Why did the company report an operating loss and a net loss for fiscal 2025?

The reported operating loss of $785 million reflected goodwill and other intangible asset impairment charges, restructuring and other charges, and $159 million of talcum litigation settlement charges. The filing attributes the impairments mainly to TOM FORD, Too Faced and Dr.Jart+, and the company recorded a $172 million U.S. deferred tax asset valuation allowance that also weighed on results.

What is the company's outlook for fiscal 2026?

The company expects reported net sales growth of 2% to 5% and organic net sales growth of 0% to 3%, with adjusted diluted EPS of $1.90 to $2.10 and an adjusted operating margin of 9.4% to 9.9%. The outlook assumes a return to modest growth in global travel retail at the midpoint, mid-single-digit growth in mainland China, and about $100 million of profitability headwind from enacted tariffs net of mitigation.

How much cash did the business generate, and what is expected in fiscal 2026?

Net cash flows provided by operating activities were $1.27 billion in fiscal 2025, down from $2.36 billion. For fiscal 2026, the company expects operating cash flow of $1.0 billion to $1.1 billion, reflecting higher restructuring payments expected to peak in fiscal 2026, and capital expenditures of about 4% of projected sales.

What is the status and expected cost of the restructuring program?

The restructuring program is expected to produce $1.2 billion to $1.6 billion in pre-tax charges and $0.8 billion to $1.0 billion in annual gross benefits. As of June 30, 2025, cumulative charges were $610 million; as of August 13, 2025, approved initiatives totaled $747 million in cumulative charges and a net reduction of over 3,200 positions.

Will the dividend change?

The company announced a quarterly dividend of $.35 per share, payable September 16, 2025. The filing notes that the company reduced its dividend in the fiscal 2025 second quarter to a more appropriate payout ratio, and fiscal 2025 dividends paid totaled $618 million compared with $947 million in fiscal 2024.

EL 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 20, 2025. Cited figures are marked; the original filing is the authoritative source.

The Estée Lauder Companies Inc. reported results for its fiscal year ended June 30, 2025, with net sales of $14.33 billion^a (14,326 million), down 8% from $15.61 billion, and organic net sales also down 8%.

Reported operating loss was $785 million^b, compared with operating income of $970 million the prior year, driven by $815 million of incremental goodwill and other intangible asset impairment charges, $362 million of higher restructuring and other charges, and $159 million of talcum litigation settlement charges. Adjusted operating income fell 28% to $1.15 billion, with adjusted operating margin at 8.0% versus 10.2%. Reported diluted net loss per share was $(3.15), compared with diluted earnings of $1.08, while adjusted diluted EPS was $1.51 versus $2.59.

For the fourth quarter, reported net sales fell 12% to $3.41 billion^c and organic net sales declined 13%, with the Skin Care and Makeup categories leading the decline and travel retail weakness cited as a key driver. Cash flow from operations declined to $1.27 billion from $2.36 billion, and capital expenditures fell to $602 million. The company affirmed its fiscal 2026 outlook, forecasting reported net sales growth of 2% to 5% and organic growth of 0% to 3%, adjusted EPS of $1.90 to $2.10, and an adjusted operating margin of 9.4% to 9.9%.

It also announced a quarterly dividend of $.35 per share, payable September 16, 2025, and reorganized its geographic reporting into four regions starting in fiscal 2026. The filing's Item 2.02 incorporates a press release (Exhibit 99.1) as the substantive disclosure of these results, and the restructuring program under the Profit Recovery and Growth Plan now carries expected charges of $1.2 billion to $1.6 billion^d, with annual gross benefits of $0.8 billion to $1.0 billion.

02—Key points

Key Highlights

Fiscal 2025 net sales of $14.33 billion, down 8%; organic net sales also down 8%, with declines across all geographic regions.
Reported operating loss of $785 million, versus operating income of $970 million, reflecting $1.29 billion in impairment charges in fiscal 2025 (TOM FORD, Too Faced, Dr.Jart+ and others) and $159 million in talcum litigation settlement charges.
Adjusted operating margin contracted to 8.0% from 10.2%; adjusted diluted EPS fell to $1.51 from $2.59.
Adjusted gross margin expanded to 74.0% from 71.7%, driven by Profit Recovery and Growth Plan benefits, lower excess and obsolescence, and strategic pricing.
Fiscal 2026 outlook: reported net sales growth of 2% to 5%, organic growth of 0% to 3%, adjusted EPS of $1.90 to $2.10, and adjusted operating margin of 9.4% to 9.9%.
Restructuring program under the expanded PRGP now expects charges of $1.2 billion to $1.6 billion, before taxes, and annual gross benefits of $0.8 billion to $1.0 billion, with 5,800 to 7,000 net position reductions.
Quarterly dividend of $.35 per share declared, payable September 16, 2025, to holders of record on September 2, 2025; fiscal 2025 dividends paid totaled $618 million versus $947 million.

03—Questions

Frequently Asked Questions

Why did the company report an operating loss and a net loss for fiscal 2025?
The reported operating loss of $785 million reflected goodwill and other intangible asset impairment charges, restructuring and other charges, and $159 million of talcum litigation settlement charges. The filing attributes the impairments mainly to TOM FORD, Too Faced and Dr.Jart+, and the company recorded a $172 million U.S. deferred tax asset valuation allowance that also weighed on results.
What is the company's outlook for fiscal 2026?
The company expects reported net sales growth of 2% to 5% and organic net sales growth of 0% to 3%, with adjusted diluted EPS of $1.90 to $2.10 and an adjusted operating margin of 9.4% to 9.9%. The outlook assumes a return to modest growth in global travel retail at the midpoint, mid-single-digit growth in mainland China, and about $100 million of profitability headwind from enacted tariffs net of mitigation.
How much cash did the business generate, and what is expected in fiscal 2026?
Net cash flows provided by operating activities were $1.27 billion in fiscal 2025, down from $2.36 billion. For fiscal 2026, the company expects operating cash flow of $1.0 billion to $1.1 billion, reflecting higher restructuring payments expected to peak in fiscal 2026, and capital expenditures of about 4% of projected sales.
What is the status and expected cost of the restructuring program?
The restructuring program is expected to produce $1.2 billion to $1.6 billion in pre-tax charges and $0.8 billion to $1.0 billion in annual gross benefits. As of June 30, 2025, cumulative charges were $610 million; as of August 13, 2025, approved initiatives totaled $747 million in cumulative charges and a net reduction of over 3,200 positions.
Will the dividend change?
The company announced a quarterly dividend of $.35 per share, payable September 16, 2025. The filing notes that the company reduced its dividend in the fiscal 2025 second quarter to a more appropriate payout ratio, and fiscal 2025 dividends paid totaled $618 million compared with $947 million in fiscal 2024.

04—Continue

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