\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n % Change<\/b><\/p>\n<\/td>\n | \n %
\n
Change,
\n
Constant
\n
Currency<\/b><\/p>\n<\/td>\n | \n % Change<\/b><\/p>\n<\/td>\n | \n %
\n
Change,
\n
Constant
\n
Currency<\/b><\/p>\n<\/td>\n | \n 2021<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2020(2)<\/sup><\/b><\/p>\n<\/td>\n| \n \n\u00a0\n<\/p>\n<\/td>\n | | <\/tr>\n\n| \n As Reported Results (1)<\/sup><\/b><\/p>\n<\/td>\n| \n 16<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n 13<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n 100<\/b><\/p>\n<\/td>\n | \n +%<\/b><\/p>\n<\/td>\n | \n 100<\/b><\/p>\n<\/td>\n | \n +%<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 1.24<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n (.02<\/b><\/p>\n<\/td>\n | \n )<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nRestructuring and other charges\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n.31\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n.05\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nChanges in fair value of contingent consideration\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(.01\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGoodwill, other intangible and long-lived asset impairments\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n.07\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n.83\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Non-GAAP<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 13<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n 92<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 1.62<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n .85<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nImpact of foreign currency on earnings per share\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(.03\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Non-GAAP, constant currency earnings per share<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 88<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 1.59<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n (1)<\/sup>Represents GAAP, except Constant Currency percentages<\/i><\/p>\n<\/td>\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n (2)<\/sup>For the three months ended March 31, 2020 the effects of potentially dilutive stock options, performance share units, and restricted stock units of approximately 5.9 million, were excluded from the computation of As Reported and adjustments to Non-GAAP diluted loss per share as they were anti-dilutive due to the net loss during the period. These shares were added to the weighted-average common shares outstanding to calculate Non-GAAP diluted earnings per common share. <\/i><\/p>\n<\/td>\n<\/tr>\n\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n<\/table>\n \nThe fluctuations in exchange rates between the U.S. dollar in relation to most currencies had a favorable impact on net sales and operating income in the Company\u2019s product categories and regions outside of the United States.\n<\/p>\n \n\n| \n Results by Product Category<\/b><\/p>\n (Unaudited)<\/b><\/p>\n<\/td>\n | | <\/tr>\n \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | <\/tr>\n \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n Three Months Ended March 31<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n Net Sales<\/b><\/p>\n<\/td>\n | \n Percentage Change<\/b><\/p>\n<\/td>\n | \n Operating
\n
Income (Loss)<\/b><\/p>\n<\/td>\n | \n Percentage
\n
Change<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n ($ in millions)<\/i><\/p>\n<\/td>\n | \n 2021<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n Reported
\n
Basis<\/b><\/p>\n<\/td>\n | \n Constant
\n
Currency<\/b><\/p>\n<\/td>\n | \n 2021<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n Reported
\n
Basis<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nSkin Care\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n2,259\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n1,723\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n31\n<\/p>\n<\/td>\n | \n \n%\n<\/p>\n<\/td>\n | \n \n28\n<\/p>\n<\/td>\n | \n \n%\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n804\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n418\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n92\n<\/p>\n<\/td>\n | \n \n%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nMakeup\n<\/p>\n<\/td>\n | \n \n1,018\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n1,146\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(11\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n(13\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n(72\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(283\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n75\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nFragrance\n<\/p>\n<\/td>\n | \n \n454\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n349\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n30\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n27\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n47\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nHair Care\n<\/p>\n<\/td>\n | \n \n128\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n119\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n8\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n6\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(17\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(2\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(100\n<\/p>\n<\/td>\n | \n \n+)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nOther\n<\/p>\n<\/td>\n | \n \n15\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n8\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n88\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n88\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(1\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n1\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(100\n<\/p>\n<\/td>\n | \n \n+)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Subtotal<\/b><\/p>\n<\/td>\n | \n 3,874<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 3,345<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 16<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 13<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 761<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 134<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 100<\/b><\/p>\n<\/td>\n | \n +%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nReturns\/charges associated with restructuring and other activities\n<\/p>\n<\/td>\n | \n \n(10\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(145\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(25\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | <\/tr>\n \n| \n Total<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 3,864<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 3,345<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 16<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n 13<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 616<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 109<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 100<\/b><\/p>\n<\/td>\n | \n +%<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nTotal reported operating income was $616 million, an increase from $109 million in the prior-year period. Operating income increased 64%, largely reflecting higher net sales and excluding the following items:\n<\/p>\n \n- \nThird quarter of fiscal 2021: $33 million of asset impairments related to some of the Company\u2019s freestanding stores and $145 million of restructuring and other charges.\n<\/li>\n
- \nThird quarter of fiscal 2020: $333 million of goodwill and other intangible asset impairments related to Too Faced, GLAMGLOW, BECCA and Smashbox; $13 million of asset impairments related to some of the Company\u2019s freestanding stores; and $23 million of restructuring and other charges and adjustments.\n<\/li>\n
- \nThe favorable impact of currency translation of $5 million.\n<\/li>\n<\/ul>\n
Skin Care<\/span><\/b><\/p>\n\n- \nSkin care net sales grew strongly, led by Est\u00e9e Lauder, La Mer and Clinique. Dr. Jart+ and Origins also contributed to growth.\n<\/li>\n
- \nEst\u00e9e Lauder net sales grew double digits, led by increases in travel retail and in mainland China compared to the prior year where brick-and-mortar began to shut down in January 2020 due to COVID-19. Net sales growth was primarily driven by Advanced Night Repair Synchronized Multi-Recovery Complex and strong demand for high-loyalty hero products in the Revitalizing Supreme+, Daywear and Re-Nutriv franchises.\n<\/li>\n
- \nLa Mer delivered strong double-digit growth, led by Asia\/Pacific, with significant gains in mainland China. The brand grew in both Europe, the Middle East & Africa and The Americas regions as well. La Mer\u2019s growth was primarily driven by strong demand for its hero products, including Cr\u00e8me de la Mer, The Concentrate and The Treatment Lotion. Targeted expanded consumer reach also contributed to growth.\n<\/li>\n
- \nClinique delivered double-digit growth in every region driven by strong demand for its hero products, including the Dramatically Different and Clinique Smart franchises as well as Even Better Clinical Radical Dark Spot Corrector + Interrupter. The launch of Moisture Surge 100H Auto-Replenishing Hydrator and the iconic 3-Step skin care system also contributed to growth.\n<\/li>\n
- \nDr. Jart+ net sales increased primarily due to growth in mainland China and travel retail in Korea. Targeted expanded consumer reach also contributed to growth.\n<\/li>\n
- \nOrigins net sales growth reflected the continued success of Dr. Andrew Weil for ORIGINS Mega-Mushroom Relief & Resilience Soothing Treatment Lotion and the launch of Plantscription Multi-Powered Youth Serum.\n<\/li>\n
- \nSkin care operating income increased, primarily from higher net sales at Est\u00e9e Lauder, La Mer and Clinique. Additionally, the prior year period was adversely impacted by goodwill and other intangible asset impairments related to GLAMGLOW.\n<\/li>\n<\/ul>\n
Makeup<\/span><\/b><\/p>\n\n- \nNet sales in makeup declined across nearly all brands. The effects of the COVID-19 pandemic continued to disproportionately impact makeup usage, particularly foundation and lip, in most markets. Makeup sales rose slightly in Asia\/Pacific, reflecting the more advanced recovery in the region, primarily in China where usage occasions are increasing.\n<\/li>\n
- \nMakeup operating income improved, primarily reflecting impairments of several brands in the prior-year period.\n<\/li>\n<\/ul>\n
Fragrance<\/span><\/b><\/p>\n\n- \nNet sales grew, primarily due to increases from Jo Malone London, Tom Ford Beauty, Kilian Paris and Est\u00e9e Lauder.\n<\/li>\n
- \nJo Malone London\u2019s net sales grew double digits with increases in every region. Growth primarily reflected strong holiday activations around Chinese New Year and Valentine\u2019s Day and the success of new product launches, including the new Blossoms Collection and Scarlet Poppy Cologne Intense. Strong online sales more than offset the decline in brick-and-mortar stores.\n<\/li>\n
- \nTom Ford Beauty delivered double-digit growth, reflecting the continued success of Bitter Peach and Rose Prick Private Blend fragrances as well as hero products, including Oud Wood and Black Orchid.\n<\/li>\n
- \nNet sales from Kilian Paris rose double digits driven by demand for hero products and the successful launch of The Liquors franchise, including Angels\u2019 Share. Targeted expanded consumer reach also contributed to growth.\n<\/li>\n
- \nEst\u00e9e Lauder net sales growth was driven by the launch of Beautiful Magnolia.\n<\/li>\n
- \nFragrance operating income increased, driven by higher net sales.\n<\/li>\n<\/ul>\n
Hair Care<\/span><\/b><\/p>\n\n- \nHair care net sales rose, primarily reflecting successful innovation, including Botanical Repair, as well as strong double-digit online growth at Aveda.\n<\/li>\n
- \nHair care operating income reflected higher results from Aveda, which were more than offset by the return of incentive compensation to pre-COVID-19 pandemic levels.\n<\/li>\n<\/ul>\n
\n\n| \n Results by Geographic Region<\/b><\/p>\n (Unaudited)<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n Three Months Ended March 31<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n Net Sales<\/b><\/p>\n<\/td>\n | \n Percentage Change<\/b><\/p>\n<\/td>\n | \n Operating
\n
Income (Loss)<\/b><\/p>\n<\/td>\n | \n Percentage
\n
Change<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n ($ in millions)<\/i><\/p>\n<\/td>\n | \n 2021<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n Reported
\n
Basis<\/b><\/p>\n<\/td>\n | \n Constant
\n
Currency<\/b><\/p>\n<\/td>\n | \n 2021<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n Reported
\n
Basis<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nThe Americas\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n916\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n892\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n3\n<\/p>\n<\/td>\n | \n \n%\n<\/p>\n<\/td>\n | \n \n4\n<\/p>\n<\/td>\n | \n \n%\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n155\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n(217\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n100\n<\/p>\n<\/td>\n | \n \n+%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nEurope, the Middle East & Africa\n<\/p>\n<\/td>\n | \n \n1,706\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n1,525\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n12\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n10\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n361\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n202\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n79\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n \nAsia\/Pacific\n<\/p>\n<\/td>\n | \n \n1,252\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n928\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n35\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n26\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n245\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n149\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n64\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n Subtotal<\/b><\/p>\n<\/td>\n | \n 3,874<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 3,345<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 16<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 13<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 761<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 134<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 100<\/b><\/p>\n<\/td>\n | \n +%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nReturns\/charges associated with restructuring and other activities\n<\/p>\n<\/td>\n | \n \n(10\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(145\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(25\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n Total<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 3,864<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 3,345<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 16<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n 13 <\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 616<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 109<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 100<\/b><\/p>\n<\/td>\n | \n +%<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n The Americas<\/span><\/b><\/p>\n\n- \nNet sales increased in the region reflecting growth in North America compared to the prior year where brick-and-mortar began to shut down in March 2020 due to COVID-19. This was somewhat offset by declines in Latin America where many retail locations closed as the resurgence of COVID-19 led to increased government restrictions during the quarter.\n<\/li>\n
- \nOnline1<\/sup> sales grew double digits in The Americas.\n<\/li>\n
- \nThe Company and many retailers continued to capture consumer demand online utilizing new and existing digital capabilities, which more than offset declines from soft traffic in brick-and-mortar doors.\n<\/li>\n
- \nIn North America, net sales growth was driven by double-digit growth in the fragrance category and growth in skin care.\n<\/li>\n
- \nMakeup sales continued to be challenged by soft demand.\n<\/li>\n
- \nOperating income in The Americas increased, primarily reflecting the year-over-year reduction of goodwill, other intangible and long-lived asset impairments.\n<\/li>\n<\/ul>\n
1<\/sup>The regional online sales discussed throughout includes sales of the Company\u2019s products from its websites and third-party platforms, as well as estimated sales of the Company\u2019s products sold through its retailers\u2019 websites.<\/i><\/b><\/p>\nEurope, the Middle East & Africa<\/span><\/b><\/p>\n\n- \nNet sales returned to growth in the region, led by travel retail and online. Russia also contributed to growth.\n<\/li>\n
- \nNet sales from the Company\u2019s global travel retail business2<\/sup> increased year-over-year despite the absence of international passenger traffic in Europe, the Middle East & Africa and The Americas. This was more than offset by China domestic travel, especially in Hainan, and sales in the rest of Asia\/Pacific, including Korea.\n<\/li>\n
- \nOnline sales doubled, reflecting the increased focus on reaching consumers digitally.\n<\/li>\n
- \nIn Western Europe, the resurgence of COVID-19 cases led to increased government restrictions and store closures during the quarter. As a result, net sales declined across much of the region, notably in the United Kingdom, France and Spain.\n<\/li>\n
- \nOperating income increased, primarily driven by the growth in travel retail.\n<\/li>\n<\/ul>\n
2<\/sup>The net sales from the Company\u2019s travel retail business are included in the Europe, the Middle East & Africa region, with the exception of the net sales of Dr. Jart+ in the travel retail channel that are reflected in Korea in the Asia\/Pacific region.<\/i><\/p>\nAsia\/Pacific<\/span><\/b><\/p>\n\n- \nNet sales growth reflected increases in mainland China, Australia, Korea and several smaller markets.\n<\/li>\n
- \nSkin care, fragrance and hair care net sales grew strong double-digits in the region, while makeup net sales increased slightly.\n<\/li>\n
- \nThe Company continued to focus its investments on digital marketing, which drove strong double-digit online sales growth. Department stores and freestanding stores grew double digits as well.\n<\/li>\n
- \nIn mainland China, net sales grew strong double digits led by continued strength in skin care, an initial recovery in makeup and an acceleration in fragrance growth. Nearly every brand grew with the luxury brands outperforming. Sales increased double digits in every channel.\n<\/li>\n
- \nOperating income increased, driven by higher net sales.\n<\/li>\n<\/ul>\n
Nine-Month Results<\/span><\/b><\/p>\n\n- \nFor the nine months ended March 31, 2021, the Company reported net sales of $12.28 billion, a 3% increase compared with $11.86 billion in the prior-year period. Net sales increased 2% in constant currency. Incremental net sales from the Company\u2019s acquisition of Have&Be Co. Ltd. (\u201cDr. Jart+\u201d) contributed approximately 2 percentage points of net sales growth.\n<\/li>\n
- \nNet earnings were $1.85 billion, and diluted earnings per share was $5.03. In the prior-year nine months, the Company reported net earnings of $1.15 billion and diluted earnings per share of $3.12.\n<\/li>\n
- \nDuring the nine-months ended March 31, 2021, the Company recorded restructuring and other charges, changes in contingent consideration and goodwill, other intangible and long-lived asset impairments that, combined, totaled $303 million ($237 million after tax), equal to $.65 per diluted share. The prior-year period results include restructuring and other charges, changes in contingent consideration, goodwill, other intangible and long-lived asset impairments and other income primarily related to a gain on a previously held equity investment in Have&Be Co. Ltd. that totaled $601 million ($554 million after tax), equal to $1.51 per diluted share.\n<\/li>\n
- \nExcluding restructuring and other charges and adjustments, adjusted diluted net earnings per common share for the nine months ended March 31, 2021 increased 23%, and rose 20% in constant currency. For the nine months ended March 31, 2021, the benefit of foreign currency translation on diluted net earnings per common share was $.10.\n<\/li>\n<\/ul>\n
Cash Flows<\/span><\/b><\/p>\n\n- \nFor the nine months ended March 31, 2021, net cash flows provided by operating activities were $2.78 billion, favorable to the $1.95 billion in the prior-year period, reflecting an improvement in working capital, as well as higher earnings before taxes, excluding non-cash items.\n<\/li>\n
- \nIn March 2021, the Company resumed its repurchase of shares of the Company’s Class A Common Stock and purchased approximately 1.2 million shares for $316 million as of March 31, 2021.\n<\/li>\n
- \nThe Company ended the quarter with $6.4 billion in cash and cash equivalents after returning $877 million cash to stockholders through dividends and share repurchases during the nine month period and repaying the outstanding balance of $750 million drawn on its revolving credit facility in August 2020. In March 2021, the Company issued $600 million of new senior notes and, in April 2021, the Company repaid $450 million aggregate principal amount of its Senior Notes due in May 2021.\n<\/li>\n
- \nIn February 2021, the Company announced that it will increase its ownership in DECIEM Beauty Group (\u201cDECIEM\u201d) from approximately 29% to approximately 76% for roughly $1.0 billion. The transaction is expected to be completed in May 2021 and will be funded with a portion of the proceeds from the March 2021 senior notes and cash on hand.\n<\/li>\n<\/ul>\n
Outlook
\n
<\/span><\/b>With multiple engines of growth across regions, brands, product categories and channels, the Company is confident it is well-positioned to drive a gradual recovery as macro-conditions and market dynamics support it. The Company expects to invest in areas to support the recovery, including advertising, online and supply chain, to both drive growth in areas of opportunity and help nurture emerging trends in the rest of the business.\n<\/p>\n\nThe Company is mindful of risks related to social, economic and political matters, including restructurings and bankruptcies in the retail industry, geopolitical tensions, regulatory developments, global security issues, currency volatility, general economic challenges and changes in consumer preferences that affect consumer spending in certain countries, channels and travel corridors.\n<\/p>\n Full Year Fiscal 2021
\n
<\/i><\/b>Sales Outlook<\/span><\/i><\/p>\n\n- \nReported net sales are forecasted to increase between 11% and 12% versus the prior-year period.\n<\/li>\n
- \nThe Company\u2019s acquisition of DECIEM is expected to be negligible to the Company\u2019s overall sales growth.\n<\/li>\n
- \nExcluding the impact of currency, net sales are forecasted to increase between 9% and 10%.\n<\/li>\n<\/ul>\n
Earnings per Share Outlook<\/span><\/i><\/p>\n\n- \nReported diluted net earnings per common share are projected to be between $5.31 and $5.48. Excluding restructuring and other charges and adjustments, diluted net earnings per common share are projected to be between $6.05 and $6.15.\n<\/li>\n
- \nThe Company\u2019s acquisition of DECIEM is expected to be negligible to the Company\u2019s diluted net earnings per common share.\n<\/li>\n
- \nAdjusted diluted earnings per common share are expected to increase between 45% and 47% on a constant currency basis.<\/p>\n
\n- \nCurrency exchange rates are volatile and difficult to predict. Using March 31, 2021 spot rates for the fourth quarter of fiscal 2021, the currency benefit equates to about $.10 of diluted earnings per share.\n<\/li>\n
- \nThe Company expects to take charges associated with previously approved restructuring and other activities.<\/p>\n
\n- \nLeading Beauty Forward programs are nearing completion. Charges are estimated to be between approximately $8 million to $14 million, equal to $.02 to $.03 per diluted common share.\n<\/li>\n
- \nUnder the Post-COVID Business Acceleration Program, the Company estimates charges of approximately $199 million to $229 million, equal to $.42 to $.48 per diluted common share. The Company continues to evaluate further actions under the program.\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
\n\n| \n Reconciliation between GAAP and Non-GAAP
\n
<\/b>(Unaudited)<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n Year Ending June 30, 2021 (F)<\/sup><\/b><\/p>\n<\/td>\n| \n Twelve Months Ending
\n
<\/b>June 30<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n Net Sales Growth<\/b><\/p>\n<\/td>\n | \n Diluted EPS Growth<\/b><\/p>\n<\/td>\n | \n Diluted EPS<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n %,
\n
Constant
\n
Currency<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n %,
\n
Constant
\n
Currency<\/b><\/p>\n<\/td>\n | \n 2021 (F)<\/sup><\/b><\/p>\n<\/td>\n | \n\n 2020<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nForecast \/ Actual Results (1)<\/sup><\/p>\n<\/td>\n| \n \n11% – 12%\u00a0\n<\/p>\n<\/td>\n | \n \n9% – 10%\u00a0\n<\/p>\n<\/td>\n | \n \n29% – 33%\u00a0\n<\/p>\n<\/td>\n | \n \n27% – 31%\u00a0\n<\/p>\n<\/td>\n | \n \n$5.31 – $5.48\n<\/p>\n<\/td>\n | | \n\n \n$\n<\/p>\n<\/td>\n | \n \n1.86\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Non-GAAP<\/span><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nRestructuring and other charges\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n.44 – .51\n<\/p>\n<\/td>\n | | \n\n \n.19\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nChanges in fair value of contingent consideration\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(.01\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n(.04\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGoodwill, other intangible and long-lived asset impairments\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n.24\n<\/p>\n<\/td>\n | | \n\n \n3.31\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nOther income, net\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n | | \n\n \n(1.20\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Non-GAAP<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 47% – 49%\u00a0<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $6.05 – $6.15<\/b><\/p>\n<\/td>\n | | \n\n $<\/b><\/p>\n<\/td>\n | \n 4.12<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nImpact of foreign currency on earnings per share\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(.10\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Forecasted constant currency net sales growth and earnings per share<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 45% – 47%\u00a0<\/b><\/p>\n<\/td>\n | \n $5.95 – $6.05<\/b><\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n (1)<\/sup>Represents GAAP, except Constant Currency percentages; includes restructuring and other charges and adjustments<\/i><\/p>\n<\/td>\n<\/tr>\n\n| \n (F)<\/sup>Represents forecast<\/i><\/p>\n<\/td>\n<\/tr>\n\n | <\/tr>\n<\/table>\nConference Call
\n<\/span><\/b>
The Est\u00e9e Lauder Companies will host a conference call at 9:30 a.m. (ET) today, May 3, 2021<\/b> to discuss its results. The dial-in number for the call is 888-294-4716 in the U.S. or 706-902-0101 internationally (conference ID number: 5569398). The call will also be webcast live at http:\/\/www.elcompanies.com\/investors\/events-and-presentations<\/a><\/span>.\n<\/p>\nCautionary Note Regarding Forward-Looking Statements
\n
<\/span><\/b>Statements in this press release, in particular those in \u201cOutlook,\u201d as well as remarks by the CEO and other members of management, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may address our expectations regarding sales, earnings or other future financial performance and liquidity, other performance measures, product introductions, entry into new geographic regions, information technology initiatives, new methods of sale, our long-term strategy, restructuring and other charges and resulting cost savings, and future operations or operating results. These statements may contain words like \u201cexpect,\u201d \u201cwill,\u201d \u201cwill likely result,\u201d \u201cwould,\u201d \u201cbelieve,\u201d \u201cestimate,\u201d \u201cplanned,\u201d \u201cplans,\u201d \u201cintends,\u201d \u201cmay,\u201d \u201cshould,\u201d \u201ccould,\u201d \u201canticipate,\u201d \u201cestimate,\u201d \u201cproject,\u201d \u201cprojected,\u201d \u201cforecast,\u201d and \u201cforecasted\u201d or similar expressions.\n<\/p>\n\nFactors that could cause actual results to differ materially from our forward-looking statements include the following:\n<\/p>\n \n\n| \n \n(1)\n<\/p>\n<\/td>\n | | \n\n \nincreased competitive activity from companies in the skin care, makeup, fragrance and hair care businesses;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(2)\n<\/p>\n<\/td>\n | | \n\n \nthe Company\u2019s ability to develop, produce and market new products on which future operating results may depend and to successfully address challenges in the Company\u2019s business;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(3)\n<\/p>\n<\/td>\n | | \n\n \nconsolidations, restructurings, bankruptcies and reorganizations in the retail industry causing a decrease in the number of stores that sell the Company\u2019s products, an increase in the ownership concentration within the retail industry, ownership of retailers by the Company\u2019s competitors or ownership of competitors by the Company\u2019s customers that are retailers and our inability to collect receivables;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(4)\n<\/p>\n<\/td>\n | | \n\n \ndestocking and tighter working capital management by retailers;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(5)\n<\/p>\n<\/td>\n | | \n\n \nthe success, or changes in timing or scope, of new product launches and the success, or changes in the timing or the scope, of advertising, sampling and merchandising programs;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(6)\n<\/p>\n<\/td>\n | | \n\n \nshifts in the preferences of consumers as to where and how they shop;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(7)\n<\/p>\n<\/td>\n | | \n\n \nsocial, political and economic risks to the Company\u2019s foreign or domestic manufacturing, distribution and retail operations, including changes in foreign investment and trade policies and regulations of the host countries and of the United States;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(8)\n<\/p>\n<\/td>\n | | \n\n \nchanges in the laws, regulations and policies (including the interpretations and enforcement thereof) that affect, or will affect, the Company\u2019s business, including those relating to its products or distribution networks, changes in accounting standards, tax laws and regulations, environmental or climate change laws, regulations or accords, trade rules and customs regulations, and the outcome and expense of legal or regulatory proceedings, and any action the Company may take as a result;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(9)\n<\/p>\n<\/td>\n | | \n\n \nforeign currency fluctuations affecting the Company\u2019s results of operations and the value of its foreign assets, the relative prices at which the Company and its foreign competitors sell products in the same markets and the Company\u2019s operating and manufacturing costs outside of the United States;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(10)\n<\/p>\n<\/td>\n | | \n\n \nchanges in global or local conditions, including those due to the volatility in the global credit and equity markets, natural or man-made disasters, real or perceived epidemics, or energy costs, that could affect consumer purchasing, the willingness or ability of consumers to travel and\/or purchase the Company\u2019s products while traveling, the financial strength of the Company\u2019s customers, suppliers or other contract counterparties, the Company\u2019s operations, the cost and availability of capital which the Company may need for new equipment, facilities or acquisitions, the returns that the Company is able to generate on its pension assets and the resulting impact on funding obligations, the cost and availability of raw materials and the assumptions underlying the Company\u2019s critical accounting estimates;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(11)\n<\/p>\n<\/td>\n | | \n\n \nimpacts attributable to the COVID-19 pandemic, including disruptions to our global business;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(12)\n<\/p>\n<\/td>\n | | \n\n \nshipment delays, commodity pricing, depletion of inventory and increased production costs resulting from disruptions of operations at any of the facilities that manufacture the Company\u2019s products or at the Company\u2019s distribution or inventory centers, including disruptions that may be caused by the implementation of information technology initiatives, or by restructurings;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(13)\n<\/p>\n<\/td>\n | | \n\n \nreal estate rates and availability, which may affect the Company\u2019s ability to increase or maintain the number of retail locations at which the Company sells its products and the costs associated with the Company\u2019s other facilities;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(14)\n<\/p>\n<\/td>\n | | \n\n \nchanges in product mix to products which are less profitable;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(15)\n<\/p>\n<\/td>\n | | \n\n \nthe Company\u2019s ability to acquire, develop or implement new information and distribution technologies and initiatives on a timely basis and within the Company\u2019s cost estimates and the Company\u2019s ability to maintain continuous operations of such systems and the security of data and other information that may be stored in such systems or other systems or media;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(16)\n<\/p>\n<\/td>\n | | \n\n \nthe Company\u2019s ability to capitalize on opportunities for improved efficiency, such as publicly-announced strategies and restructuring and cost-savings initiatives, and to integrate acquired businesses and realize value therefrom;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(17)\n<\/p>\n<\/td>\n | | \n\n \nconsequences attributable to local or international conflicts around the world, as well as from any terrorist action, retaliation and the threat of further action or retaliation;\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(18)\n<\/p>\n<\/td>\n | | \n\n \nthe timing and impact of acquisitions, investments and divestitures; and\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n(19)\n<\/p>\n<\/td>\n | | \n\n \nadditional factors as described in the Company\u2019s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2020.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nThe Company assumes no responsibility to update forward-looking statements made herein or otherwise.\n<\/p>\n The Est\u00e9e Lauder Companies Inc.<\/a><\/span> is one of the world\u2019s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. The Company\u2019s products are sold in approximately 150 countries and territories under brand names including: Est\u00e9e Lauder, Aramis, Clinique, Lab Series, Origins, Tommy Hilfiger, M\u00b7A\u00b7C, La Mer, Bobbi Brown, Donna Karan New York, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin, Tom Ford Beauty, Smashbox, Ermenegildo Zegna, AERIN, RODIN olio lusso, Le Labo, Editions de Parfums Fr\u00e9d\u00e9ric Malle, GLAMGLOW, Kilian Paris, BECCA, Too Faced and Dr. Jart+.\n<\/p>\n\nELC-F
\n
ELC-E\n<\/p>\n \n\n | \n\u00a0<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
\n
(Unaudited)<\/b><\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n Three Months Ended
\n
March 31<\/b><\/p>\n<\/td>\n | \n Percentage
\n
Change<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n Nine Months Ended
\n
March 31<\/b><\/p>\n<\/td>\n | \n Percentage
\n
Change<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n ($ in millions, except per share data)<\/i><\/p>\n<\/td>\n | \n 2021<\/b><\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2021<\/b><\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Net sales<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 3,864<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 3,345<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 16<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 12,279<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 11,864<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 3<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nCost of sales\n<\/p>\n<\/td>\n | \n \n939\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n836\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n12\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n2,848\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n2,785\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n2\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Gross profit<\/b><\/p>\n<\/td>\n | \n 2,925<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2,509<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 17<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 9,431<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 9,079<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 4<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Gross margin<\/i><\/b><\/p>\n<\/td>\n | \n 75.7<\/i><\/b><\/p>\n<\/td>\n | \n %<\/i><\/b><\/p>\n<\/td>\n | \n 75.0<\/i><\/b><\/p>\n<\/td>\n | \n %<\/i><\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n | \n 76.8<\/i><\/b><\/p>\n<\/td>\n | \n %<\/i><\/b><\/p>\n<\/td>\n | \n 76.5<\/i><\/b><\/p>\n<\/td>\n | \n %<\/i><\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n Operating expenses<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n \nSelling, general and administrative(A)<\/sup><\/p>\n<\/td>\n| \n \n2,145\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n2,030\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n6\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n6,761\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n6,753\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nRestructuring and other charges (B)<\/sup><\/p>\n<\/td>\n| \n \n131\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n24\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n100\n<\/p>\n<\/td>\n | \n \n+\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n172\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n54\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n100\n<\/p>\n<\/td>\n | \n \n+\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGoodwill impairment(C)<\/sup><\/p>\n<\/td>\n| \n \n\u2014\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n275\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(100\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n54\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n786\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(93\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nOther intangible and long-lived asset impairments(C)<\/sup><\/p>\n<\/td>\n| \n \n33\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n71\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(54\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n60\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n337\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(82\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Total operating expenses<\/b><\/p>\n<\/td>\n | \n 2,309<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2,400<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n (4<\/b><\/p>\n<\/td>\n | \n )<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 7,047<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 7,930<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n (11<\/b><\/p>\n<\/td>\n | \n )<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Operating expense margin<\/i><\/b><\/p>\n<\/td>\n | \n 59.8<\/i><\/b><\/p>\n<\/td>\n | \n %<\/i><\/b><\/p>\n<\/td>\n | \n 71.7<\/i><\/b><\/p>\n<\/td>\n | \n %<\/i><\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n | \n 57.4<\/i><\/b><\/p>\n<\/td>\n | \n %<\/i><\/b><\/p>\n<\/td>\n | \n 66.8<\/i><\/b><\/p>\n<\/td>\n | \n %<\/i><\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | | \n\n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \u00a0<\/td>\n<\/tr>\n | \n| \n Operating income<\/b><\/p>\n<\/td>\n | \n 616<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 109<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 100<\/b><\/p>\n<\/td>\n | \n +<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2,384<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 1,149<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 100<\/b><\/p>\n<\/td>\n | \n +<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n
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