01—Abstract
Summary
Summary of the 8-K/A filed August 1, 2025. Cited figures are marked; the original filing is the authoritative source.
The Estée Lauder Companies Inc. filed this Item 2.05 disclosure to update its Restructuring Program, a component of its Profit Recovery and Growth Plan (PRGP) launched on November 1, 2023 to rebuild profit margins in fiscal years 2025 and 2026.
The Company expanded the program in February 2025, and it now expects restructuring and other charges of $1,200 million to $1,600 milliona (before tax) in total. The Company expects to record cumulative charges of approximately $747 million (before tax) for initiatives approved from the program's inception through July 30, 2025, of which $623 million was approved through April 24, 2025 and $124 million from April 25 through July 30, 2025. The newly approved initiatives cover Value Chain Optimization, Enabling Function Re-Invention, and the Future of Brand-led Model, with the primary cost being employee severance from net workforce reductions.
The Company also approved incremental costs for its Project Management Office. Of the $747 millionb cumulative charges, $583 million is recorded in operating expenses and $150 million is classified as other charges, while $539 million consists of employee-related costs. Apart from non-cash charges, the Company expects these charges to result in future cash expenditures funded by cash from operations.
The Company stated that initiatives under the expanded program are to be approved by the end of fiscal 2026 and substantially completed by the end of fiscal 2027. It will file further disclosures for individually or collectively significant initiatives once it can make good-faith estimates of costs by type and future cash expenditures.
02—Key points
Key Highlights
- Total expected restructuring and other charges under the expanded Restructuring Program are $1,200 million to $1,600 million (before tax).
- Cumulative charges approved through July 30, 2025 total $747 million (before tax), including $124 million approved between April 25 and July 30, 2025.
- Of the $747 million, $583 million is recorded in operating expenses and $150 million is other charges; restructuring charges include $539 million of employee-related costs.
- New initiatives approved after April 24, 2025 are Value Chain Optimization, Enabling Function Re-Invention, and the Future of Brand-led Model, primarily involving employee severance from net workforce reductions.
- Incremental Project Management Office costs, including internal employee costs and consulting services, were approved.
- Initiatives are to be approved by the end of fiscal 2026 and substantially completed by the end of fiscal 2027.
- Apart from non-cash charges, the charges are expected to result in future cash expenditures funded from cash provided by operations.
03—Questions
Frequently Asked Questions
How large are the total restructuring costs expected under the Restructuring Program?
The Company estimates restructuring and other charges to implement the program's initiatives will total between $1,200 million and $1,600 million (before tax).
How much of those charges has been approved so far?
Through July 30, 2025, the Company had approved cumulative charges of $747 million (before tax), which includes $623 million approved through April 24, 2025 and $124 million approved from April 25 through July 30, 2025.
What types of costs make up the approved charges?
Of the $583 million in cumulative restructuring charges, $539 million is employee-related costs, $18 million is asset-related costs, $3 million is contract terminations, and $23 million is other exit costs. Separately, $150 million is recorded as other charges, and $4 million relates to sales returns, $10 million to cost of sales.
What new initiatives did the Company approve after April 24, 2025?
The Company approved Value Chain Optimization, Enabling Function Re-Invention, and the Future of Brand-led Model, each primarily resulting in employee severance through net workforce reductions, plus incremental Project Management Office costs.
When will the Restructuring Program be completed, and will there be further disclosures?
The Company expects all initiatives to be approved by the end of fiscal 2026 and specific initiatives to be substantially completed by the end of fiscal 2027. It will file additional disclosures for initiatives that are individually or collectively significant once it can make good-faith estimates of costs by type and future cash expenditures.
04—Continue