net sales.

As of March 31, 2025, the Company’s foreign currency cash flow hedges were highly effective.

As of September 30, 2025, the Company’s foreign currency cash flow hedges were highly effective.

The Company may enter into interest rate forward contracts to hedge anticipated issuance of debt for periods consistent with the Company’s identified exposures.

The purpose of the hedging activities is to minimize the effect of interest rate movements on the cost of debt issuance.

The estimated net gain on the Company’s derivative instruments designated as cash flow hedges as of March 31, 2025 that is expected to be reclassified from AOCI into earnings (loss), net of tax, within the next twelve months is $ 13 million.

The accumulated net gain on derivative instruments designated as cash flow hedges in AOCI was $ 50 million and $ 76 million as of March 31, 2025 and June 30, 2024, respectively.

The estimated net loss on the Company’s derivative instruments designated as cash flow hedges as of September 30, 2025 that is expected to be reclassified from AOCI into earnings, net of tax, within the next twelve months is $ 24 million.

The accumulated net gain (loss) on derivative instruments designated as cash flow hedges in AOCI was $ 3 million and $( 13 ) million as of September 30, 2025 and June 30, 2025, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net Investment Hedges

2 unchanged sentences

The purpose of the hedging activities is to minimize the effect of foreign exchange rate movements on the Company’s net investment in these foreign operations.

The net investment hedge contracts have varying maturities through the end of September 2025.

The net investment hedge contracts have varying maturities through the end of November 2029.

Hedge effectiveness of the net investment hedge contracts is based on the spot method.

At March 31, 2025, the Company had net investment hedges outstanding with a notional amount totaling $ 1,296 million.

At September 30, 2025, the Company had net investment hedges outstanding with notional amounts totaling $ 1,077 million.

As a matter of policy, the Company enters into derivative contracts only with counterparties that have a long-term credit rating of at least A- or higher by at least two nationally recognized rating agencies.

The counterparties to these contracts are major financial institutions.

Exposure to credit risk in the event of nonperformance by any of the counterparties is limited to the gross fair value of contracts in asset positions, which totaled $ 119 million at March 31, 2025.

Exposure to credit risk in the event of nonperformance by any of the counterparties is limited to the gross fair value of contracts in asset positions, which totaled $ 74 million at September 30, 2025.

To manage this risk, the Company has strict counterparty credit guidelines that are continually monitored.

Accordingly, management believes risk of loss under these hedging contracts is remote.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair values of the Company’s derivative financial instruments included in the consolidated balance sheets are presented as follows:

3 unchanged sentences

(In millions) Balance Sheet

Location March 31, 2025 June 30, 2024 Balance Sheet

Location March 31, 2025 June 30, 2024

Location September 30, 2025 June 30, 2025 Balance Sheet

Location September 30, 2025 June 30, 2025

Derivatives Designated as Hedging Instruments:

12 unchanged sentences

(1) See Note 5 – Fair Value Measurements for further information about how the fair value of derivative assets and liabilities are determined.

(2) Included in the asset derivatives for the foreign currency forward contracts at March 31, 2025 and June 30, 2024 is $ 2 million, classified within Other assets in the accompanying consolidated balance sheets.

(3) Included in the asset derivatives for the cross-currency swap contracts at March 31, 2025 and June 30, 2024 is approximately $ 50 million and $ 70 million, respectively, classified within Other assets in the accompanying consolidated balance sheets.

(2) Included in the asset derivatives for the foreign currency forward contracts at September 30, 2025 is $ 1 million, classified within Other assets in the accompanying consolidated balance sheets.

There were no amounts classified in Other assets at June 30, 2025.

(3) Included in the asset derivatives for the cross-currency swap contracts at September 30, 2025 and June 30, 2025 is approximately $ 50 million and $ 40 million, respectively, classified within Other assets in the accompanying consolidated balance sheets.

THE ESTÉE LAUDER COMPANIES INC.

5 unchanged sentences

from AOCI into

Earnings (Loss) Amount of Gain (Loss)

Earnings Amount of Gain (Loss)

Reclassified from AOCI into Earnings (Loss) (1)

Three Months Ended

March 31, Three Months Ended

September 30,

Three Months Ended

September 30,

(In millions) 2025 2024 2025 2024

1 unchanged sentence

Foreign currency forward contracts $ 16 $ ( 47 ) Net sales

Interest rate contracts

— — Interest expense

Total cash flow hedges

2 unchanged sentences

Foreign currency forward contracts (3)

( 29 ) 11 — —

Cross-currency swap contracts (4)

2 unchanged sentences

Total derivatives $ 31 $ ( 111 ) $ — $ 10

(1) The amount reclassified into earnings (loss) as a result of the discontinuance of cash flow hedges because it is probable that forecasted transactions will not occur by the end of the original time period was not material.

(2) During the three months ended March 31, 2025 and 2024, the gain recognized in earnings (loss) from net investment hedges related to the amount excluded from effectiveness testing was $ 7 million and $ 3 million, respectively.

(3) Included within translation adjustments as a component of AOCI on the Company’s consolidated balance sheets.

Amount of Gain (Loss)

Recognized in OCI on

Derivatives Location of Gain (Loss) Reclassified

from AOCI into

Earnings (Loss) Amount of Gain (Loss)

Reclassified from AOCI into Earnings (Loss) (1)

Nine Months Ended

March 31, Nine Months Ended

(In millions) 2025 2024 2025 2024

Derivatives in Cash Flow Hedging Relationships:

Foreign currency forward contracts $ 6 $ 28 Net sales

Interest rate contracts

— — Interest expense

Total cash flow hedges

Derivatives in Net Investment Hedging Relationships (2)(3) :

Foreign currency forward contracts

( 7 ) ( 6 ) — —

Cross-currency swap contracts ( 4 ) — — —

Total net investment hedges

( 11 ) ( 6 ) — —

Total derivatives $ ( 5 ) $ 22 $ 32 $ 35

(2) During the nine months ended March 31, 2025 and 2024, the gain recognized in earnings (loss) from net investment hedges related to the amount excluded from effectiveness testing was $ 22 million and $ 13 million, respectively.

(1) There was no amount reclassified into the accompanying consolidated statements of earnings (loss) as a result of the discontinuance of cash flow hedges because it is probable that forecasted transactions will not occur by the end of the original time period.

(2) Included within translation adjustments as a component of AOCI on the Company’s consolidated balance sheets.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) During the three months ended September 30, 2025 and 2024, the gain recognized in the accompanying consolidated statements of earnings (loss) from foreign currency forward contracts related to the amount excluded from effectiveness testing was $ 3 million and $ 7 million, respectively.

(4) During the three months ended September 30, 2025, the gain recognized in the accompanying consolidated statements of earnings (loss) from cross-currency swap contracts related to the amount excluded from effectiveness testing was $ 3 million.

Amount of Gain (Loss)

Recognized in Earnings (Loss) on

Recognized in Earnings (Loss) on Derivatives

Location of Gain (Loss) Recognized in Earnings (Loss) on Derivatives

Three Months Ended

March 31, Nine Months Ended

September 30,

(In millions) 2025 2024

5 unchanged sentences

(1) Changes in the fair value representing hedge components included in the assessment of effectiveness of the cross-currency swap contracts are exactly offset by the change in the fair value of the underlying intercompany foreign currency denominated debt.

The gain recognized in earnings (loss) from cross-currency swap contracts related to the amount excluded from effectiveness testing during each of the three months ended March 31, 2025 and 2024 was $ 5 million, and during each of the nine months ended March 31, 2025 and 2024 was $ 14 million.

The gain recognized in the accompanying consolidated statements of earnings (loss) from cross-currency swap contracts related to the amount excluded from effectiveness testing during the three months ended September 30, 2025 and 2024 was $ 5 million and $ 4 million, respectively.

(2) Changes in the fair value of the interest rate contracts are exactly offset by the change in the fair value of the underlying long-term debt.

Additional information regarding the cumulative amount of fair value hedging gain (loss) recognized in earnings (loss) for items designated and qualifying as hedged items in fair value hedges is as follows:

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additional information regarding the cumulative amount of fair value hedging gain (loss) recognized in the accompanying consolidated statements of earnings (loss) for items designated and qualifying as hedged items in fair value hedges is as follows:

(In millions)

3 unchanged sentences

Included in the Carrying Amount of the Hedged Liability

March 31, 2025 March 31, 2025

September 30, 2025 September 30, 2025

Long-term debt $ 1,185 $ ( 100 )

Intercompany debt $ — $ 54

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additional information regarding the effects of fair value and cash flow hedging relationships for derivatives designated and qualifying as hedging instruments is as follows:

Three Months Ended March 31,

(In millions) Net Sales Selling, General and Administrative Interest

Expense Net Sales Selling, General and Administrative Interest

Total amounts of income and expense line items presented in the consolidated statements of earnings (loss) in which the effects of fair value and cash flow hedges are recorded $ 3,550 $ 2,258 $ 87 $ 3,940 $ 2,284 $ 94

The effects of fair value and cash flow hedging relationships:

Gain (loss) on fair value hedge relationships – interest rate contracts:

Hedged item N/A N/A ( 21 ) N/A N/A 17

Derivatives designated as hedging instruments N/A N/A 21 N/A N/A ( 17 )

Gain (loss) on fair value hedge relationships – cross-currency swap contracts:

Hedged item N/A 20 N/A N/A ( 30 ) N/A

Derivatives designated as hedging instruments N/A ( 20 ) N/A N/A 30 N/A

Gain (loss) on cash flow hedge relationships – interest rate contracts:

Amount of gain (loss) reclassified from AOCI into earnings (loss)

N/A N/A — N/A N/A —

Gain on cash flow hedge relationships – foreign currency forward contracts:

Amount of gain reclassified from AOCI into earnings (loss)

7 N/A N/A 15 N/A N/A

N/A (Not applicable)

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended March 31,

Three Months Ended September 30,

(In millions) Net Sales Selling, General and Administrative Interest

Expense Net Sales Selling, General and Administrative Interest

Total amounts of income and expense line items presented in the consolidated statements of earnings (loss) in which the effects of fair value and cash flow hedges are recorded $ 10,915 $ 7,141 $ 269 $ 11,737 $ 7,177 $ 287

Total amounts of income and expense line items presented in the accompanying consolidated statements of earnings (loss) in which the effects of fair value and cash flow hedges are recorded

$ 3,481 $ 2,296 $ 86 $ 3,361 $ 2,298 $ 92

The effects of fair value and cash flow hedging relationships:

5 unchanged sentences

Derivatives designated as hedging instruments N/A 12 N/A N/A ( 53 ) N/A

Gain (loss) on cash flow hedge relationships – interest rate contracts:

Amount of gain (loss) reclassified from AOCI into earnings (loss)

N/A N/A 1 N/A N/A ( 1 )

Gain on cash flow hedge relationships – foreign currency forward contracts:

Amount of gain reclassified from AOCI into earnings (loss)

Gain (loss) on cash flow hedge relationships – foreign currency forward contracts:

Amount of gain (loss) reclassified from AOCI

— N/A N/A 10 N/A N/A

5 unchanged sentences

Recognized in Earnings (Loss) on Derivatives

Location of Gain (Loss) Recognized in Earnings (Loss) on

Derivatives Three Months Ended

March 31, Nine Months Ended

Location of Gain (Loss) Recognized in Earnings (Loss) on Derivatives

Three Months Ended

September 30,

(In millions) 2025 2024

Derivatives Not Designated as Hedging Instruments:

Foreign currency forward contracts

Selling, general and administrative $ ( 6 ) $ 18 $ ( 25 ) $ 31

Foreign currency forward contracts Selling, general and administrative $ 16 $ ( 50 )

The Company's derivative instruments are subject to enforceable master netting agreements.

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The following table provides information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties:

As of March 31, 2025 As of June 30, 2024

As of September 30, 2025

As of June 30, 2025

(In millions) Gross Amounts of Assets / (Liabilities) Presented in Balance Sheet Contracts Subject to Netting Net Amounts of Assets / (Liabilities) Gross Amounts of Assets / (Liabilities) Presented in Balance Sheet Contracts Subject to Netting Net Amounts of Assets / (Liabilities)

Derivative Financial Contracts

Derivative Financial Instruments

Derivative assets $ 74 $ ( 30 ) $ 44 $ 82 $ ( 60 ) $ 22

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2025:

The following table presents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2025:

(In millions) Level 1 Level 2 Level 3 Total

17 unchanged sentences

Interest rate contracts

Cross-currency swap contracts

$ — $ 216 $ — $ 216

The estimated fair values of the Company’s financial instruments are as follows:

March 31, 2025 June 30, 2024

The estimated fair values of the Company’s financial instruments not measured at fair value on a recurring basis are as follows:

September 30, 2025 June 30, 2025

(In millions) Carrying

Value Carrying

Nonderivatives

Cash and cash equivalents

$ 2,631 $ 2,631 $ 3,395 $ 3,395

Current and long-term debt

2 unchanged sentences

$ 172 $ 174 $ 322 $ 323

Foreign currency forward contracts – asset (liability), net 6 6 47 47

Cross-currency swap contracts - asset (liability), net 60 60 80 80

Interest rate contracts – liability ( 118 ) ( 118 ) ( 145 ) ( 145 )

THE ESTÉE LAUDER COMPANIES INC.

16 unchanged sentences

The Company’s deferred consideration payable is classified within Level 2 of the valuation hierarchy.

Nonfinancial assets measured at fair value on a nonrecurring basis

In connection with its interim goodwill and other indefinite-lived intangible asset impairment testing, the Company has measured certain nonfinancial assets at fair value on a nonrecurring basis, classified as Level 3 of the fair value hierarchy.

Refer to Note 2 – Goodwill and Other Intangible Assets for discussion of the valuation techniques used to measure fair value, the description of the inputs and information used to develop those inputs.

NOTE 6 – REVENUE RECOGNITION

Disaggregation of net sales by the Company's geographic regions (1) are as follows:

Three Months Ended

September 30,

(In millions) 2025 2024

The Americas $ 1,174 $ 1,197

Europe, United Kingdom and Ireland and Emerging Markets ("EUKEM")

Asia/Pacific (2)

Mainland China

Returns associated with restructuring and other activities 1 —

Net sales $ 3,481 $ 3,361

(1) The Company has reorganized its geographic regions, effective July 1, 2025 and has presented the information for the three months ended September 30, 2025 and 2024 under this new basis.

(2) The net sales from the Company’s travel retail business are included in the Asia/Pacific region.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Receivable

Accounts receivable, net is stated net of the allowance for doubtful accounts, including credit losses, and customer deductions totaling $ 37 million and $ 26 million as of March 31, 2025 and June 30, 2024, respectively.

Accounts receivable, net is stated net of the allowance for doubtful accounts, including credit losses, and customer deductions totaling $ 39 million and $ 38 million as of September 30, 2025 and June 30, 2025, respectively.

Payment terms are short-term in nature and are generally less than one year.

Changes in the allowance for credit losses are as follows:

(In millions) March 31, 2025

(In millions) September 30, 2025

Balance at June 30, 2025 $ 26

1 unchanged sentence

Write-offs, net & other ( 1 )

Balance at March 31, 2025 $ 25

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The remaining balance of the allowance for doubtful accounts and customer deductions of $ 12 million as of March 31, 2025 and June 30, 2024 relates to non-credit losses, which are primarily due to customer deductions.

Balance at September 30, 2025 $ 27

The remaining balance of the allowance for doubtful accounts and customer deductions of $ 12 million as of September 30, 2025 and June 30, 2025, relates to non-credit losses, which are primarily due to customer deductions.

Deferred Revenue

Changes in deferred revenue during the period are as follows:

Changes in deferred revenue are as follows:

Three Months Ended

March 31, Nine Months Ended

September 30,

(In millions) 2025 2024

1 unchanged sentence

Revenue recognized that was included in the deferred revenue balance at the beginning of the period ( 127 ) ( 148 )

Revenue deferred (released) during the period ( 29 ) ( 38 ) 229 255

Other 1 ( 4 ) — ( 10 )

Revenue deferred during the period

Deferred revenue, end of period $ 548 $ 567

Transaction Price Allocated to the Remaining Performance Obligations

At March 31, 2025, the combined estimated revenue expected to be recognized in the next twelve months related to performance obligations for customer loyalty programs, gift with purchase promotions, purchase with purchase promotions, gift card liabilities and the Marcolin license arrangement related to TOM FORD that are unsatisfied (or partially unsatisfied) is $ 276 million.

The remaining balance of deferred revenue at March 31, 2025 will be recognized beyond the next twelve months, of which $ 214 million relates to the non-refundable upfront payment received as part of the Marcolin licensing arrangement that is being recognized on a straight-line basis over the estimated economic life of the license, which is 20 years.

At September 30, 2025, the combined estimated revenue expected to be recognized in the next twelve months related to performance obligations for customer loyalty programs, gift with purchase promotions, purchase with purchase promotions, gift card liabilities and the Marcolin license arrangement related to TOM FORD that are unsatisfied (or partially unsatisfied) is $ 332 million.

The remaining balance of deferred revenue at September 30, 2025 will be recognized beyond the next twelve months, of which $ 207 million relates to the non-refundable upfront payment received as part of the Marcolin licensing arrangement that is being recognized on a straight-line basis over the estimated economic life of the license, which is 20 years ending in fiscal 2043.

Royalty Revenue – License Arrangements

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Descriptions of these plans are included in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

The components of net periodic benefit cost for the three months ended March 31, 2025 and 2024 consisted of the following:

Pension Plans Other than

Pension Plans

International Post-retirement

(In millions) 2025 2024 2025 2024 2025 2024

Service cost $ 8 $ 9 $ 6 $ 7 $ 1 $ —

Interest cost 13 12 5 5 1 2

Expected return on plan assets ( 13 ) ( 14 ) ( 6 ) ( 7 ) — —

Amortization of:

Actuarial loss (gain)

5 1 ( 1 ) ( 2 ) — —

Prior service cost — — — ( 1 ) ( 1 ) ( 1 )

Special termination benefits — — 3 — — —

Net periodic benefit cost $ 13 $ 8 $ 7 $ 2 $ 1 $ 1

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of net periodic benefit cost for the nine months ended March 31, 2025 and 2024 consisted of the following:

The components of net periodic benefit cost for the three months ended September 30, 2025 and 2024 consisted of the following:

Pension Plans Other than

12 unchanged sentences

The amounts recognized in the consolidated balance sheets related to the Company’s pension and post-retirement benefit plans consist of the following:

(In millions) March 31, 2025 June 30, 2024

(In millions) September 30, 2025 June 30, 2025

Other assets $ 128 $ 128

7 unchanged sentences

The Company is involved, from time to time, in litigation and other legal proceedings incidental to its business, including product liability matters (including asbestos-related claims), advertising, regulatory, employment, intellectual property, real estate, environmental, trade relations, securities, tax, and privacy.

Management believes that the outcome of current litigation and legal proceedings will not have a material adverse effect upon the Company’s business, results of operations, financial condition or cash flows.

However, management’s assessment of the Company’s current litigation and other legal proceedings could change in light of the discovery of facts with respect to legal actions or other proceedings pending against the Company not presently known to the Company or determinations by judges, juries or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or proceedings.

The Company establishes accruals for loss contingencies when it has determined that a loss is probable and that the amount of loss, or range of loss, can be reasonably estimated.

3 unchanged sentences

Legal defense costs are recognized as incurred when the legal services are provided.

Reasonably possible losses in addition to the amounts accrued for such litigation and legal proceedings are not expected to be material to the Company’s consolidated financial statements (refer below for the Company’s Securities Class Action and Derivative Matters and Cosmetic Talcum Powder Matters and related assessment of these loss contingencies).

Refer below for the assessment of loss contingencies associated with the Company's Securities Class Action and Derivative Matters and Cosmetic Talcum Powder Matters.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Management believes that the outcome of all remaining current litigation and other legal proceedings will not have a material adverse effect upon the Company’s business, results of operations, financial condition or cash flows.

Reasonably possible losses in addition to the amounts accrued for the Company's remaining litigation and legal proceedings are not expected to be material to the Company’s consolidated financial statements.

However, management's assessment of the Company's current litigation and other legal proceedings, including the Securities Class Action and Derivative Matters and Cosmetic Talcum Powder Matters, could change in light of the discovery of facts with respect to legal actions or other proceedings pending against the Company not presently known to the Company or determinations by judges, juries or other finders of fact which are not in accord with management's evaluation of the possible liability or outcome of such litigation or proceedings.

Securities Class Action and Derivative Matters

4 unchanged sentences

Defendants intend to defend the action vigorously.

On February 1, 2024 and March 15, 2024, stockholder derivative action complaints were filed against certain of the Company’s officers, all the Company’s directors as of those dates and certain of the Company’s former directors as of those dates in the United States District Court for the Southern District of New York.

On February 1, 2024 and March 15, 2024, stockholder derivative action complaints were filed against certain of the Company’s officers as of those dates, all the Company’s directors as of those dates and certain of the Company’s former directors as of those dates in the United States District Court for the Southern District of New York.

In April 2024, both complaints were voluntarily dismissed without prejudice.

1 unchanged sentence

A committee of the Board has been formed to review the stockholder demands and make recommendations, as appropriate in its discretion, to the Board.

As of March 31, 2025, the Company does not believe it is probable that it will incur losses as a result of the securities class action and derivative matters, and cannot reasonably estimate the loss or range of losses that are reasonably possible to be incurred in connection with these matters.

In fiscal 2025, on May 8, 2025, two additional stockholder derivative action complaints were filed in the United States District Court for the Southern District of New York against certain of the Company’s current and former officers and directors alleging breach of fiduciary duty and unjust enrichment from the sale of stock by certain individual defendants during the time period surrounding the allegations of false and misleading statements in the purported securities class action described above.

Then, on June 23, 2025, another stockholder derivative action complaint was filed in the Supreme Court of the State of New York in Kings County against certain of the Company’s current and former officers and directors, also alleging breach of fiduciary duty and unjust enrichment as well as claims of waste, gross mismanagement and insider trading.

In fiscal 2026, on September 15 and September 26, 2025, two additional stockholder derivative action complaints were filed in Delaware Chancery Court against certain of the Company’s current and former officers and directors, also alleging breach of fiduciary duty and unjust enrichment as well as claims of waste, gross mismanagement and insider trading.

The Company believes that it is not possible at this time to reasonably assess the outcome of these matters or to estimate the loss or range of losses, if any, as the matters are in their early stages.

Cosmetic Talcum Powder Matters

1 unchanged sentence

Most of these actions involve a number of co-defendants from a variety of different industries.

As of March 31, 2025, there were 84 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 273 cases as of June 30, 2024.

During the nine months ended March 31, 2025, 57 new cases were filed and 246 cases were resolved by settlement or voluntary dismissal (including pursuant to the cases that were settled in the talcum litigation settlement agreements described below).

Due to the rising number of cases against the Company, as well as the evolving litigation landscape, there is an expectation that claims may increase in the future.

In order to mitigate our future exposure, from the end of August 2024 through October 2024, the Company reached agreements with certain plaintiff law firms (collectively, the “talcum litigation settlement agreements”) for:

(i) the resolution of over 200 pending cosmetic talcum powder matters handled by those firms as well as (ii) a process for resolving potential future cosmetic talcum powder claims expected to be brought on behalf of plaintiffs by those firms from January 1, 2025 through December 31, 2029, with annual capped amounts per year for each participating law firm.

To account for the talcum litigation settlement agreements, the Company recorded a charge of $ 159 million during the fiscal 2025 first quarter for the amount agreed to settle the current and potential future claims (amounts recorded for potential future claims is based on the best estimate of the probable loss and a reasonably possible loss beyond the amounts recorded is not expected to be material).

As of March 31, 2025, $ 23 million is recorded in Other accrued liabilities and $ 89 million is recorded in Other noncurrent liabilities in the accompanying consolidated balance sheet related to the talcum litigation settlement agreements.

As of September 30, 2025, there were 91 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 84 cases as of June 30, 2025.

During the three months ended September 30, 2025, 15 new cases were filed and 8 cases were resolved by settlement or voluntary dismissal.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In view of the number of cases pending against the Company at June 30, 2024, as well as the evolution of the litigation landscape and expectations regarding future claims at that time, the Company took action from the end of August 2024 through October 2024 to mitigate its future exposure.

During that period, the Company reached agreements with certain plaintiff law firms (collectively, the “talcum litigation settlement agreements”) for:

To account for the talcum litigation settlement agreements, the Company recorded a charge of $ 159 million during the fiscal 2025 first quarter for the amount agreed to settle the current and potential future claims (amounts recorded for potential future claims were based on the best estimate of the probable loss at that time, and actual additional charges and any further reasonably possible losses beyond the amounts recorded during the three months ended September 30, 2024 has not been and is not expected to be material).

As of September 30, 2025, $ 28 million is recorded in Other accrued liabilities and $ 85 million is recorded in Other noncurrent liabilities in the accompanying consolidated balance sheet related to the talcum litigation settlement agreements.

There are and could be other plaintiff law firms outside of those included in the talcum litigation settlement agreements that bring claims against the Company.

The value of other settlements outside of the talcum litigation settlement agreements, either individually or in the aggregate, for the three and nine months ended March 31, 2025 and 2024 was not material.

Given the inherent uncertainties of litigation, it is not possible to predict the outcome of all individual cases pending against the Company or potential unasserted claims, and therefore a specific estimate and associated provision is made for a small number of individual cases that have advanced to the later stages of legal proceedings.

For the remaining filed cases, we record an estimate of exposure loss on an aggregated and ongoing basis, which takes into account the historical outcomes of cases we have resolved to date.

The value of other settlements outside of the talcum litigation settlement agreements, either individually or in the aggregate, for the three months ended September 30, 2025 and 2024 was not material.

Given the inherent uncertainties of litigation, it is not possible to predict the outcome of all individual cases pending against the Company or potential unasserted claims, and therefore a specific estimate and associated provision is made, as needed, for a small number of individual cases that have advanced to the later stages of legal proceedings.

For the remaining filed cases, the Company records an estimate of exposure loss on an aggregated and ongoing basis, which takes into account the historical outcomes of cases the Company has resolved to date.

Any adverse outcomes, either in an individual case or in the aggregate, could be material.

While the Company and its legal counsel intend to continue to defend these cases vigorously, there can be no assurances regarding the ultimate resolution of these matters.

The amounts recorded during the three and nine months ended March 31, 2025 for such litigation, outside of the talcum litigation settlement agreements, are not material to the Company's consolidated financial statements.

The range of reasonably possible losses in excess of accrued liabilities currently cannot be reasonably estimated.

The amounts recorded during the three months ended September 30, 2025 and 2024 for such litigation, outside of the talcum litigation settlement agreements, are not material to the Company's consolidated financial statements.

The range of reasonably possible losses in excess of accrued liabilities currently cannot be reasonably estimated for cosmetic talcum matters, outside of the talcum litigation settlement agreements.

The Company believes that a portion of its costs incurred in defending and resolving these claims may be covered by insurance policies issued by several insurance carriers, subject to deductibles, exclusions, retentions and policy limits.

Amounts received to date have not been material.

NOTE 9 – STOCK PROGRAMS

1 unchanged sentence

Total net stock-based compensation expense is attributable to the granting of, and the remaining requisite service periods of stock options, restricted stock units (“RSUs”), performance share units (“PSUs”), long-term PSUs, including long-term price-vested units and share units.

Compensation expense attributable to net stock-based compensation was $ 75 million and $ 87 million for the three months ended March 31, 2025 and 2024, respectively, and was $ 255 million and $ 276 million for the nine months ended March 31, 2025 and 2024, respectively.

Compensation expense attributable to net stock-based compensation was $ 88 million and $ 74 million for the three months ended September 30, 2025 and 2024, respectively.

Stock Options

During the nine months ended March 31, 2025, the Company granted stock options in respect of approximately 0.9 million shares of Class A Common Stock with a weighted average exercise price per share of $ 90.93 and a weighted average grant date fair value per share of $ 29.24 .

During the three months ended September 30, 2025, the Company granted stock options in respect of approximately 1.1 million shares of Class A Common Stock with a weighted average exercise price per share of $ 91.77 and a weighted average grant date fair value per share of $ 34.80 .

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model.

Restricted Stock Units

During the nine months ended March 31, 2025, the Company granted RSUs in respect of approximately 3.4 million shares of Class A Common Stock with a weighted average grant date fair value per share of $ 91.82 that, at the time of grant, are scheduled to vest at 1.2 million, 1.2 million, and 1.0 million shares per year, in fiscal 2026, fiscal 2027 and fiscal 2028, respectively.

During the three months ended September 30, 2025, the Company granted RSUs in respect of approximately 3.5 million shares of Class A Common Stock with a weighted average grant date fair value per share of $ 91.66 that, at the time of grant, are scheduled to vest at 1.2 million, 1.5 million, and 0.8 million shares per year, in fiscal 2027, fiscal 2028 and fiscal 2029, respectively.

Vesting of RSUs is generally subject to the continued employment or the retirement of the grantees.

The RSUs are generally accompanied by dividend equivalent rights, payable upon settlement of the RSUs either in cash or shares (based on the terms of the particular award) and, as such, were generally valued at the closing market price of the Company’s Class A Common Stock on the date of grant.

Performance Share Units

During the nine months ended March 31, 2025, the Company granted PSUs with a target payout of approximately 0.4 million shares of Class A Common Stock with a grant date fair value per share of $ 92.02 , which will be settled in stock subject to the achievement of the Company’s net sales, diluted net earnings per common share and return on invested capital goals for the three fiscal years ending June 30, 2027, all subject to continued employment or the retirement of the grantees.

For PSUs granted, no settlement will occur for results below the applicable minimum threshold.

PSUs are accompanied by dividend equivalent rights that will be payable in cash upon settlement of the PSUs and, as such, were valued at the closing market value of the Company’s Class A Common Stock on the date of grant.

For the PSUs with a performance period ended June 30, 2024, the target goals set at the time of issuance were not achieved, resulting in no shares of the Company’s Class A Common Stock issued related to these awards.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Included in the above are one-time grants in respect of approximately 0.5 million shares of Class A Common Stock scheduled to cliff vest in fiscal 2028 with a weighted average grant-date fair value per share of $ 91.77 made under the Profit Recovery and Growth Plan Incentive Program which was implemented in an effort to incentivize and retain leaders who are critical to the success of the PRGP.

Performance Share Units

For the PSUs granted in fiscal 2023 with a performance period ended June 30, 2025, the target goals set at the time of issuance were not achieved, resulting in no shares of the Company’s Class A Common Stock issued related to these awards.

Long-term Performance Share Units

On September 3, 2024, the Company issued 195,940 shares of the Company’s Class A Common Stock to its then Chief Executive Officer in accordance with the terms of PSUs granted in February 2018.

At the time of issuance, the total fair value of PSUs was $ 18 million.

NOTE 10 – NET EARNINGS (LOSS) ATTRIBUTABLE TO THE ESTÉE LAUDER COMPANIES INC.

PER COMMON SHARE

Net earnings (loss) attributable to The Estée Lauder Companies Inc.

per common share (“basic EPS”) is computed by dividing net earnings (loss) attributable to The Estée Lauder Companies Inc.

by the weighted average number of common shares outstanding and shares underlying PSUs and RSUs where the vesting conditions have been met.

Net earnings (loss) attributable to The Estée Lauder Companies Inc.

per common share assuming dilution (“diluted EPS”) is computed by reflecting potential dilution from stock-based awards using the treasury stock method.

For the nine months ended March 31, 2025, the effects of potentially dilutive stock options, PSUs and RSUs were excluded from the computation of diluted EPS as they were anti-dilutive due to the net loss incurred during the period.

On September 2, 2025, the Company issued 68,578 shares of the Company’s Class A Common Stock to its former Chief Executive Officer in accordance with the terms of PSUs granted in March 2021.

The total fair value of PSUs at the time of issuance was $ 6.2 million.

On September 3, 2024, the Company issued 195,940 shares of the Company’s Class A Common Stock to its former Chief Executive Officer in accordance with the terms of PSUs granted in February 2018.

The total fair value of PSUs at the time of issuance was $ 18 million.

Long-term Price-Vested Units

On September 2, 2025, the Company issued 85,927 shares of the Company’s Class A Common Stock to its former Chief Executive Officer in accordance with the terms of price-vested unit awards ("PVUs") granted in March 2021.

The total fair value of PVUs at the time of issuance was $ 7.7 million.

NOTE 10 – NET EARNINGS (LOSS) PER COMMON SHARE

Net earnings (loss) per common share (“basic EPS”) is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding and shares underlying PSUs and RSUs where the vesting conditions have been met.

Net earnings (loss) per common share assuming dilution (“diluted EPS”) is computed by reflecting potential dilution from stock-based awards using the treasury stock method.

For the three months ended September 30, 2024, the effects of potentially dilutive stock options, PSUs and RSUs were excluded from the computation of diluted EPS as they were anti-dilutive due to the net loss incurred during the period.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation between the numerator and denominator of the basic and diluted EPS computations is as follows:

Three Months Ended

March 31, Nine Months Ended

September 30,

(In millions, except per share data) 2025 2024

Net earnings (loss) attributable to The Estée Lauder Companies Inc.

Net earnings (loss)

$ 47 $ ( 156 )

Weighted average common shares outstanding – Basic

360.3 359.1 359.9 358.8

Effect of dilutive stock options

Effect of PSUs

0.2 0.2 — 0.1

Effect of RSUs

0.9 0.7 — 0.6

Weighted average common shares outstanding – Diluted

361.4 360.8 359.9 360.4

Net earnings (loss) attributable to The Estée Lauder Companies Inc.

per common share:

Net earnings (loss) per common share:

$ .13 $ ( .43 )

2 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

September 30,

(In millions) 2025 2024

Stock options

8.9 5.8 8.4 5.7

RSUs and PSUs

0.2 0.1 1.8 0.5

As of March 31, 2025 and 2024, 0.6 million and 0.4 million shares, respectively, of Class A Common Stock underlying PSUs have been excluded from the computation of diluted EPS as the number of shares ultimately issued is contingent on the achievement of applicable performance targets of the Company, as discussed in Note 9 – Stock Programs .

As of September 30, 2025 and 2024, 0.5 million and 0.6 million shares, respectively, of Class A Common Stock underlying PSUs have been excluded from the computation of diluted EPS as the number of shares ultimately issued is contingent on the achievement of applicable performance targets of the Company, as discussed in Note 19 – Stock Programs in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – EQUITY AND REDEEMABLE NONCONTROLLING INTEREST

Total Stockholders’ Equity – The Estée Lauder Companies Inc.

NOTE 11 – EQUITY

Total Stockholders’ Equity

Three Months Ended

March 31, Nine Months Ended

September 30,

(In millions, except per share data)

2025 2024 2025 2024

Common stock, beginning of the period $ 6 $ 6

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Common stock dividends ( 128 ) ( 240 )

Net earnings (loss) attributable to The Estée Lauder Companies Inc.

159 330 ( 587 ) 674

Net earnings (loss)

Retained earnings, end of the period 11,591 13,031

Accumulated other comprehensive loss, beginning of the period ( 1,127 ) ( 1,140 )

Other comprehensive earnings (loss) attributable to The Estée Lauder Companies Inc.

68 ( 158 ) ( 133 ) ( 80 )

Other comprehensive (loss) earnings

Accumulated other comprehensive loss, end of the period ( 1,141 ) ( 1,057 )

3 unchanged sentences

$ 3,890 $ 5,084

Redeemable noncontrolling interest, beginning of the period $ — $ 850 $ — $ 832

Net earnings attributable to redeemable noncontrolling interest

Translation adjustments — ( 15 ) — ( 13 )

Redeemable noncontrolling interest, end of the period $ — $ 840 $ — $ 840

Cash dividends declared per common share $ .35 $ .66

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of quarterly cash dividends declared per share on the Company’s Class A and Class B Common Stock during the nine months ended March 31, 2025:

The following is a summary of quarterly cash dividends declared per share on the Company’s Class A and Class B Common Stock during the three months ended September 30, 2025:

Date Declared Record Date Payable Date Amount per Share

August 16, 2024 August 30, 2024 September 16, 2024 $ .66

October 30, 2024 November 29, 2024 December 16, 2024 $ .35

February 3, 2025 February 28, 2025 March 17, 2025 $ .35

On April 30, 2025, a dividend was declared in the amount of $ .35 per share on the Company’s Class A and Class B Common Stock.

The dividend is payable in cash on June 16, 2025 to stockholders of record at the close of business on May 30, 2025.

August 19, 2025 September 2, 2025 September 16, 2025 $ .35

On October 29, 2025, a dividend was declared in the amount of $ .35 per share on the Company’s Class A and Class B Common Stock.

The dividend is payable in cash on December 15, 2025 to stockholders of record at the close of business on November 28, 2025.

Beginning in December 2022, the Company suspended the repurchase of shares of its Class A Common Stock under its publicly announced program.

1 unchanged sentence

Accumulated Other Comprehensive Loss

The following table represents changes in accumulated other comprehensive loss, net of tax, by component for the nine months ended March 31, 2025:

The following table represents changes in accumulated other comprehensive loss, net of tax, by component for the three months ended September 30, 2025:

(In millions) Net Cash

Gain (Loss) Cross-Currency Swap Contracts - Fair Value Hedge (2)

Gain (Loss) Cross-Currency Swap Contracts - Fair Value Hedge Gain (2)

Included in Net Periodic Benefit Cost Translation

3 unchanged sentences

13 6 — ( 32 ) (1)

Amounts reclassified to Net loss ( 25 ) ( 11 ) 6 — ( 30 )

Amounts reclassified to Net earnings

— ( 4 ) 3 — ( 1 )

Net current-period OCI 13 2 3 ( 32 ) ( 14 )

Balance at March 31, 2025 $ 37 $ 6 $ ( 177 ) $ ( 1,139 ) $ ( 1,273 )

Balance at September 30, 2025 $ 2 $ 8 $ ( 201 ) $ ( 950 ) $ ( 1,141 )

(1) See Note 4 – Derivative Financial Instruments for gains (losses) relating to net investment hedges.

(2) The gain recognized in AOCI, net of tax from cross-currency swap contracts represents the amount excluded from effectiveness testing.

(3) The tax provision (benefit) included in Net Cash Flow Hedge Gain (Loss), Cross-Currency Swap Contracts - Fair Value Hedge and Translation Adjustments are $ 1 million, $ 6 million, and $( 3 ) million, respectively.

(3) The tax provision included in Net Cash Flow Hedge Gain (Loss), Cross-Currency Swap Contracts - Fair Value Hedge Gain and Translation Adjustments are $ 3 million, $ 2 million, and $ 5 million, respectively.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table represents the effects of reclassification adjustments from AOCI into net earnings (loss) for the three and nine months ended March 31, 2025 and 2024:

The following table represents the effects of reclassification adjustments from AOCI into net earnings (loss) for the three months ended September 30, 2025 and 2024:

Amount Reclassified from AOCI Affected Line Item in

1 unchanged sentence

Three Months Ended

March 31, Nine Months Ended

September 30,

(In millions) 2025 2024

Gain on Cash Flow Hedges

Gain (Loss) on Cash Flow Hedges

Foreign currency forward contracts $ — $ 10 Net sales

Interest rate contracts

— — 1 ( 1 ) Interest expense

Total gain on cash flow hedges, before tax 7 15 32 35

Provision for income taxes ( 1 ) ( 5 ) ( 7 ) ( 9 ) Provision (benefit) for income taxes

Total gain on cash flow hedges, net of tax 6 10 25 26 Net earnings (loss)

Cross-Currency Swap Contracts - Fair Value Hedge

Gain on cross-currency swap contracts, before tax 5 5 14 14 Selling, general and administrative

Provision for income taxes ( 1 ) ( 1 ) ( 3 ) ( 3 ) Provision (benefit) for income taxes

Total gain on cross-currency swap contracts - fair value hedge, net of tax 4 4 11 11 Net earnings (loss)

Provision for income taxes

— ( 3 ) Provision (benefit) for income taxes

Total gain on cash flow hedges, net of tax

— 7 Net earnings (loss)

Gain on Cross-Currency Swap Contracts - Fair Value Hedge

Cross-currency swap contracts

5 4 Selling, general and administrative

Provision for income taxes

( 1 ) ( 1 ) Provision (benefit) for income taxes

Total gain on cross-currency swap contracts - fair value hedge, net of tax

4 3 Net earnings (loss)

Retirement Plan and Other Retiree Benefit Adjustments

Amortization of prior service cost 1 2 Other components of net periodic benefit cost

Amortization of actuarial gain (loss) ( 4 ) 1 ( 11 ) 3 Other components of net periodic benefit cost

Amortization of actuarial loss

( 5 ) ( 4 ) Other components of net periodic benefit cost

Total retirement plan and other retiree benefit adjustments, before tax

( 3 ) 3 ( 7 ) 5

Benefit (provision) for income taxes

( 4 ) ( 2 ) Other components of net periodic benefit cost

Benefit for income taxes

1 — Provision (benefit) for income taxes

1 unchanged sentence

( 3 ) ( 2 ) Net earnings (loss)

Total reclassification adjustments, net of tax

$ 7 $ 16 $ 30 $ 40 Net earnings (loss)

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total reclassification adjustments, net $ 1 $ 8 Net earnings (loss)

NOTE 12 – STATEMENT OF CASH FLOWS

Supplemental cash flow information for the nine months ended March 31, 2025 and 2024 is as follows:

Supplemental cash flow information for the three months ended September 30, 2025 and 2024 is as follows:

(In millions) 2025 2024

4 unchanged sentences

Right-of-use assets obtained in exchange for new/modified operating lease liabilities $ 53 $ 210

NOTE 13 – SEGMENT DATA AND RELATED INFORMATION

Reportable operating segments include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the “Chief Executive”) in deciding how to allocate resources and in assessing performance.

Although the Company operates in one business segment, beauty products, management also evaluates performance on a product category basis.

Product category performance is measured based upon net sales before returns associated with restructuring and other activities, and operating income (loss) before charges associated with restructuring and other activities.

Returns and charges associated with restructuring and other activities are not allocated to the Company's product categories or geographic regions because they are centrally directed and controlled, are not included in internal measures of product category or geographic region performance, and result from activities that are deemed Company-wide initiatives to redesign, resize and reorganize select areas of the business.

The accounting policies for the Company’s reportable segments are substantially the same as those for the consolidated financial statements, as described in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements;

thus, no additional information is produced for the Chief Executive or included herein.

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

March 31, Nine Months Ended

NOTE 13 – SEGMENT DATA AND RELATED INFORMATION

Operating segments include components of an enterprise for which separate financial information is available that are regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Although the Company operates in one business segment, beauty products, the chief operating decision maker evaluates performance based on its four major product categories:

skin care, makeup, fragrance and hair care.

These product categories meet the definition of operating and reportable segments and, accordingly, additional financial data is provided below.

Royalty revenue associated with the license of the TOM FORD trademark as well as sales and related results of ancillary products and services that do not fit within the Company's definitions of skin care, makeup, fragrance and hair care are included in the other category.

Segment net sales and operating income is before the impacts of restructuring and other activities and the impacts from the other category described above.

Returns and charges associated with restructuring and other activities are not allocated to the Company's segments because they are centrally directed and controlled, are not included in internal measures of segment performance and result from activities that are deemed Company-wide initiatives to redesign, resize and reorganize select areas of the business.

The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements;

thus, no additional information is produced for the chief operating decision maker or included herein.

Information about the Company's four operating segments is as follows:

(In millions)

PRODUCT CATEGORY DATA

Skin Care $ 1,807 $ 2,060 $ 5,257 $ 5,873

Makeup 1,035 1,136 3,223 3,365

Fragrance 557 575 1,931 1,948

Hair Care 126 143 424 464

Other 25 26 80 88

3,550 3,940 10,915 11,738

Three Months Ended

September 30, 2025

Skin Care Makeup Fragrance Hair Care Total

Other category net sales

Returns associated with restructuring and other activities

Net sales $ 3,550 $ 3,940 $ 10,915 $ 11,737

Operating income (loss) before charges associated with restructuring and other activities:

Skin Care $ 361 $ 468 $ 784 $ 920

Makeup 14 66 ( 382 ) 56

Fragrance 32 29 ( 354 ) 267

Hair Care ( 13 ) ( 25 ) ( 34 ) ( 50 )

Other 9 11 ( 25 ) 38

Segment net sales

$ 1,575 $ 1,030 $ 721 $ 129 $ 3,455

Reconciliation:

Cost of sales 419 280 180 36 915

Selling, general and administrative expenses 969 765 455 105 2,294

Segment operating income (loss) $ 187 $ ( 15 ) $ 86 $ ( 12 ) $ 246

Other category operating income

Charges associated with restructuring and other activities

Operating income

Reconciliation to earnings before income taxes:

Interest expense ( 86 )

1 unchanged sentence

Other components of net periodic benefit cost ( 4 )

Earnings (loss) before income taxes $ 241 $ 486 $ ( 589 ) $ 1,051

GEOGRAPHIC DATA (1)

The Americas $ 1,052 $ 1,117 $ 3,462 $ 3,567

Europe, the Middle East & Africa 1,358 1,647 4,082 4,488

Asia/Pacific 1,140 1,176 3,371 3,683

Earnings before income taxes

Segment depreciation and amortization

$ 90 $ 59 $ 41 $ 8 $ 198

Other category

Depreciation and amortization $ 200

THE ESTÉE LAUDER COMPANIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions)

Three Months Ended

September 30, 2024

Skin Care Makeup Fragrance Hair Care Total

Other category net sales

Returns associated with restructuring and other activities

Net sales $ 3,550 $ 3,940 $ 10,915 $ 11,737

Operating income (loss):

The Americas $ 8 $ ( 6 ) $ ( 983 ) $ ( 243 )

Europe, the Middle East & Africa 239 302 645 825

Asia/Pacific 156 253 327 649

Segment net sales

$ 1,529 $ 1,038 $ 630 $ 139 $ 3,336

Cost of sales 424 295 149 40 908

Selling, general and administrative expenses 988 769 421 117 2,295

Other segment items (1)

— 159 — — 159

Segment operating income (loss)

$ 117 $ ( 185 ) $ 60 $ ( 18 ) $ ( 26 )

Other category operating income

Charges associated with restructuring and other activities

Operating income (loss) $ 306 $ 531 $ ( 395 ) $ 1,203

(1) The net sales from the Company's travel retail business are included in the Europe, the Middle East & Africa region, and operating income attributable to these net sales are included in that region and in The Americas.

The exception is for net sales and operating income of Dr.Jart+ in the travel retail channel in Korea that are reflected in Korea in the Asia/Pacific region.

During the fiscal 2025 second quarter, the Company exited Dr.Jart+ from the travel retail channel in Korea.

Operating loss

Reconciliation to loss before income taxes:

Interest expense ( 92 )

Interest income and investment income, net 35

Other components of net periodic benefit cost ( 2 )

Loss before income taxes

Segment depreciation and amortization

$ 95 $ 64 $ 39 $ 9 $ 207

Other category

Depreciation and amortization $ 208

(1) Other segment items include Talcum litigation settlement agreements

THE ESTÉE LAUDER COMPANIES INC.

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-Q

Item 1. Financial Statements