<\/p>\n
The Est\u00e9e Lauder Companies Reports Fiscal 2026 Results<\/b><\/p>\n
Delivers Return to Sales Growth and Improved Profitability with Beauty Reimagined Execution<\/b><\/p>\n
\n\u2013 As Reported Net Sales Growth of 6% in the Fourth Quarter and 5% for the Full Year
\n<\/b>
\u2013 Organic Net Sales Growth of 5% in the Fourth Quarter and 3% for the Full Year
\n<\/b>
\u2013 Fourth Quarter and Full-Year Net Sales Growth Across All Geographic Regions
\n
<\/b>\u2013 Full-Year Gross Margin and Operating Margin Expansion<\/b><\/p>\n
Affirms Fiscal 2027 Outlook of Organic Net Sales Growth of 3% to 5%;
\n<\/b>
Raises Outlook on Adjusted Operating Margin to 12.7% to 13.5%<\/b><\/p>\n
NEW YORK–(BUSINESS WIRE<\/a>)–The Est\u00e9e Lauder Companies Inc.<\/a> (NYSE: EL) today reported its financial results for its fiscal year ended June 30, 2026.<\/p>\n \n\u201cI am incredibly proud of our team for delivering fiscal 2026 results ahead of the expectations we had to start the year. We reignited growth with organic sales rising 3%, driven by the breadth of growth across brands, and achieved significant operating margin expansion,\u201d said St\u00e9phane de La Faverie, President and CEO. \u201cWe ended the year on a high note, as organic sales growth accelerated to 5% for our fourth consecutive quarter of growth and stronger profitability. We are delivering on all aspects of Beauty Reimagined. Our One ELC operating model is increasingly enabling the entire organization to move at speed and with discipline.\u201d<\/p>\n \nde La Faverie emphasized, \u201cFor fiscal 2027, we are affirming our confidence to accelerate organic sales growth. In addition, we are raising our outlook for an even stronger adjusted operating margin, as we double down on our strengths to further diversify growth across product categories and geographies, including accelerating growth in North America.\u201d<\/p>\n FISCAL 2026 SELECT FINANCIAL RESULTS<\/span><\/b> (unaudited)<\/span>1,2<\/sup><\/p>\n \n\u00a0<\/p>\n<\/td>\n Year Ended<\/b><\/p>\n June 30<\/b><\/p>\n<\/td>\n Percentage<\/b><\/p>\n Change<\/b><\/p>\n<\/td>\n<\/tr>\n ($ in millions, except per share data)<\/i><\/p>\n<\/td>\n 2026<\/b><\/p>\n<\/td>\n 2025<\/b><\/p>\n<\/td>\n<\/tr>\n \nNet Sales<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n15,049<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n14,326<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n5<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \nOrganic Net Sales, Non-GAAP1<\/sup><\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n14,811<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n14,323<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \nOther Financial Results:<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nGross Profit<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n11,362<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n10,597<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n7<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n Gross Margin<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 75.5<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 74.0<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nAdjusted Gross Profit, Non-GAAP1,2<\/sup><\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n11,372<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n10,602<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n7<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n Adjusted Gross Margin, Non-GAAP1,2<\/sup><\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 75.5<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 74.0<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nOperating Income (Loss)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n780<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(785<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n100<\/p>\n<\/td>\n \n+%<\/p>\n<\/td>\n<\/tr>\n Operating Margin<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 5.2<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n (5.5<\/i><\/p>\n<\/td>\n )%<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nAdjusted Operating Income, Non-GAAP1,2<\/sup><\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,687<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,146<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n47<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n Adjusted Operating Margin, Non-GAAP1,2<\/sup><\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 11.2<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 8.0<\/i><\/p>\n<\/td>\n %<\/i><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nDiluted Net Earnings (Loss) Per Common Share<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n.50<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(3.15<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n100<\/p>\n<\/td>\n \n+%<\/p>\n<\/td>\n<\/tr>\n \nAdjusted Diluted Net Earnings Per Common Share, Non-GAAP1,2<\/sup><\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n2.51<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1.51<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n66<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n SELECT FISCAL 2026 FOURTH QUARTER AND FULL-YEAR HIGHLIGHTS<\/span>6<\/sup><\/b><\/p>\n Beauty Gains and Achievements<\/b><\/p>\n Operations and Execution<\/b><\/p>\n Product and Commercial Innovation<\/b><\/p>\n Social Impact & Sustainability<\/b><\/p>\n PROFIT RECOVERY AND GROWTH PLAN (\u201cPRGP\u201d) \nKey achievements through June 30, 2026:<\/p>\n \nSee \u201cRestructuring Program Component of the PRGP<\/b>\u201d below for more information.<\/p>\n \nActions under the Company\u2019s PRGP are still expected to be substantially completed in fiscal 2027, with a vast majority of the full run-rate benefits still expected to be realized during fiscal 2027.<\/p>\n Restructuring Program Component of the PRGP \nOnce all approved initiatives are fully implemented, the restructuring program component of the PRGP is expected to result in restructuring and other charges slightly above the high-end of the previously announced range of $1.5 billion and $1.7 billion, before taxes. This consists of employee-related costs, asset-related costs, contract terminations and other costs associated with implementing these initiatives. The restructuring program is expected to yield annual gross benefits of approximately $1.2 billion, at the high-end of the previously announced range of between $1.0 billion and $1.2 billion, before taxes, to help restore operating margin, offset inflation and fuel increased reinvestments in consumer-facing areas to drive sustainable sales growth.<\/p>\n \nThe Company estimates a final net reduction in positions of approximately 10,000, at the high-end of the previously announced range of 9,000 to 10,000. This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas. The restructuring program\u2019s focus includes the (i) reorganization and rightsizing of certain areas, (ii) simplification and acceleration of processes, (iii) outsourcing of select services and (iv) evolution of go-to-market footprint and selling models, all to help rebuild operating margin and also fuel reinvestment in consumer-facing areas to drive sustainable sales growth.<\/p>\n FISCAL 2026 RESULTS BY PRODUCT CATEGORY AND BY REGION<\/span><\/b><\/p>\n Results by Product Category<\/b><\/p>\n (Unaudited)<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n Year Ended June 30<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n Net Sales<\/b><\/p>\n<\/td>\n Percentage Change1<\/sup><\/b><\/p>\n<\/td>\n Operating Percentage ($ in millions)<\/i><\/p>\n<\/td>\n 2026<\/b><\/p>\n<\/td>\n 2025<\/b><\/p>\n<\/td>\n Reported Impact of Organic 2026<\/b><\/p>\n<\/td>\n 2025<\/b><\/p>\n<\/td>\n Reported \nSkin Care<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n7,338<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n6,962<\/p>\n<\/td>\n \n5<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n(2<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n \n4<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,416<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n574<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n100<\/p>\n<\/td>\n \n+%<\/p>\n<\/td>\n<\/tr>\n \nMakeup<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4,276<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4,205<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(2<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(70<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(441<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n84<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nFragrance<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,779<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,491<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n12<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(2<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n10<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n204<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(378<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n100<\/p>\n<\/td>\n \n+<\/p>\n<\/td>\n<\/tr>\n \nHair Care<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n565<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n565<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(1<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(1<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(4<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(41<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n90<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nOther<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n103<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n100<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n57<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(13<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n100<\/p>\n<\/td>\n \n+<\/p>\n<\/td>\n<\/tr>\n Subtotal<\/b><\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n 15,061<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n 14,323<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 5<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n (2<\/b><\/p>\n<\/td>\n )%<\/b><\/p>\n<\/td>\n 3<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n 1,603<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n (299<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n 100<\/b><\/p>\n<\/td>\n +%<\/b><\/p>\n<\/td>\n<\/tr>\n \nReturns\/charges \n\u00a0<\/p>\n<\/td>\n \n(12<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(823<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(486<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n Total<\/b><\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n 15,049<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n 14,326<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 5<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n (2<\/b><\/p>\n<\/td>\n )%<\/b><\/p>\n<\/td>\n 3<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n 780<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n (785<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n 100<\/b><\/p>\n<\/td>\n +%<\/b><\/p>\n<\/td>\n<\/tr>\n Non-GAAP Adjustments to As Reported Operating Income (Loss):<\/b><\/p>\n<\/td>\n<\/tr>\n \nReturns\/charges associated with restructuring and other activities<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n823<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n486<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nSkin Care – Securities class action litigation settlement<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n27<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nMakeup – Securities class action litigation settlement<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n35<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nFragrance – Securities class action litigation settlement<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n13<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nHair Care – Securities class action litigation settlement<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n9<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nSkin Care – Other intangible asset impairments<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n375<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nMakeup – Goodwill and other intangible asset impairments<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n308<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nFragrance – Other intangible asset impairment<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n549<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nOther – Other intangible asset impairment<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n54<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nMakeup – Talcum litigation settlement agreements2<\/sup><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n159<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n Adjusted Operating Income – Non-GAAP<\/b><\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n 1,687<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n $<\/b><\/p>\n<\/td>\n 1,146<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 47<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n<\/tr>\n 1<\/sup>Percentages are calculated on an individual basis.<\/i><\/p>\n<\/td>\n<\/tr>\n 2<\/sup>From the end of August 2024 through October 2024, the Company entered into agreements with certain plaintiff law firms to resolve over 200 pending cosmetic talcum powder matters, which was a portion of the pending matters that existed at that time, and establish a framework for resolving potential future claims brought by these plaintiff firms from January 1, 2025 through December 31, 2029 (mitigating a portion of its future exposure), subject to annual caps (the \u201cTalcum litigation settlement agreements\u201d). In connection with the Talcum litigation settlement agreements, the Company recorded a charge of $159 million in the fiscal 2025 first quarter, representing its best estimate of probable losses for current and potential future claims under these agreements.<\/i><\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nThe product category commentary below on net sales reflects organic net sales, excluding the favorable impacts from foreign currency translation, and on operating results reflects adjusted operating results, excluding the adjustments in the preceding table. In addition to the Operational Highlights above, below are the drivers of the Company\u2019s performance.<\/p>\n Skin Care<\/span><\/b><\/p>\n Makeup<\/span><\/b><\/p>\n Fragrance<\/span><\/b><\/p>\n\n
\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n
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\n \n \u00a0<\/td>\n<\/tr>\n \n 1<\/sup>See pages 21 through 23 for the reconciliation between GAAP and Adjusted Non-GAAP measures.<\/i><\/td>\n<\/tr>\n \n 2<\/sup>Adjusted Non-GAAP measures are calculated based on Net Sales adjusted only for Returns associated with restructuring and other activities.<\/i><\/td>\n<\/tr>\n \n 3<\/sup>From the end of August 2024 through October 2024, the Company entered into agreements with certain plaintiff law firms to resolve over 200 pending cosmetic talcum powder matters, which was a portion of the pending matters that existed at that time, and establish a framework for resolving potential future claims brought by these plaintiff firms from January 1, 2025 through December 31, 2029 (mitigating a portion of its future exposure), subject to annual caps (the \u201cTalcum litigation settlement agreements\u201d). In connection with the Talcum litigation settlement agreements, the Company recorded a charge of $159 million in the fiscal 2025 first quarter, representing its best estimate of probable losses for current and potential future claims under these agreements.<\/i><\/td>\n<\/tr>\n \n 4<\/sup>Consumer-facing investments includes co-operative advertising, selling, advertising and promotional expenses, as well as store operating costs.<\/i><\/td>\n<\/tr>\n<\/table>\n \n
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\n \n \u00a0<\/td>\n<\/tr>\n \n 5<\/sup>Free Cash Flow is defined as net cash flows from operating activities less capital expenditures. See page 23 for the reconciliation between GAAP and Adjusted Non-GAAP measures.<\/i><\/td>\n<\/tr>\n<\/table>\n \n
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\n \n \u00a0<\/td>\n<\/tr>\n \n 6<\/sup>Since the Company\u2019s last earnings announcement, including some previously disclosed.<\/i><\/td>\n<\/tr>\n \n 7<\/sup>Source, excluding direct-to-consumer data: Circana, LLC, US Prestige Beauty Total Department\/Specialty, Dollar Share Growth of Corporation, three-months ended June 30, 2026.<\/i><\/td>\n<\/tr>\n<\/table>\n \n
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The PRGP, coupled with Beauty Reimagined, has transformed the Company\u2019s operating model to (i) create greater capacity to invest behind sales growth by streamlining its fixed-cost base, (ii) support the recovery toward a solid double-digit adjusted operating margin and (iii) enhance agility to mitigate external volatility. The Company\u2019s ongoing transformation has fundamentally reshaped the way it operates, creating a faster, more efficient organization with a culture of continuous improvement that drives ongoing operational optimization, process simplification and greater operating leverage as it scales. As of June 30, 2026, the Company concluded approvals relating to the restructuring component of the PRGP.<\/p>\n\n
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Relating specifically to the restructuring program component of the PRGP, through June 30, 2026, the Company has recognized total cumulative charges under the restructuring component of the PRGP of $1.4 billion, consisting primarily of employee-related costs. In fiscal 2026, for the fourth quarter and full-year, the Company recognized charges of $0.3 billion and $0.8 billion, respectively. As noted above, approvals for specific initiatives under this restructuring program were concluded as of June 30, 2026.<\/p>\n\n
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Income (Loss)<\/b><\/p>\n<\/td>\n\n
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C<\/b>hange<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n \n \n \n
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<\/b>Basis<\/b><\/p>\n<\/td>\n\n
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Foreign
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Currency
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Translation<\/b><\/p>\n<\/td>\n\n
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<\/b>Net Sales
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<\/b>(Non-GAAP)<\/b><\/p>\n<\/td>\n\n \n \n
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<\/b>Basis<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n
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associated with
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restructuring and
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other activities<\/p>\n<\/td>\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n <\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n
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