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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

RESULTS OF OPERATIONS

We manufacture, market and sell beauty products including those in the skin care, makeup, fragrance and hair care categories, which are distributed in approximately 150 countries and territories.

Year Ended June 30,

($ in millions) $ % $ % $ %

Operating expenses:

Securities class action litigation settlement 84 0.6 — — — —

Impairment of other intangible assets — — 1,273 8.9 180 1.2

Talcum litigation settlement agreements — — 159 1.1 — —

Other components of net periodic benefit cost 19 0.1 12 0.1 (13) (0.1)

Percentages not adjusted for differences caused by rounding

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The following table is a comparative summary of operating results for fiscal 2026, 2025 and 2024, for our product categories and geographic regions and reflects the basis of presentation described in Item 8. Financial Statements and Supplementary Data – Note 2 – Summary of Significant Accounting Policies and Note 23 – Segment Data and Related Information, for our product categories that meet the definition of reportable segments, for all periods presented. Royalty revenue from license arrangements, and products and services that do not fit within our definitions of skin care, makeup, fragrance and hair care have been included in the “other” category.

Year Ended June 30,

NET SALES

By Product Category:

Returns associated with restructuring and other activities(1) (12) 3 (1)

By Geographic Region(2):

Returns associated with restructuring and other activities(1) (12) 3 (1)

OPERATING INCOME (LOSS)

By Product Category:

Charges associated with restructuring and other activities(1) (823) (486) (124)

By Geographic Region(2):

Charges associated with restructuring and other activities(1) (823) (486) (124)

(1) Returns and charges associated with restructuring and other activities are not allocated to our 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. Accordingly, the discussions of Net sales and Operating results by Product Categories and Geographic Regions below exclude the impacts of returns and charges associated with restructuring and other activities.

(2) The net sales and operating results from our travel retail business are included in the Asia/Pacific region.

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Period-over-period changes in our net sales are generally attributable to the impacts from (i) pricing on our base portfolio, including changes in mix and those due to strategic pricing actions, (ii) volume, including changes driven by the impact of new product innovation, (iii) acquisitions and/or divestitures, and/or (iv) foreign currency translation. The percentages disclosed for these impacts are calculated on an individual basis.

The net sales impact from pricing consists of changes in list prices, due to strategic pricing actions, and mix shifts within and among product categories, geographic regions, brands and distribution channels. The prices at which we sell our products vary by brand, distribution channel (e.g., wholesale or direct-to-consumer) and may also vary by country. Our brands and products cover a broad array of pricing tiers. Prices of skin care and fragrance products are typically higher than makeup and hair care products.

New product innovation includes the introduction of new products, as well as changes related to existing products or markets where they are sold, including reformulations, regional expansion, repackaging and sets. A product is considered "new innovation" for the twelve-month period following the initial shipment date. Our innovation is often launched at different price points than existing products and value derived from innovation may vary from year to year. We continually introduce new products, support new and established products through advertising, merchandising and sampling and phase out existing products that no longer meet the needs of our consumers or our objectives. The economics of developing, producing, launching, supporting and discontinuing products impact our sales and operating performance each period. The introduction of new products often has some cannibalizing effect on sales of existing products, inclusive of potential sales returns, which we take into account in our business planning. The impact of new product introductions, including timing compared to introductions in prior periods, also affects our results.

Non-GAAP Financial Measures

We operate on a global basis, with the majority of our net sales generated outside the United States. Accordingly, fluctuations in foreign currency exchange rates can affect our results of operations. Therefore, we present certain net sales, operating results, provision for income taxes and diluted net earnings (loss) per common share information excluding the effect of foreign currency rate fluctuations to provide a framework for assessing the performance of our underlying business outside the United States. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We calculate constant currency information by translating current-period results using prior-year monthly average foreign currency exchange rates and adjusting for the period-over-period impact of foreign currency cash flow hedging activities.

Overview

We are a leader in prestige beauty, which combines the repeat purchase and relative affordability of consumer goods with high quality products and services. Within prestige beauty, we are diversified by product category, geography, brand, product sub-category, channel, consumer segment and price point. We also leverage consumer analytics and insights across our brand portfolio to grow sales and pursue profitable opportunities. These analytics and insights, combined with our creativity, also inform our innovation to provide a broad, locally-relevant and inclusive range of prestige products with the aim of competing effectively for a greater share of a consumer's beauty routine.

Our global distribution capability and operations allow us to focus on targeted expanded consumer reach wherever consumer demographics and trends are attractive. Our regional organizations, and the expertise of our people there, enable our brands to be more locally and culturally relevant in both product assortment and communications. We are continually evolving the way we connect with our consumers in stores, online and where they travel, including by expanding our digital and social media presence and the engagement of global and local influencers to amplify brand or product stories. We tailor implementation of our strategy by market to drive consumer engagement, recruitment and loyalty. We strive to strengthen our presence in large, image-building core markets, while broadening our presence in emerging markets.

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We approach distribution strategically by product category and location and seek to optimize distribution by matching our brands with appropriate opportunities while seeking to maintain high productivity per door. We are expanding our brands' locations as we continue to seek high-growth opportunities to reach new consumers in online, freestanding stores, specialty-multi and travel retail, which we believe will be higher growth channels in the long term. We also focus on brand-building retail activities, technology-driven activations and omnichannel capabilities that enhance the shopping experience for consumers.

Outlook

While we have seen improvements within our business, we are mindful of areas of volatility and uncertainty that may impact our results. We continue to face challenges in key markets in the West, including in some markets in Western Europe and the United States. Within our Asia travel retail business, we continue to monitor the impacts of the change in duty-free retailers servicing the Beijing and Shanghai airports, including the related online businesses. We are also monitoring the conflict in the Middle East as it relates to our business in the domestic markets and travel retail locations in the region. Net sales from locations impacted by the conflict in the Middle East accounted for approximately 2% of consolidated net sales in fiscal 2025. We continue to monitor and assess the impact that these areas of volatility and uncertainty may have on net sales and profitability, including impacts to our effective tax rate from changes to our geographical mix of earnings.

We are continuing to monitor and assess the potential effects of changing tariff conditions in the United States as well as in other markets in which we operate. These tariffs have led to significant volatility and uncertainty in global markets and difficulty in forecasting demand. We have implemented and are continuing to implement and consider additional mitigation measures. Our strategy remains optimizing our global supply chain network, by sourcing and manufacturing in the geography of sale where feasible. We also continue to leverage trade programs where available and monitor for additional opportunities as countries continue to update their trade programs. We anticipate tariffs to have an adverse effect on fiscal 2027 profitability and cash flows, and depending on actual rates and countries imposing tariffs such adverse impacts could be material.

On February 20, 2026, the U.S. Supreme Court ruled that the U.S. tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) on goods imported into the U.S. were unauthorized. The ruling did not address potential refunds, however on March 4, 2026, the U.S. Court of International Trade ordered U.S. Customs and Border Protection to begin refunding all tariffs imposed under IEEPA. During the fiscal 2026 fourth quarter, we submitted claims for a portion of our eligible IEEPA tariffs paid, and have begun to receive refunds. For refunds received during the period, we have recorded these as an offset to cost of sales. As of June 30, 2026, the remaining amount of potential IEEPA tariff refunds not yet submitted or for which refunds have not been received are not considered material to the consolidated financial statements.

We continue to believe that the best way to increase long-term stockholder value is to provide superior products and services in the most efficient and effective manner while recognizing shifts in consumers’ behaviors and shopping practices. Accordingly, our long-term strategy has numerous initiatives across product categories, brands, geographic regions, channels of distribution and functions designed to grow our sales, provide cost efficiencies, leverage our strengths, such as our history of outstanding creativity and innovation, high quality products and services, and engaging communications, and make us more productive and profitable. Following the transition of leadership in the second and third quarters of fiscal 2025, we are executing against "Beauty Reimagined," our previously announced strategic vision which focuses on accelerating best-in-class consumer coverage, creating transformative innovation, boosting consumer-facing investments, fueling sustainable growth through bold efficiencies and reimagining the way we work, including through the expansion of the Profit Recovery and Growth Plan ("PRGP") during the fiscal 2025 third quarter, as discussed below.

We continue to monitor the effects of the global macro environment, including the risk of recession; currency volatility; inflationary pressures; supply chain challenges; social and political issues; competitive pressures; legal and regulatory matters, including the imposition of tariffs and sanctions; geopolitical tensions; and global security issues. We are also mindful of inflationary pressures (including those caused by tariffs) on our cost base and are monitoring the impact on consumer preferences, the impact of changes being made in the organization, including those related to Beauty Reimagined and the PRGP, as well as the actual and potential impact of changes that have been made and are expected to be made as part of the PRGP on suppliers, retailers and others, and challenges relating to successfully outsourcing select services. Declines in net sales and profitability have, and may continue to, adversely impact the goodwill and other intangible assets associated with our brands, as well as long-lived assets, potentially resulting in impairments.

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. We are continuing to monitor and evaluate the potential impact of incorporating the global minimum tax in additional countries that have yet to enact the legislation.

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On July 4, 2025, 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, and we are continuing to evaluate the potential impact of the provisions that are expected to be effective in future fiscal years.

Our ability to recognize deferred tax assets, inclusive of utilizing net operating loss carryforwards, tax credits, and other carryforwards is dependent on the generation of sufficient taxable income in future periods. Accordingly, there can be no assurance that additional valuation allowances on our deferred tax assets will not be required should our financial performance be negatively impacted in the future. Such valuation allowance could be material.

Restructuring Program Component of the Profit Recovery and Growth Plan

As announced on November 1, 2023, we launched the PRGP to help progressively rebuild our 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, we expect to have improved our gross margin and expense base to drive greater operating leverage for the future.

As a component of the PRGP, on February 5, 2024, we announced a two-year restructuring program. The restructuring program’s main focus included the reorganization and rightsizing of certain areas of our business as well as simplification and acceleration of processes. We committed to this course of action on February 1, 2024 and at that time, planned to substantially complete specific initiatives under the restructuring program through fiscal 2026.

After reviewing additional potential initiatives and the progress of previously approved initiatives, on February 3, 2025, we 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: (i) adopt a more competitive approach to procurement, a key pillar of savings, by further consolidating spending and strategically re-evaluating key supplier relationships; (ii) further improve efficiencies within our supply chain network through a zero-waste approach, aiming to improve demand forecasting and innovation planning to minimize excess inventory and product destruction; and (iii) outsource select services to proven global partners.

The expanded component of the restructuring program, as noted above, began during our fiscal 2025 third quarter with all initiatives to be approved by the end of fiscal 2026. 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, all to help rebuild operating margin and also fuel reinvestment in consumer-facing areas to drive sustainable sales growth.

As of June 30, 2026, approvals under the Restructuring Program concluded, and by the end of fiscal 2027, the cumulative approved initiatives are expected to be substantially completed.

Based on the total approved initiatives under the Restructuring Program, as of June 30, 2026 we estimate a final net reduction of approximately 10,000 positions globally, 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 total approved initiatives under the Restructuring Program are expected to result in restructuring and other charges of $1,748 million, before taxes, slightly above the high end of the previously announced range of $1,500 million to $1,700 million, 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, have been funded from cash provided by operations for initiatives implemented to date, and for the remaining initiatives are expected to result in future cash expenditures funded from cash provided by operations.

Once fully implemented, we expect the Restructuring Program to yield annual target gross benefits of approximately $1,200 million, at the high end of the previously announced range of between $1,000 million and $1,200 million, before taxes, a portion of which is expected to be reinvested in consumer-facing activities.

Further information about the Restructuring Program Component of the Profit Recovery and Growth Plan, is described in Item 8. Financial Statements and Supplementary Data – Note 7 – Charges Associated with Restructuring and Other Activities.

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Securities Class Action Litigation Settlement

On December 7, 2023 and January 22, 2024, purported securities class action complaints were filed in the United States District Court for the Southern District of New York against the Company and its then Chief Executive Officer and Chief Financial Officer. The actions were consolidated on February 20, 2024. On March 22, 2024, plaintiffs filed a consolidated amended complaint alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on alleged materially false and misleading statements between February 3, 2022 and October 31, 2023. On March 31, 2025, the Court denied defendants’ motion to dismiss. On April 2, 2026, the parties reached an agreement in principle to settle the securities class action litigation. In light of these discussions, during the fiscal 2026 third quarter, we recorded a loss contingency of $84 million, net of the estimated probable insurance recoveries, in the consolidated statements of earnings (loss) relating to a potential settlement of the securities class action. As of June 30, 2026, the total settlement amount has been funded, including amounts paid by the insurance carriers. This matter is subject to final approval from the Court.

Annual Impairment Analysis

Aligned with our policy on Goodwill and Other Indefinite-lived Intangible Assets, as described in Item 8. Financial Statements and Supplementary Data – Note 2 – Summary of Significant Accounting Policies, we performed our annual impairment assessments as of April 1, 2026. Goodwill and trademark intangible assets were evaluated using either qualitative or quantitative assessments, as appropriate based on the reporting unit or brand. Based on the results of these assessments, no impairment charges were recorded, however, certain trademarks have limited excess fair value over carrying value.

Trademark Intangible Assets with Limited Excess Fair Value

The estimated fair value of the Dr.Jart+ trademark exceeded its carrying value of $37 million by 4%. If all other assumptions are held constant, a decrease of 4% in the estimated future net sales, inclusive of the terminal value, or an increase of 30 basis points in the weighted average cost of capital, would have caused the carrying value of the trademark to approximate its estimated fair value.

The estimated fair value of the Too Faced trademark exceeded its carrying value of $62 million by 13%. If all other assumptions are held constant, a decrease of 11% in the estimated future net sales, inclusive of the terminal value, or an increase of 130 basis points in the weighted average cost of capital, would have caused the carrying value of the trademark to approximate its estimated fair value.

The estimated fair value of the TOM FORD trademark exceeded its carrying value of $1,805 million by 19%. The excess in the current year is primarily driven by a decrease in the weighted average cost of capital as of April 1, 2026 compared to the fair value calculated in the fiscal 2025 second quarter, the period when impairment charges were taken and the estimated fair value of the trademark was equal to its carrying value. If all other assumptions are held constant, an increase of 140 basis points in the weighted average cost of capital would have caused the carrying value of the trademark to approximate its estimated fair value.

Factors That Could Impact Future Impairment Assessments

The key assumptions used to determine the estimated fair value of the trademarks are primarily predicated on the success of future new product launches, the ability to secure strategic price increases, the achievement of distribution expansion plans, and the realization of cost reduction and other efficiency efforts. If such plans do not materialize, or if there are further challenges in the business environments where the brands operate, resulting changes in the key assumptions could negatively impact the estimated fair value of the trademarks. This could potentially lead to recognizing impairment charges in the future.

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Fiscal 2026 as Compared with Fiscal 2025

NET SALES

Year Ended June 30,

As Reported:

$ Change from prior year 723 (1,282)

% Change from prior year 5 % (8) %

Non-GAAP Financial Measure(1):

% Change from prior year in constant currency 3 % (8) %

(1)See “Reconciliations of Non-GAAP Financial Measures” beginning on page 44 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

Reported net sales increased in fiscal 2026, driven by skin care and fragrance, and to a lesser extent, makeup.

By geographic region, reported net sales increased across all geographic regions in fiscal 2026, led by Mainland China and EUKEM.

The fiscal 2026 reported net sales increase was impacted by approximately $250 million of favorable foreign currency translation.

Reported net sales increased 5% in fiscal 2026, driven by the increase from volume of 2%, the favorable impact from foreign currency translation of 2% and an increase from pricing of 1%, reflecting the favorable impact from strategic pricing actions and changes in mix.

Product Categories

Reported net sales for our product categories for the years ended June 30, 2026 and 2025 were as follows:

Year Ended June 30,

($ in millions) 2026 2025 $ Change % Change % Change in Constant Currency(1)

(1)See “Reconciliations of Non-GAAP Financial Measures” beginning on page 44 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

Skin Care

Reported skin care net sales increased $376 million, or 5%, in fiscal 2026, reflecting higher net sales from La Mer, Estée Lauder and The Ordinary, combined, of approximately $466 million.

Net sales from La Mer increased, reflecting the benefit from new product launches, as well as growth from The Treatment Lotion franchise. The increase in net sales from Estée Lauder reflected growth attributable to hero product franchises, as well as new product launches, which both drove performance during key shopping moments. Net sales from The Ordinary increased, primarily reflecting growth from targeted expanded consumer reach, as well as the benefit from key campaigns and the timing of key shopping moments.

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Skin care net sales were impacted by approximately $115 million of favorable foreign currency translation.

Reported skin care net sales increased 5% in fiscal 2026, driven by an increase from pricing of 3%, reflecting changes in mix and the favorable impact from strategic pricing actions, and the favorable impact from foreign currency translation of 2%. The impact from volume was flat period-over-period.

Makeup

Reported makeup net sales increased $71 million, or 2%, in fiscal 2026, including the favorable impact of foreign currency translation of 2%. Including the favorable impact of foreign currency translation, the increase in makeup net sales was primarily driven by M·A·C, reflecting higher net sales in the lip subcategory, driven by Powder Kiss Lipstick, Lip Pencil, MACximal Silky Matte Lipstick and MACximal Sleek Satin Lipstick. Also contributing to the increase in M·A·C net sales was the benefit from targeted expanded consumer reach.

Makeup net sales were impacted by approximately $84 million of favorable foreign currency translation.

Reported makeup net sales increased 2% in fiscal 2026, driven by the increase from volume of 3% and the favorable impact of foreign currency translation of 2%. Partially offsetting these increases was a decrease from pricing of 4%, reflecting changes in mix, partially offset by the favorable impact from strategic pricing actions.

Fragrance

Reported fragrance net sales increased $288 million, or 12%, in fiscal 2026, reflecting higher net sales from Le Labo, TOM FORD and KILIAN PARIS, combined, of approximately $221 million.

The increase in net sales from Le Labo was led by the Classic Collection, including growth from targeted expanded consumer reach and the benefit from new product launches. Net sales from TOM FORD increased, reflecting the benefit from new product launches which created halo benefits on existing products, with overall growth in both the Signature and Private Blend franchises. Net sales from KILIAN PARIS increased, driven by the Angels' Share and Love, don't be shy franchises including growth attributable to new product launches and key campaigns, as well as growth from targeted expanded consumer reach.

Fragrance net sales were impacted by approximately $48 million of favorable foreign currency translation.

Reported fragrance net sales increased 12% in fiscal 2026, driven by the increase from volume of 7%, an increase from pricing of 3%, reflecting the favorable impact from strategic pricing actions and changes in mix, and the favorable impact from foreign currency translation of 2%.

Hair Care

Reported hair care net sales were flat in fiscal 2026, including the favorable impact of foreign currency translation of 1%. Including the favorable impact of foreign currency translation, hair care net sales results reflected higher net sales from The Ordinary and lower net sales from Aveda.

The increase in net sales from The Ordinary reflected growth of the Multi-Peptide Serum for Hair Density, as well as the benefit from targeted expanded consumer reach.

The decrease in net sales from Aveda reflects the brand’s strategies to improve long-term performance, including (i) planned rebalancing of online promotional activity and (ii) the exit from underperforming doors, including freestanding stores. These declines were partially offset by the impact from its launch in Amazon's U.S. Premium Beauty store during the fiscal 2025 fourth quarter.

Hair care net sales were impacted by approximately $3 million of favorable foreign currency translation.

Reported hair care net sales were flat in fiscal 2026, driven by the increase from pricing of 3%, reflecting changes in mix and the favorable impact of strategic pricing actions, and the favorable impact from foreign currency translation of 1%. These increases were offset by the decrease from volume of 3%.

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Geographic Regions

Reported net sales for our geographic regions for the years ended June 30, 2026 and 2025 were as follows:

Year Ended June 30,

($ in millions) 2026 2025 $ Change % Change % Change in Constant Currency(2)

(1)The net sales from our travel retail business are included in the Asia/Pacific region.

(2) See “Reconciliations of Non-GAAP Financial Measures” beginning on page 44 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

Reported net sales increased in fiscal 2026, primarily driven by higher net sales in Mainland China and our travel retail business, combined, of approximately $531 million.

The increase in net sales in Mainland China reflected growth attributable to key shopping moments, including the benefits from key campaigns to drive sales and new product launches.

The increase in net sales in our travel retail business was driven by Asia travel retail, including (i) the increase in net sales in Korea travel retail and Hong Kong SAR travel retail, benefiting from retailer shifts toward more profitable duty-free business models, which helped reduce discounting, as well as the increase in traveling consumers, (ii) net sales growth in Hainan travel retail, reflecting the improvement in retail sales, benefiting from higher traffic and key campaigns to drive growth, and (iii) the net sales decline in the rest of mainland China travel retail, primarily driven by the transitory pressure from the change of duty-free retailers servicing the Beijing and Shanghai airports, including the related online businesses.

Reported net sales in The Americas increased 1% in fiscal 2026, driven by the increase from volume of 4%. Partially offsetting this increase was a decrease from pricing of 3%, reflecting changes in mix, partially offset by the favorable impact from strategic pricing actions. Reported net sales in EUKEM increased 6% in fiscal 2026, driven by the favorable impact of foreign currency translation of 5% and the increase from volume of 4%. These increases were partially offset by a decrease from pricing of 3%, reflecting changes in mix, partially offset by the favorable impact from strategic pricing actions. Reported net sales in Asia/Pacific increased 4% in fiscal 2026, driven by an increase from pricing of 4%, reflecting changes in mix and the favorable impact from strategic pricing actions, partially offset by the unfavorable impact from foreign currency translation of 1%. The impact from volume was flat period-over-period. Reported net sales in Mainland China increased 12% in fiscal 2026, driven by an increase from pricing of 10%, reflecting changes in mix and the favorable impact from strategic pricing actions, and the favorable impact from foreign currency translation of 3%. Partially offsetting these increases was the decrease from volume of 1%.

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GROSS MARGIN

Gross margin in fiscal 2026 increased to 75.5% as compared with 74.0% in fiscal 2025.

Fiscal 2026 vs. Fiscal 2025Favorable (Unfavorable) Basis Points

As Reported:

Mix of business 30

Obsolescence charges 80

Manufacturing costs and other 55

Foreign exchange transactions (15)

Returns and charges associated with restructuring and other activities —

As Reported Gross Margin Basis Point Variance 150

Non-GAAP Financial Measure Adjustments:

Returns and charges associated with restructuring and other activities —

Non-GAAP Gross Margin Basis Point Variance 150

The increase in gross margin in fiscal 2026 is driven by net benefits from the PRGP, partially offset by unfavorable impacts within manufacturing costs and other, reflecting the impact of inflation on our costs, as well as tariffs. The PRGP benefits were driven by the favorable impact of cost efficiencies within our global supply chain network and reductions in excess inventory.

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OPERATING EXPENSES

Operating expenses as a percentage of net sales in fiscal 2026 decreased to 70.3% as compared with 79.4% in fiscal 2025.

Fiscal 2026 vs. Fiscal 2025Favorable (Unfavorable) Basis Points

As Reported:

Advertising 10

Promotional 10

Store operating costs (10)

Consumer-facing operating expenses(1) 30

General and administrative 40

Shipping 20

Marketing 40

Product development 40

Stock-based compensation —

Foreign exchange transactions (10)

Non-consumer-facing operating expenses 130

Charges associated with restructuring and other activities (200)

Securities class action litigation settlement (60)

Impairment of goodwill and other intangible assets 900

Talcum litigation settlement agreements 110

As Reported Operating Expense Margin Basis Point Variance 910

Non-GAAP Financial Measure Adjustments:

Impact of restructuring and other activities 210

Securities class action litigation settlement 60

Impairment of goodwill and other intangible assets (900)

Talcum litigation settlement agreements(2) (110)

Non-GAAP Operating Expense Margin Basis Point Variance 170

(1)Consumer-facing operating expenses in this table and within the operating expense margin discussion below do not include the impact of co-operative advertising expenses, however, our references to consumer-facing investments throughout the remainder of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations include the consumer-facing operating expenses noted above as well as the impact of co-operative advertising expenses that are recorded as a reduction of revenue.

(2)From the end of August 2024 through October 2024, we 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 our future exposure), subject to annual caps (the “Talcum litigation settlement agreements”). In connection with the Talcum litigation settlement agreements, we recorded a charge of $159 million in the fiscal 2025 first quarter, representing our best estimate of probable losses for current and potential future claims under these agreements.

The favorability in our operating expense margin in fiscal 2026 reflected the impact of the increase in net sales, which offset the overall increase in investments in consumer-facing areas of the business to drive sales, including through key campaigns, new product launches and targeted expanded consumer reach. Non-consumer facing expenses were virtually flat year-over-year, with overall lower expenses within general and administrative, marketing, product development, and shipping, collectively, including lower employee-related costs realized through initiatives as part of the PRGP, with these benefits largely offset by higher employee incentive costs.

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OPERATING RESULTS

Year Ended June 30,

As Reported:

Operating income (loss) $ 780 $ (785)

% Change from prior year 100+% (100+)%

Operating Margin 5.2 % (5.5) %

Non-GAAP Financial Measure(1):

(1)See “Reconciliations of Non-GAAP Financial Measures” beginning on page 44 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

The reported operating margin for fiscal 2026 increased from the prior year, driven by the favorable operating expense margin, which includes the favorable year-over-year impact of goodwill and other intangible asset impairment charges in fiscal 2025 of $1,286 million, as well as the increase in net sales and increase in gross margin, as discussed above.

Product Categories

Reported operating income (loss) for our product categories for the years ended June 30, 2026 and 2025 were as follows:

Year Ended June 30,

(1)See “Reconciliations of Non-GAAP Financial Measures” beginning on page 44 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

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Skin Care

Reported skin care operating income increased $842 million, or over 100%, in fiscal 2026, reflecting an increase in net sales and the favorable year-over-year impact of the other intangible asset impairment charge in the prior year related to Dr.Jart+ of $375 million. The increase in operating income was partially offset by an increase in consumer-facing investments, including to support key campaigns, new product launches and targeted expanded consumer reach.

Makeup

Reported makeup operating loss decreased $371 million, or 84%, in fiscal 2026, reflecting the favorable year-over-year impact of other intangible asset impairment charges in the prior year relating to TOM FORD and Too Faced, combined, of $295 million and a goodwill impairment charge relating to Too Faced of $13 million, as well as the favorable year-over-year impact of the charge in fiscal 2025 associated with the Talcum litigation settlement agreements of $159 million. Partially offsetting the increase in operating results was an increase in consumer-facing investments, including to support key campaigns, new product launches and targeted expanded consumer reach.

Fragrance

Reported fragrance operating results increased $582 million, or over 100%, in fiscal 2026, reflecting the favorable year-over-year impact of the other intangible asset impairment charge in the prior year of $549 million relating to TOM FORD, as well as an increase in net sales. Partially offsetting these increases in operating results was an increase in consumer-facing investments, including to support key campaigns, new product launches and targeted expanded consumer reach.

Hair Care

Reported hair care operating loss decreased $37 million, or 90%, in fiscal 2026, reflecting lower cost of sales and lower non-consumer-facing expenses, including the reduction in employee-related costs realized through initiatives as part of the PRGP which were partially offset by higher employee incentive costs, and lower consumer-facing investments. These increases to operating results were partially offset by the unfavorable allocated impact of the securities class action litigation settlement.

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Geographic Regions

Reported operating income (loss) for our geographic regions for the years ended June 30, 2026 and 2025 were as follows:

Year Ended June 30,

(1)See “Reconciliations of Non-GAAP Financial Measures” beginning on page 44 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

Reported operating results in The Americas increased $1,029 million, or over 100%, in fiscal 2026, reflecting the favorable year-over-year impacts of other intangible asset impairment charges in the prior year relating to TOM FORD and Too Faced, combined, of $898 million and a goodwill impairment charge in the prior year relating to Too Faced of $13 million. Also contributing to the increase was the favorable year-over-year impact of the charge in fiscal 2025 associated with the Talcum litigation settlement agreements of $159 million and higher net sales. Partially offsetting the increase in operating results is the unfavorable impact of the securities class action litigation settlement charge in the fiscal 2026 third quarter and an increase in consumer-facing investments to help drive sales growth.

Reported operating income in EUKEM increased $51 million, or 35%, in fiscal 2026, reflecting higher net sales, partially offset by an increase in consumer-facing investments, including to support targeted expanded consumer reach, key campaigns and new product launches, and an increase in non-consumer-facing expenses, due in part to higher employee incentive costs.

Reported operating income in Asia/Pacific increased $643 million, or over 100%, in fiscal 2026, reflecting the favorable year-over-year impact of the other intangible asset impairment charge in the prior year relating to Dr.Jart+ of $375 million, higher net sales and a decrease in cost of sales, including net benefits from the PRGP.

Reported operating income in Mainland China increased $179 million, or 92%, in fiscal 2026, reflecting higher net sales, as well as the favorable year-over-year timing of recognition of local government subsidies in fiscal 2026, as well as the related impact of the change in policy in fiscal 2025. Partially offsetting the increase in operating income was an increase in consumer-facing investments, including to support key campaigns, new product launches and targeted expanded consumer reach.

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INTEREST AND INVESTMENT INCOME

Year Ended June 30,

Interest income and investment income, net $ 90 $ 114

Interest expense decreased in fiscal 2026, primarily reflecting a lower average debt balance and lower average interest rates compared to the prior year. Interest income and investment income, net decreased in fiscal 2026, primarily driven by lower average interest rates earned compared to the prior year, as well as the unfavorable year-over-year impact of impairments of cost method minority investments.

PROVISION FOR INCOME TAXES

The provision for income taxes represents U.S. federal, foreign, state and local income taxes. The effective rate differs from the federal statutory rate primarily due to the effect of state and local income taxes, the tax impact of stock-based compensation, the taxation of foreign income and changes in unrecognized tax benefits, as well as changes to valuation allowances based on our assessment of the realizability of deferred tax assets. Our effective tax rate will change from year to year based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes, unrecognized tax benefits, the tax impact of stock-based compensation, changes to valuation allowances, the interaction of various global tax strategies and the impact from certain acquisitions.

Year Ended June 30,

Earnings (loss) before income taxes: $ 517 $ (1,040)

As Reported:

Effective rate for income taxes 64.8 % (8.9) %

Basis-point change from prior year 7,370 (5,590)

Non-GAAP Financial Measure(1):

Effective rate for income taxes 35.7 % 38.8 %

(1)Excludes the net impact on the effective tax rates of charges associated with restructuring and other activities in both periods, the securities class action litigation settlement in fiscal 2026, and in fiscal 2025 also excludes the impact of the impairment of goodwill and other intangible assets, U.S. deferred tax asset valuation allowance adjustment and the Talcum litigation settlement agreements. See “Reconciliations of Non-GAAP Financial Measures” on page 44 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

The effective tax rate for fiscal 2026 increased approximately 7,370 basis points. The extent of the year over year change was broadly impacted by the loss before income taxes in fiscal 2025. The increase was primarily attributable to the higher effective tax rate on income from our foreign operations of approximately 5,630 basis points, due to our geographical mix of earnings, including the establishment of new valuation allowances on certain foreign deferred tax assets. Further contributing to the increase in the effective tax rate was the unfavorable impact of the One Big Beautiful Bill Act, resulting from an increase in tax deductible interest expense which reduced U.S. taxable income and increased the excess foreign tax credits generated which require a valuation allowance of approximately 1,010 basis points, changes in unrecognized tax benefits related to transfer pricing matters impacting multiple tax jurisdictions of approximately 820 basis points, as well as the unfavorable impact associated with previously issued U.S. stock-based compensation of approximately 590 basis points. The overall increase in the effective tax rate is partially offset by the favorable year-over-year utilization of U.S. general foreign tax credits net of the prior year establishment of a valuation allowance against U.S. general foreign tax credits and research and development tax credit carryforwards of approximately 550 basis points.

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

Year Ended June 30,

($ in millions, except per share data) 2026 2025

As Reported:

% Change from prior year 100+% (100+)%

Diluted net earnings (loss) per common share $ .50 $ (3.15)

% Change from prior year 100+% (100+)%

Non-GAAP Financial Measure(1):

(1)See “Reconciliations of Non-GAAP Financial Measures” on page 44 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

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RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

We use certain non-GAAP financial measures, among other financial measures, to evaluate our operating performance, which represent the manner in which we conduct and view our business. Management believes that excluding certain items that are not comparable from period to period, or do not reflect the Company’s underlying ongoing business, provides transparency for such items and helps investors and others compare and analyze our operating performance from period to period. In the future, we expect to incur charges or adjustments similar in nature to those presented below; however, the impact to the Company’s results in a given period may be highly variable and difficult to predict. Our non-GAAP financial measures may not be comparable to similarly titled measures used by, or determined in a manner consistent with, other companies. While we consider the non-GAAP measures useful in analyzing our results, they are not intended to replace, or act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP. The following tables present Net sales, Operating income (loss), Provision for income taxes and Diluted net earnings (loss) per common share adjusted to exclude the impact of charges associated with restructuring and other activities; the securities class action litigation settlement; impairment of goodwill and other intangible assets; U.S. deferred tax asset valuation allowance adjustment; the Talcum litigation settlement agreements; and the effects of foreign currency translation. The following tables provide reconciliations between these non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

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Year Ended June 30, % Change % Change in Constant Currency

($ in millions, except per share data) 2026 2025 Variance

Returns associated with restructuring and other activities 12 (3) 15

Charges associated with restructuring and other activities 823 486 337

Securities class action litigation settlement 84 — 84

Impairment of goodwill and other intangible assets — 1,286 (1,286)

Talcum litigation settlement agreements — 159 (159)

Effective rate for income taxes, as reported 64.8 % (8.9) %

Charges associated with restructuring and other activities 156 105 51

Securities class action litigation settlement 18 — 18

Impairment of goodwill and other intangible assets — 285 (285)

U.S. deferred tax asset valuation allowance adjustment — (172) 172

Talcum litigation settlement agreements — 35 (35)

Provision for income taxes, as adjusted $ 509 $ 346 $ 163 47 % 45 %

Effective rate for income taxes, as adjusted 35.7 % 38.8 %

Charges associated with restructuring and other activities 1.83 1.06 .77

Securities class action litigation settlement .18 — .18

Impairment of goodwill and other intangible assets — 2.78 (2.78)

U.S. deferred tax asset valuation allowance adjustment — .48 (.48)

Talcum litigation settlement agreements — .34 (.34)

As diluted net earnings per common share, as adjusted, is used as a measure of the Company’s performance, we consider the impact of current and deferred income taxes when calculating the per-share impact of each of the reconciling items.

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The following table reconciles the change in net sales by product category and geographic region, as reported, to the change in net sales excluding the effects of foreign currency translation:

As Reported

Year Ended June 30,

By Product Category:

Returns associated with restructuring and other activities (12) 3 (15) — (15)

By Geographic Region:

Returns associated with restructuring and other activities (12) 3 (15) — (15)

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The following table reconciles the change in operating results by product category and geographic region, as reported, to the change in operating results excluding the impact of the securities class action litigation settlement, impairment of goodwill and other intangible assets and the Talcum litigation settlement agreements:

Year Ended June 30,

By Product Category:

Charges associated with restructuring and other activities (823) (486)

By Geographic Region:

Charges associated with restructuring and other activities (823) (486)

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Fiscal 2025 as Compared with Fiscal 2024

See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 for the fiscal 2025 to fiscal 2024 comparative discussion for our net sales and operating results on a consolidated basis and by product category. Refer below for the fiscal 2025 to fiscal 2024 net sales and operating results by geographic region comparative discussion under the revised geographic region structure, effective July 1, 2025, as recast for comparability purposes.

NET SALES

Geographic Regions

Reported net sales for our geographic regions for the years ended June 30, 2025 and 2024 were as follows:

Year Ended June 30,

($ in millions) 2025 2024 $ Change % Change % Change in Constant Currency(2)

Returns associated with restructuring and other activities 3 (1) 4 100+ 100+

(1) The net sales from our travel retail business are included in the Asia/Pacific region.

(2) See “Reconciliations of Non-GAAP Financial Measures” beginning on page 50 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

Reported net sales decreased in fiscal 2025, primarily driven by lower net sales in our travel retail business, and to a lesser extent, in Mainland China, North America and Korea, combined, of approximately $1,150 million.

The decrease in net sales from our travel retail business was primarily driven by Asia travel retail, reflecting ongoing subdued sentiment and lower conversion from Chinese consumers, the difficult comparison to the prior year due to our resumption of replenishment orders in the second half of fiscal 2024 and our strategic decision to reduce our exposure to reseller activity, as well as retailer shifts in strategies toward more profitable duty-free business models in both Korea and mainland China, which led to lower replenishment orders.

The decrease in net sales in Mainland China reflected the overall challenging retail environment, including subdued consumer sentiment.

The decrease in net sales in North America reflected ongoing retail softness for some brands, and pressure from subdued consumer confidence and sentiment in the second half of fiscal 2025, which led to elevated inventory levels and destocking at certain retailers, as well as the timing of shipments, which further pressured net sales compared to the prior year. Partially offsetting the net sales decline for North America in fiscal 2025 was the impact from the launch of eleven brands in Amazon's U.S. Premium Beauty store as of June 2025 compared to three brands as of June 2024, as well as the launch of three brands in the Amazon.ca (Canada) Premium Beauty store in fiscal 2025.

The net sales decline in Korea reflects the impact of political and social unrest, which reduced retail traffic and dampened retail sales, as well as the exit of Dr.Jart+ from the travel retail channel in Korea during the fiscal 2025 second quarter.

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Reported net sales in The Americas decreased 4% in fiscal 2025, driven by the decrease from volume of 8% and the unfavorable impact from foreign currency translation of 1%. These decreases were partially offset by an increase from pricing of 6%, reflecting the favorable impact from strategic pricing actions and changes in mix. Reported net sales in EUKEM increased 1% in fiscal 2025, driven by the increase from pricing of 4%, reflecting the favorable impact from strategic pricing actions, partially offset by changes in mix, and the favorable impact from foreign currency translation of 1%. Partially offsetting these increases was the decrease from volume of 4%. Reported net sales in Asia/Pacific decreased 21% in fiscal 2025, driven by the decrease from volume of 20%. Also contributing to the decrease was a decrease from pricing of 1%, reflecting changes in mix partially offset by the favorable impact from strategic pricing actions, and the unfavorable impact from foreign currency translation of 1%. Reported net sales in Mainland China decreased 6% in fiscal 2025, driven by the decrease from volume of 9%. Partially offsetting this decrease was an increase from pricing of 4%, reflecting the favorable impact from strategic pricing actions and changes in mix.

OPERATING RESULTS

Geographic Regions

Reported operating (loss) income for our geographic regions for the years ended June 30, 2025 and 2024 were as follows:

Year Ended June 30,

(1)See “Reconciliations of Non-GAAP Financial Measures” beginning on page 50 for reconciliations between non-GAAP financial measures and the most directly comparable U.S. GAAP measures.

Reported operating results in The Americas decreased $986 million, or over 100%, in fiscal 2025, reflecting the unfavorable year-over-year impacts of other intangible asset impairment charges relating to TOM FORD and Too Faced, combined, of $898 million and a goodwill impairment charge relating to Too Faced of $13 million. Also contributing to the decrease in operating results were lower net sales and the unfavorable year-over-year impact of the charge in fiscal 2025 associated with the Talcum litigation settlement agreements of $159 million. Partially offsetting the decrease in operating results in The Americas was lower cost of sales and a decrease in non-consumer-facing expenses, which included net benefits of the PRGP.

Reported operating income in EUKEM increased $43 million, or 42%, in fiscal 2025, reflecting lower cost of sales, including net benefits from the PRGP, and higher net sales, partially offset by an increase in consumer-facing investments to drive sales.

Reported operating income in Asia/Pacific decreased $330 million, or 65%, in fiscal 2025, reflecting a decrease in net sales, partially offset by lower cost of sales and a decrease in non-consumer-facing expenses, which included net benefits of the PRGP as well as lower shipping expenses due to a decrease in net sales and the favorable year-over-year impact of $96 million in goodwill and other intangible asset impairment charges relating to Dr.Jart+.

Reported operating income in Mainland China decreased $120 million, or 38%, in fiscal 2025, reflecting lower net sales and the unfavorable year-over-year impact of a change in policy related to local government subsidies in China, partially offset by lower cost of sales.

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RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

The following table reconciles the change in net sales by geographic region, as reported, to the change in net sales excluding the effects of foreign currency translation:

As Reported

Year Ended June 30,

By Geographic Region:

Returns associated with restructuring and other activities 3 (1) 4 — 4

The following table reconciles the change in operating results by geographic region, as reported, to the change in operating results excluding the impact of the impairment of goodwill and other intangible assets, the Talcum litigation settlement agreements and the change in fair value of DECIEM acquisition-related stock options inclusive of payroll tax:

Year Ended June 30,

By Geographic Region:

Charges associated with restructuring and other activities (486) (124)

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FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our principal sources of funds historically have been cash flows from operations, borrowings pursuant to our commercial paper program, borrowings from the issuance of long-term debt and committed and uncommitted credit lines provided by banks and other lenders in the United States and abroad. At June 30, 2026, we had cash and cash equivalents of $3,498 million compared with $2,921 million at June 30, 2025. Our cash and cash equivalents are maintained at a number of financial institutions. To mitigate the risk of uninsured balances, we select financial institutions based on their credit ratings and financial strength, and we perform ongoing evaluations of these institutions to limit our concentration risk exposure.

Based on past performance and current expectations, we believe that cash on hand, cash generated from operations, available credit lines and access to credit markets will be adequate to support seasonal working capital needs, currently planned business operations, information technology enhancements, capital expenditures, acquisitions, dividends, stock repurchases, restructuring initiatives, commitments and other contractual obligations on both a near-term and long-term basis.

The Tax Cuts and Jobs Act resulted in the Transition Tax on unrepatriated earnings of our foreign subsidiaries and changed the tax law in ways that present opportunities to repatriate cash without additional U.S. federal income tax. We continue to analyze the permanent reinvestment assertion on our remaining applicable foreign earnings. We do not believe that continuing to reinvest these remaining applicable foreign earnings impairs our ability to meet our domestic debt or working capital obligations. If these reinvested earnings were repatriated into the United States as dividends, we would be subject to state income taxes and applicable foreign taxes in certain jurisdictions.

Tariffs negatively impacted our operating results during fiscal 2026 and we are continuing to monitor and assess the potential effects of changing tariff conditions globally.

Credit Ratings

Changes in our credit ratings will likely result in changes in our borrowing costs. Our credit ratings also impact the cost of our revolving credit facilities. Downgrades in our credit ratings may reduce our ability to issue commercial paper and/or long-term debt and would likely increase the relative costs of borrowing. A credit rating is not a recommendation to buy, sell, or hold securities, is subject to revision or withdrawal at any time by the assigning rating organization, and should be evaluated independently of any other rating. As of August 12, 2026, our long-term debt is rated A- with a negative outlook by Standard & Poor’s and A3 with a negative outlook by Moody’s.

Debt and Access to Liquidity

Total debt as a percent of total capitalization was 66% and 65% at June 30, 2026 and 2025, respectively.

For further information regarding our current and long-term debt and available financing, see Item 8. Financial Statements and Supplementary Data – Note 11 – Debt.

Cash Flows

Year Ended June 30,

Net cash provided by operating activities $ 1,773 $ 1,272

Net cash used for investing activities $ (489) $ (623)

Net cash used for financing activities $ (712) $ (1,144)

The change in net cash flows provided by operating activities was primarily driven by higher net earnings, excluding non-cash items, and the favorable change in operating assets and liabilities variances.

The change in net cash flows used for investing activities was primarily driven by a favorable year-over-year impact from lower capital expenditures compared to the prior year.

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The change in net cash flows used for financing activities primarily reflected a decrease in repayments of long-term debt due to the repayment of the outstanding principal balance of our $500 million, 2.000% Senior Notes that matured during the fiscal 2025 second quarter, a decrease in dividends paid to stockholders in the current year, and the favorable year-over-year impact of settlements of cross-currency swap contracts. These decreases were partially offset by payments of the remaining deferred consideration in the fiscal 2026 first and third quarters associated with the fiscal 2023 acquisition of TOM FORD.

See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 for the fiscal 2025 to fiscal 2024 comparative discussions.

Dividends

For a summary of quarterly cash dividends declared per share on our Class A and Class B Common Stock during the year ended June 30, 2026 and through August 12, 2026, see Item 8. Financial Statements and Supplementary Data – Note 17 – Common Stock.

Pension and Post-retirement Plan Funding

Several factors influence the annual funding requirements for our pension plans. For our domestic trust-based noncontributory qualified defined benefit pension plan (“U.S. Qualified Plan”), we seek to maintain appropriate funded percentages. For any future contributions to the U.S. Qualified Plan, we would seek to contribute an amount or amounts that would not be less than the minimum required by the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) and subsequent pension legislation, and would not be more than the maximum amount deductible for income tax purposes. For each international plan, our funding policies are determined by local laws and regulations. In addition, amounts necessary to fund future obligations under these plans could vary depending on estimated assumptions. The effect of our pension plan funding on future operating results will depend on economic conditions, employee demographics, mortality rates, the number of participants electing to take lump-sum distributions, investment performance and funding decisions.

For the U.S. Qualified Plan, we maintain an investment strategy of matching the duration of a substantial portion of the plan assets with the duration of the underlying plan liabilities. This strategy assists us in maintaining our overall funded ratio. For fiscal 2026 and 2025, we met or exceeded all contribution requirements under ERISA regulations for the U.S. Qualified Plan.

The following table summarizes actual and expected benefit payments and contributions for our other pension and post-retirement plans:

Year Ended June 30,

International defined benefit pension plan contributions $ 27 $ 32 $ 35

Post-retirement plan benefit payments $ 10 $ 10 $ 14

Commitments and Contingencies

For a discussion of our commitments and contingencies, see Item 8. Financial Statements and Supplementary Data – Note 16 – Commitments and Contingencies.

Contractual Obligations

For a discussion of our contractual obligations, see Item 8. Financial Statements and Supplementary Data – Note 16 – Commitments and Contingencies (Contractual Obligations).

Derivative Financial Instruments and Hedging Activities

For a discussion of our derivative financial instruments and hedging activities, see Item 8. Financial Statements and Supplementary Data – Note 12 – Derivative Financial Instruments.

Foreign Exchange Risk Management

For a discussion of foreign exchange risk management, see Item 8. Financial Statements and Supplementary Data – Note 12 – Derivative Financial Instruments (Fair value hedges, Cash Flow Hedges, Net Investment Hedges).

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Credit Risk

For a discussion of credit risk, see Item 8. Financial Statements and Supplementary Data – Note 12 – Derivative Financial Instruments (Credit Risk).

Market Risk

We address certain financial exposures through a controlled program of market risk management that includes the use of foreign currency forward contracts to reduce the effects of fluctuating foreign currency exchange rates and to mitigate the change in fair value of specific assets and liabilities on the balance sheet, anticipated transactions and the net investment in certain foreign operations. To perform a sensitivity analysis of our foreign currency forward contracts, we assess the change in fair values from the impact of hypothetical changes in foreign currency exchange rates. A hypothetical 10% weakening of the U.S. dollar against the foreign exchange rates for the currencies in our portfolio would have resulted in a net decrease in the fair value of our portfolio of approximately $164 million and $223 million as of June 30, 2026 and 2025, respectively. This potential change does not consider our underlying foreign currency exposures.

We also enter into cross-currency swap contracts to hedge the impact of foreign currency changes on certain intercompany foreign currency denominated debt and to hedge a portion of the net investment in certain foreign operations. A hypothetical 10% weakening of the U.S. dollar against the foreign exchange rates for the currencies in our cross-currency swap contracts would have resulted in a net decrease in the fair value of our cross-currency swap contracts of approximately $76 million and $85 million as of June 30, 2026 and 2025, respectively.

In addition, we enter into interest rate derivatives to manage the effects of interest rate movements on our funded indebtedness, including future debt issuances. Based on a hypothetical 100 basis point increase in interest rates, the estimated fair value of our interest rate derivatives would decrease by approximately $72 million and $43 million as of June 30, 2026 and 2025, respectively.

Our sensitivity analysis represents an estimate of reasonably possible net losses that would be recognized on our portfolio of derivative financial instruments assuming hypothetical movements in future market rates and is not necessarily indicative of actual results, which may or may not occur. It does not represent the maximum possible loss or any expected loss that may occur, since actual future gains and losses will differ from those estimated, based upon actual fluctuations in market rates, operating exposures, and the timing thereof, and changes in our portfolio of derivative financial instruments during the year. We believe, however, that any such loss incurred would be offset by the effects of market rate movements on the respective underlying transactions for which the derivative financial instrument was intended.

OFF-BALANCE SHEET ARRANGEMENTS

We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial condition or results of operations.

RECENTLY ISSUED ACCOUNTING STANDARDS

Refer to Item 8. Financial Statements and Supplementary Data – Note 2 – Summary of Significant Accounting Policies for discussion regarding the potential impact of accounting standards that were recently issued but not yet effective, on our consolidated financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of our financial condition at June 30, 2026 and our results of operations for the three fiscal years ended June 30, 2026 are based upon our consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in those financial statements. These estimates and assumptions can be subjective and complex and, consequently, actual results could differ from those estimates. We consider accounting estimates to be critical if the accounting estimate both (i) involves a significant level of estimation uncertainty, and (ii) has had or is reasonably likely to have a material impact on the Company's financial condition or results of operations. Our critical accounting policies relate to Goodwill and Other Indefinite-lived Intangible Assets – Impairment Assessment and Income Taxes.

Our management has discussed the selection of critical accounting policies and the effect of estimates with the Audit Committee of our Board of Directors.

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Goodwill and Other Indefinite-lived Intangible Assets – Impairment Assessment

Goodwill is calculated as the excess of the cost of purchased businesses over the estimated fair value of their underlying net assets. Other indefinite-lived intangible assets consist of trademarks. Goodwill and other indefinite-lived intangible assets are not amortized.

When testing goodwill for impairment, we have the option of first performing a qualitative assessment to determine whether it is more-likely-than-not that the estimated fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. The quantitative impairment test for goodwill encompasses calculating the estimated fair value of a reporting unit and comparing the estimated fair value to its carrying value. If the carrying value exceeds the estimated fair value, an impairment charge is recorded, up to the total amount of goodwill allocated to that reporting unit.

When testing other indefinite-lived intangible assets for impairment, we also have the option of first performing a qualitative assessment to determine whether it is more-likely-than-not that the other indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative test. The quantitative impairment test for other indefinite-lived intangible assets encompasses calculating the estimated fair value of an other indefinite-lived intangible asset and comparing the estimated fair value to its carrying value. If the carrying value exceeds the estimated fair value, an impairment charge is recorded.

We elected to perform the qualitative assessment for the goodwill in certain of our reporting units and for certain of our other indefinite-lived intangible assets. This qualitative assessment included the review of certain macroeconomic factors and entity-specific qualitative factors to determine if it was more-likely-than-not that the estimated fair values of the reporting units and other indefinite-lived intangible assets were below their carrying values. We considered macroeconomic factors including global economic growth, general macroeconomic trends for the markets in which the reporting units operate and the intangible assets are employed, and the growth of the global prestige beauty industry. In addition to these macroeconomic factors, among other things, we considered current results and forecasts for the respective reporting units and brands, any changes in the nature of the business, any significant legal, regulatory, contractual, political or other business climate factors, changes in the industry/competitive environment, changes in the composition or carrying amount of net assets and the Company's intention to sell or dispose of a reporting unit or cease the use of a trademark.

A quantitative assessment was performed for the goodwill in certain of our reporting units and for certain of our other indefinite-lived intangible assets. We engaged third-party valuation specialists and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management. To determine the estimated fair value of the reporting units, we used an equal weighting of the income and market approaches. Under the income approach, we determined the estimated fair value using a discounted cash flow method, projecting future cash flows of each reporting unit, as well as a terminal value, and discounting such cash flows at a rate of return that reflected the relative risk of the cash flows. Under the market approach, we utilized market multiples from publicly traded companies with similar operating and investment characteristics as the reporting unit. The significant assumptions used in each quantitative assessment using these two approaches include revenue growth rates and profit margins, a terminal value, a weighted average cost of capital used to discount future cash flows and comparable market multiples for the reporting unit. To determine the estimated fair value of other indefinite-lived intangible assets, we used an income approach, specifically the relief-from-royalty method. This method assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to obtain the rights to use the comparable asset. The significant assumptions used in each quantitative assessment using this approach include revenue growth rates and profit margins, a terminal value, a weighted average cost of capital used to discount future cash flows and a royalty rate.

For further discussion of the methods used and factors considered in our estimates as part of the impairment testing for goodwill and other indefinite-lived intangible assets, see Item 8. Financial Statements and Supplementary Data – Note 2 – Summary of Significant Accounting Policies and Note 5 – Goodwill and Other Intangible Assets.

Income Taxes

We calculate and provide for income taxes in each tax jurisdiction in which we operate. As the application of various tax laws relevant to our global business is often uncertain, significant judgment is required in determining our annual tax expense and in evaluating our tax positions. The provision for income taxes includes the amounts payable or refundable for the current year, the effect of deferred taxes and impacts from uncertain tax positions.

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We recognize deferred tax assets and liabilities for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis, net operating losses, tax credit and other carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates when the assets and liabilities are expected to be realized or settled. We regularly review deferred tax assets for realizability and establish valuation allowances based on available evidence including historical operating losses, projected future taxable income, expected timing of the reversals of existing temporary differences, and appropriate tax planning strategies. If our assessment of the realizability of a deferred tax asset changes, an increase to a valuation allowance will result in a reduction of net earnings at that time, while the reduction of a valuation allowance will result in an increase of net earnings at that time.

We provide uncertain tax position reserves for U.S. federal, state, local and foreign tax exposures relating to periods subject to audit. The development of these reserves requires judgments about tax issues, potential outcomes and timing, and is a subjective critical estimate. We assess our tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting dates. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon settlement with a tax authority that has full knowledge of all relevant information. For those tax positions where it is more-likely-than-not that a tax benefit will not be sustained, no tax benefit has been recognized in the consolidated financial statements. We classify applicable interest and penalties as a component of the provision for income taxes. Although the outcome relating to these exposures is uncertain, in our opinion adequate provisions for income taxes have been made for estimable potential liabilities emanating from these exposures. If actual outcomes differ materially from these estimates, they could have a material impact on our consolidated net earnings.

For further discussion of Income Taxes, see Item 8. Financial Statements and Supplementary Data – Note 2 – Summary of Significant Accounting Policies and Note 8 – Income Taxes.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

We and our representatives from time to time make written or oral forward-looking statements, including in this and other filings with the Securities and Exchange Commission, in our press releases and in our reports to stockholders, which 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 “expect,” “will,” “will likely result,” “would,” “believe,” “estimate,” “planned,” “plans,” “intends,” “may,” “should,” “could,” “anticipate,” “estimate,” “project,” “projected,” “forecast,” and “forecasted” or similar expressions. Although we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, actual results may differ materially from our expectations. Factors that could cause actual results to differ from expectations include, without limitation:

(1)increased competitive activity from companies in the skin care, makeup, fragrance and hair care businesses;

(2)our ability to develop, produce and market new products on which future operating results may depend and to successfully address challenges in our business;

(3)consolidations, restructurings, bankruptcies and reorganizations in the retail industry causing a decrease in the number of stores that sell our products, an increase in the ownership concentration within the retail industry, ownership of retailers by our competitors or ownership of competitors by our customers that are retailers and our inability to collect receivables;

(4)destocking and tighter working capital management by retailers;

(5)the success, or changes in timing or scope, of new product launches and the success, or changes in timing or scope, of advertising, sampling and merchandising programs;

(6)shifts in the preferences of consumers as to how they perceive value and where and how they shop;

(7)social, political and economic risks to our 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;

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(8)changes in the laws, regulations and policies (including the interpretations and enforcement thereof) that affect, or will affect, our business, including those relating to our 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 we may take as a result;

(9)foreign currency fluctuations affecting our results of operations and the value of our foreign assets, the relative prices at which we and our foreign competitors sell products in the same markets and our operating and manufacturing costs outside of the United States;

(10)changes in global or local conditions, including those due to volatility in the global credit and equity markets, government economic policies, natural or man-made disasters, real or perceived epidemics, supply chain challenges, inflation, or increased energy costs, that could affect consumer purchasing, the willingness or ability of consumers to travel and/or purchase our products while traveling, the financial strength of our customers, suppliers or other contract counterparties, our operations, the cost and availability of capital which we may need for new equipment, facilities or acquisitions, the returns that we are able to generate on our pension assets and the resulting impact on funding obligations, the cost and availability of raw materials and the assumptions underlying our critical accounting estimates;

(11)shipment delays, commodity pricing, depletion of inventory and increased production costs resulting from disruptions of operations at any of the facilities that manufacture our products or at our distribution or inventory centers, including disruptions that may be caused by the implementation of information technology initiatives, or by restructurings;

(12)real estate rates and availability, which may affect our ability to increase or maintain the number of retail locations at which we sell our products and the costs associated with our other facilities;

(13)changes in product mix to products which are less profitable;

(14)our ability to acquire, develop or implement new information technology, including operational technology and websites, on a timely basis and within our cost estimates; to maintain continuous operations of our new and existing information technology; and to secure the data and other information that may be stored in such technologies or other systems or media;

(15)our 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;

(16)consequences 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;

(17)the timing and impact of acquisitions, investments and divestitures; and

(18)additional factors as described in our filings with the Securities and Exchange Commission, including this Annual Report on Form 10-K for the fiscal year ended June 30, 2026.

We assume no responsibility to update forward-looking statements made herein or otherwise.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The information required by this item is set forth in Item 7 of this Annual Report on Form 10-K under the caption Liquidity and Capital Resources – Market Risk and is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.

The information required by this item appears beginning on page F-1 of this Annual Report on Form 10-K and is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. The Chief Executive Officer and the Chief Financial Officer, with assistance from other members of management, have evaluated the effectiveness of our disclosure controls and procedures, and, based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of June 30, 2026.

As part of our review of internal control over financial reporting, we make changes to systems and processes to improve such controls and increase efficiencies, while ensuring that we maintain an effective internal control environment. There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of fiscal 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s report on internal control over financial reporting and the report of independent registered public accounting firm on our internal control over financial reporting are incorporated herein from pages F-2 and F-3, respectively.

Item 9B. Other Information.

Trading Arrangements

During the fiscal 2026 fourth quarter, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408(a) of Regulation S-K under the Exchange Act.

Disclosure Required Pursuant to Section 13(r) of the Securities Exchange Act of 1934

During the fiscal 2026 fourth quarter, the Company made payments of five hundred and twenty-nine U.S. dollars to maintain its intellectual property rights in Iran, as part of its intellectual property protection efforts, under a specific license granted by the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC). The Company does not generate any revenues or profits from this activity, and plans to continue these activities, as authorized under the specific license. These trademarks are registered with the Intellectual Property Center of the Islamic Republic of Iran (IPC) through intellectual property counsel and service providers located in the United Arab Emirates and Iran. The payments were made to IPC at its account at the Central Bank of Iran, which was designated by OFAC as sanctioned under its counterterrorism authority pursuant to Executive Order 13224 on September 20, 2019.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item, not already provided herein under Item 1. Business – Information about our Executive Officers, will be included in our Proxy Statement for the 2026 Annual Meeting of Stockholders (the “2026 Proxy Statement”). The 2026 Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, 2026 and such information is incorporated herein by reference.

The Company has an insider trading policy which governs the purchase, sale, and/or other dispositions of our securities (and related derivative securities) by directors, officers and employees and other covered persons and is designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of our Securities Trading Policy is included as Exhibit 19.1 to this Annual Report on Form 10-K.

Item 11. Executive Compensation.

The information required by this Item will be included in the 2026 Proxy Statement. The 2026 Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, 2026 and such information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item, not already provided under Equity Compensation Plan Information as set forth below, will be included in the 2026 Proxy Statement. The 2026 Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, 2026 and such information is incorporated herein by reference.

Equity Compensation Plan Information

The following table summarizes the equity compensation plans under which our securities may be issued as of June 30, 2026 and does not include grants made or cancelled and options exercised after such date. The securities that may be issued consist solely of shares of our Class A Common Stock and all plans were approved by stockholders of the Company.

Equity Compensation Plan Information as of June 30, 2026

(1)Includes the Amended and Restated Fiscal 2002 Share Incentive Plan (the “2002 Plan”) and the Amended and Restated Non-Employee Director Share Incentive Plan (the “Director Plan”).

(2)Consists of 8,646,747 shares issuable upon exercise of outstanding options, 5,460,285 shares issuable upon conversion of outstanding Restricted Stock Units, 795,633 shares issuable upon conversion of outstanding Performance Share Units (“PSUs”) (assuming maximum payout for unvested PSUs, including those pending approval by the Stock Plan Subcommittee of our Board of Directors), and 94,132 shares issuable upon conversion of Share Units.

(3)Calculated based upon outstanding options in respect of 8,646,747 shares of our Class A Common Stock.

(4)The 2002 Plan authorizes the grant of shares and benefits other than stock options. As of June 30, 2026, there were 11,462,646 shares of Class A Common Stock available for issuance under the 2002 Plan (assuming maximum payout for unvested PSUs, including those pending approval by the Stock Plan Subcommittee of our Board of Directors). Shares underlying grants cancelled or forfeited under prior plans or agreements may be used for grants under the 2002 Plan. The Director Plan currently provides for an annual grant of options and stock units to non-employee directors. As of June 30, 2026, there were 295,214 shares available for issuance under the Director Plan.

If all of the outstanding options, warrants, rights, stock units and share units, as well as the securities available for future issuance, included in the first and third columns in the table above were converted to shares of Class A Common Stock as of June 30, 2026, the total shares of Common Stock outstanding (i.e. Class A plus Class B) would increase 7% to 388,553,224. Of the outstanding options to purchase 8,646,747 shares of Class A Common Stock, options to purchase 87,460 shares have an exercise price less than $78.95, the closing price on June 30, 2026. Assuming the exercise of only in-the-money options, the total shares outstanding would increase by less than 1% to 361,886,027.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

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Item 14. Principal Accounting Fees and Services.

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PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)1 and 2. Financial Statements and Schedules - See index on Page F-1.

3. Exhibits:

ExhibitNumber Description

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ExhibitNumber Description

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ExhibitNumber Description

10.12 Employment Agreement with Roberto Canevari.†

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ExhibitNumber Description

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ExhibitNumber Description

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ExhibitNumber Description

21.1 List of subsidiaries.

23.1 Consent of PricewaterhouseCoopers LLP.

24.1 Power of Attorney.

____________________

* Incorporated herein by reference.

† Exhibit is a management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE ESTÉE LAUDER COMPANIES INC.

By /s/ AKHIL SHRIVASTAVA

Akhil ShrivastavaExecutive Vice Presidentand Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

Signature Title (s) Date

Stéphane de La Faverie

CHARLENE BARSHEFSKY* Director August 19, 2026

Charlene Barshefsky

PAUL J. FRIBOURG* Director August 19, 2026

Paul J. Fribourg

JENNIFER HYMAN* Director August 19, 2026

Jennifer Hyman

GARY M. LAUDER* Director August 19, 2026

Gary M. Lauder

JANE LAUDER* Director August 19, 2026

Jane Lauder

WILLIAM P. LAUDER* Chair of the Board August 19, 2026

William P. Lauder

ANNABELLE YU LONG* Director August 19, 2026

Annabelle Yu Long

ARTURO NUÑEZ* Director August 19, 2026

Arturo Nuñez

BARRY S. STERNLICHT* Director August 19, 2026

Barry S. Sternlicht

DANA STRONG* Director August 19, 2026

Dana Strong

JENNIFER TEJADA* Director August 19, 2026

Jennifer Tejada

RICHARD F. ZANNINO* Director August 19, 2026

Richard F. Zannino

ERIC L. ZINTERHOFER* Director August 19, 2026

Eric L. Zinterhofer

Akhil Shrivastava

___________________________________________

* By signing his name hereto, Akhil Shrivastava signs this document in the capacities indicated above and on behalf of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed herewith.

By /s/ AKHIL SHRIVASTAVA

Akhil Shrivastava(Attorney-in-Fact)

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THE ESTÉE LAUDER COMPANIES INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Financial Statements:

Management’s Report on Internal Control Over Financial Reporting F- 2

Consolidated Statements of Earnings (Loss) F- 5

Consolidated Statements of Comprehensive Income (Loss) F- 6

Consolidated Balance Sheets F- 7

Consolidated Statements of Equity and Redeemable Noncontrolling Interest F- 8

Consolidated Statements of Cash Flows F- 9

Notes to Consolidated Financial Statements F- 10

Financial Statement Schedule:

Schedule II - Valuation and Qualifying Accounts S- 1

All other schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.

F-1

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Management’s Report on Internal Control over Financial Reporting

Management of The Estée Lauder Companies Inc. (including its subsidiaries) (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended).

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision of and with the participation of the Chief Executive Officer and the Chief Financial Officer, the Company’s management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework and criteria established in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, the Company’s management has concluded that, as of June 30, 2026, the Company’s internal control over financial reporting was effective.

The effectiveness of the Company’s internal control over financial reporting as of June 30, 2026 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under the heading “Report of Independent Registered Public Accounting Firm.”

/s/ Stéphane de La Faverie /s/ Akhil Shrivastava

Stéphane de La Faverie Akhil Shrivastava

August 19, 2026

F-2

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of The Estée Lauder Companies Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of The Estée Lauder Companies Inc. and its subsidiaries (the “Company”) as of June 30, 2026 and 2025, and the related consolidated statements of earnings (loss), of comprehensive income (loss), of equity and redeemable noncontrolling interest and of cash flows for each of the three years in the period ended June 30, 2026, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended June 30, 2026 appearing on page S-1 (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-3

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Other Indefinite-Lived Intangible Asset Impairment Assessments – Certain Trademarks

As described in Notes 2 and 5 to the consolidated financial statements, the Company’s consolidated other indefinite-lived intangible assets balance was $3,081 million as of June 30, 2026, a significant portion of which related to certain trademarks. Management assesses other indefinite-lived intangible assets at least annually for impairment as of the beginning of the fiscal fourth quarter or more frequently if certain events or circumstances exist. As disclosed by management, based on the results of these assessments, no impairment charges were recorded. The estimated fair value of other indefinite-lived intangible assets was determined by management using an income approach, specifically the relief-from-royalty method. The significant assumptions used in each quantitative assessment using this approach include revenue growth rates and profit margins, a terminal value, a weighted average cost of capital used to discount future cash flows, and a royalty rate.

The principal considerations for our determination that performing procedures relating to the other indefinite-lived intangible asset impairment assessments of certain trademarks is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of certain trademarks; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, weighted average cost of capital, and royalty rate, as applicable to the trademark; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s other indefinite-lived intangible asset impairment assessments, including controls over the valuation of certain trademarks. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of certain trademarks; (ii) evaluating the appropriateness of the relief-from-royalty method used by management; (iii) testing the completeness and accuracy of the underlying data used in the relief-from-royalty method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, weighted average cost of capital, and royalty rate, as applicable to the trademark. Evaluating management’s assumption related to revenue growth rates involved evaluating whether the assumption was reasonable considering (i) the current and past performance of the business; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief-from-royalty method and (ii) the reasonableness of the weighted average cost of capital and royalty rate assumptions, as applicable to the trademark.

/s/ PricewaterhouseCoopers LLP

New York, New York

We have served as the Company’s auditor since 2020.

F-4

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THE ESTÉE LAUDER COMPANIES INC.

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

Year Ended June 30,

Operating expenses

Securities class action litigation settlement 84 — —

Goodwill impairment — 13 291

Impairment of other intangible assets — 1,273 180

Talcum litigation settlement agreements — 159 —

Interest income and investment income, net 90 114 167

EL US Equity

EL · 10-K · period ended 2026-06-30

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accounting Fees and Services.

Item 15. Exhibits, Financial Statement Schedules.

Item 16. Form 10-K Summary.

EL US Equity☆

EL · 10-K · period ended 2026-06-30

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accounting Fees and Services.

Item 15. Exhibits, Financial Statement Schedules.

Item 16. Form 10-K Summary.

EL US Equity