Estée Lauder (EL) 10-K risk factor changes: FY2022 vs FY2021

If our reputation is adversely affected, our ability to attract and retain [removed: customers and] [added: customers,] consumers [added: and employees] could be impacted.

Our inability to continue to compete effectively in key countries around the world [added: (e.g., China)] could have a material adverse effect on our business.

In addition, from time to time, sales growth or profitability may be concentrated in a relatively small number of our brands, channels or [removed: countries.][added: countries (e.g., China).]

If such a situation persists or [removed: a number of] [added: one or more] brands, channels or countries [removed: fail] [added: fails] to perform as expected, there could be a material adverse effect on our business.

In [added: certain] key markets, such as the United States, we have seen a [added: longer-term] decline in retail traffic in our department store customers and in our freestanding stores.

Achieving our long-term strategy will require investment in new capabilities, brands, categories, distribution channels, supply chain facilities, technologies and emerging and more mature geographic [removed: markets.][added: markets (e.g., China).]

There is an increased focus from certain investors, customers, consumers, [added: regulators,] employees, and other stakeholders concerning social impact and sustainability [added: and other ESG] matters.

Moreover, the standards by which [removed: citizenship and sustainability] [added: ESG] efforts and related matters are measured are developing and evolving, and certain areas are subject to assumptions that could change over time.

Any such matters, or related [removed: social impact and sustainability] [added: ESG] matters, could have a material adverse effect on our business.

Additionally, we continue to monitor the effects of the global macroeconomic environment; social, political and human rights issues; regulatory matters, including the imposition of [removed: tariffs;] [added: tariffs or sanctions;] geopolitical tensions; and global security issues.

We operate on a global basis, with a [added: substantial] majority of our fiscal [removed: 2021] [added: 2022] net sales and operating income generated outside the United States.

Our global operations are subject to many risks and uncertainties, including: (i) fluctuations in foreign currency exchange rates and the relative costs of operating in different places, which can affect our results of operations, the value of our foreign assets, the relative prices at which we and competitors sell products in the same markets, the cost of certain inventory and non-inventory items required in our operations, and the relative prices at which we sell our products in different markets; (ii) foreign or U.S. laws, regulations and policies, including restrictions on trade, immigration and travel, operations, and investments; currency exchange controls; restrictions on imports and exports, including license requirements; tariffs; [added: sanctions;] and taxes; (iii) lack of well-established or reliable legal and administrative systems in certain countries in which we operate; (iv) adverse weather conditions and natural disasters; [removed: and] (v) [added: concentration of sales growth or profitability in one or more countries (e.g., China); and (vi)] social, economic and geopolitical conditions, such as a pandemic, terrorist attack, war or other military action.

As a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes, capacity constraints, disruptions in ingredient, material or packaging supply, as well as global shortages, disruptions in supply chain or information technology, loss or impairment of key manufacturing [added: or distribution] sites or suppliers, product quality control, safety, increase in commodity prices and energy costs, licensing requirements and other regulatory issues, as well as natural disasters and other external factors over which we have no control.

These changes include accounting standards, [added: as well as] laws and regulations relating to tax matters, [removed: trade,] [added: trade (including sanctions),] data privacy (e.g., General Data Protection Regulation (GDPR)), [added: cybersecurity,] anti-corruption, advertising, marketing, manufacturing, distribution, customs matters, product registration, ingredients, chemicals, packaging, selective distribution, [added: and] environmental or climate change matters.

We are, and may in the future become, party to litigation, other disputes or regulatory proceedings across a wide range of matters, including ones relating to [added: product liability matters (including asbestos-related claims), advertising, regulatory,] employment, [added: intellectual property,] real estate, environmental, [removed: regulatory, advertising,] trade relations, [removed: tax, privacy] [added: tax] and [removed: product liability matters (including asbestos-related claims).][added: privacy.]

As of August [removed: 20, 2021,] [added: 17, 2022,] members of the Lauder family beneficially own, directly or indirectly, shares of the Company’s Class A Common Stock (with one vote per share) and Class B Common Stock (with 10 votes per share) having approximately [removed: 85%] [added: 84%] of the outstanding voting power of the Common Stock.

The following table is a comparative summary of operating results for fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] and reflects the basis of presentation described in *Item 8.

| (In millions) | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Skin Care | | | | | | $ | [removed: 9,484] [added: 9,886] | | | | | $ | [removed: 7,382] [added: 9,484] | | | | | $ | [removed: 6,551] [added: 7,382] | |

| Makeup | | | | | | [removed: 4,203] [added: 4,667] | | | | | | [removed: 4,794] [added: 4,203] | | | | | | [removed: 5,860] [added: 4,794] | | |

| Fragrance | | | | | | [removed: 1,926] [added: 2,508] | | | | | | [removed: 1,563] [added: 1,926] | | | | | | [removed: 1,802] [added: 1,563] | | |

| Hair Care | | | | | | [removed: 571] [added: 631] | | | | | | [removed: 515] [added: 571] | | | | | | [removed: 584] [added: 515] | | |

| Other | | | | | | [removed: 45] [added: 49] | | | | | | [removed: 40] [added: 45] | | | | | | [removed: 69] [added: 40] | | |

| | | | | | | [removed: 16,229] [added: 17,741] | | | | | | [removed: 14,294] [added: 16,229] | | | | | | [removed: 14,866] [added: 14,294] | | |

| Returns associated with restructuring and other activities | | | | | | [removed: (14)] [added: (4)] | | | | | | [removed: —] [added: (14)] | | | | | | [removed: (3)] [added: —] | | |

| Net sales | | | | | | $ | [removed: 16,215] [added: 17,737] | | | | | $ | [removed: 14,294] [added: 16,215] | | | | | $ | [removed: 14,863] [added: 14,294] | |

| The Americas | | | | | | $ | [removed: 3,797] [added: 4,623] | | | | | $ | [removed: 3,794] [added: 3,797] | | | | | $ | [removed: 4,741] [added: 3,794] | |

| Europe, the Middle East & Africa | | | | | | [removed: 6,946] [added: 7,681] | | | | | | [removed: 6,262] [added: 6,946] | | | | | | [removed: 6,452] [added: 6,262] | | |

| Asia/Pacific | | | | | | [removed: 5,486] [added: 5,437] | | | | | | [removed: 4,238] [added: 5,486] | | | | | | [removed: 3,673] [added: 4,238] | | |

| Skin Care | | | | | | $ | [removed: 3,036] [added: 2,753] | | | | | $ | [removed: 2,125] [added: 3,036] | | | | | $ | [removed: 1,925] [added: 2,125] | |

| Makeup | | | | | | [removed: (384)] [added: 133] | | | | | | [removed: (1,438)] [added: (384)] | | | | | | [removed: 438] [added: (1,438)] | | |

| Fragrance | | | | | | [removed: 215] [added: 456] | | | | | | [removed: 17] [added: 215] | | | | | | [removed: 140] [added: 17] | | |

| Hair Care | | | | | | [removed: (19)] [added: (28)] | | | | | | (19) | | | | | | [removed: 39] [added: (19)] | | |

| Other | | | | | | [removed: (2)] [added: —] | | | | | | [removed: 4] [added: (2)] | | | | | | [removed: 12] [added: 4] | | |

| | | | | | | [removed: 2,846] [added: 3,314] | | | | | | [removed: 689] [added: 2,846] | | | | | | [removed: 2,554] [added: 689] | | |

| Charges associated with restructuring and other activities | | | | | | [removed: (228)] [added: (144)] | | | | | | [removed: (83)] [added: (228)] | | | | | | [removed: (241)] [added: (83)] | | |

| Operating income | | | | | | $ | [removed: 2,618] [added: 3,170] | | | | | $ | [removed: 606] [added: 2,618] | | | | | $ | [removed: 2,313] [added: 606] | |

| The Americas | | | | | | $ | [removed: 518] [added: 1,159] | | | | | $ | [removed: (1,044)] [added: 518] | | | | | $ | [removed: 672] [added: (1,044)] | |

| Europe, the Middle East & Africa | | | | | | [removed: 1,335] [added: 1,360] | | | | | | [removed: 997] [added: 1,335] | | | | | | [removed: 1,153] [added: 997] | | |

| Asia/Pacific | | | | | | [removed: 993] [added: 795] | | | | | | [removed: 736] [added: 993] | | | | | | [removed: 729] [added: 736] | | |

(1)The net sales from [removed: our] [added: the Company’s] travel retail business are included in the Europe, the Middle East & Africa region, with the exception of [removed: the] net sales of [removed: Dr. Jart+] [added: Dr.Jart+] in the travel retail channel that are reflected in Korea in the Asia/Pacific region.

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Cost of sales | | | | | | [removed: 23.6] [added: 24.3] | | | | | | [removed: 24.8] [added: 23.6] | | | | | | [removed: 22.8] [added: 24.8] | | |

| Gross profit | | | | | | [removed: 76.4] [added: 75.7] | | | | | | [removed: 75.2] [added: 76.4] | | | | | | [removed: 77.2] [added: 75.2] | | |

| Selling, general and administrative | | | | | | [removed: 57.8] [added: 55.7] | | | | | | [removed: 60.4] [added: 57.8] | | | | | | [removed: 59.6] [added: 60.4] | | |

| Restructuring and other charges | | | | | | [removed: 1.3] [added: 0.8] | | | | | | [removed: 0.5] [added: 1.3] | | | | | | [removed: 1.4] [added: 0.5] | | |

| Goodwill impairment | | | | | | [removed: 0.3] [added: —] | | | | | | [removed: 5.7] [added: 0.3] | | | | | | [removed: 0.5] [added: 5.7] | | |

| Impairment of other intangible and long-lived assets | | | | | | [removed: 0.8] [added: 1.4] | | | | | | [removed: 4.3] [added: 0.8] | | | | | | [removed: 0.1] [added: 4.3] | | |

| Total operating expenses | | | | | | [removed: 60.2] [added: 57.9] | | | | | | [removed: 70.9] [added: 60.2] | | | | | | [removed: 61.6] [added: 70.9] | | |

| Operating income | | | | | | [removed: 16.1] [added: 17.9] | | | | | | [removed: 4.2] [added: 16.1] | | | | | | [removed: 15.6] [added: 4.2] | | |

| Interest expense | | | | | | [removed: 1.1] [added: 0.9] | | | | | | 1.1 | | | | | | [removed: 0.9] [added: 1.1] | | |

| Interest income and investment income, net | | | | | | [removed: 0.3] [added: 0.2] | | | | | | 0.3 | | | | | | [removed: 0.4] [added: 0.3] | | |

| Other components of net periodic benefit cost | | | | | | [removed: (0.1)] [added: —] | | | | | | [removed: —] [added: (0.1)] | | | | | | — | | |

| Other income, net | | | | | | [removed: 5.2] [added: —] | | | | | | [removed: 3.9] [added: 5.2] | | | | | | [removed: 0.4] [added: 3.9] | | |

| Earnings before income taxes | | | | | | [removed: 20.5] [added: 17.1] | | | | | | [removed: 7.3] [added: 20.5] | | | | | | [removed: 15.5] [added: 7.3] | | |

| Provision for income taxes | | | | | | [removed: (2.8)] [added: (3.5)] | | | | | | [removed: (2.4)] [added: (2.8)] | | | | | | [removed: (3.4)] [added: (2.4)] | | |

| | | | | | | 17,741 | | | | | | 16,229 | | | | | | 14,294 | | |

| | | | | | | 3,314 | | | | | | 2,846 | | | | | | 689 | | |

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

The net sales impact from pricing consists of changes in list prices, due to strategic pricing initiatives, and mix shifts within and among product categories, geographic regions 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 the innovation of existing products, 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 launched at different price points than existing products and value derived from innovation may vary from year to year.

The impact of new product introductions, including timing compared to introductions in prior periods, also affects our results.

Prior to fiscal 2022, constant currency information was calculated using the prior-year period weighted-average exchange rates.

This change is not material to prior-period constant currency information presented herein.

The COVID-19 pandemic continued to disrupt our operating environment globally, primarily impacting supply chain, inventory levels and other logistics during the year ended June 30, 2022.

The resurgence of COVID-19 cases in many Chinese provinces led to restrictions late in the fiscal 2022 third quarter that remained in place through the end of fiscal 2022 to prevent further spread of the virus.

Consequently, retail traffic, travel, and distribution capabilities were temporarily curtailed.

Our distribution facilities in Shanghai operated with limited capacity to fulfill brick-and-mortar and online orders beginning in mid-March 2022 and returned to normal capacity by early June 2022.

- In fiscal 2022, our global prestige fragrance net sales increased 30%, leading category growth.

Consumers gravitated to luxury and artisanal offerings from Jo Malone London, Tom Ford Beauty, Le Labo and Kilian Paris.

Colognes led growth at Jo Malone London, while bath & body and home subcategories continued to thrive.

Tom Ford Beauty saw strong fragrance growth across regions owing to the popularity of Oud Wood and the launch of Ombre Leather Parfum.

Outstanding growth from Le Labo and Kilian Paris reflected compelling activations and expanded consumer reach.

- We began to see demand for makeup products increase as COVID restrictions lifted and consumers returned to social and professional settings.

In fiscal 2022, net sales in makeup grew double-digits driven by strong activations, expanded consumer reach and the launch of MACStack mascara, increases in Estée Lauder DoubleWear and Futurist foundation products, as well as a strong performance in foundation and lip from Clinique.

- Our skin care net sales growth reflected incremental net sales attributable to the increase in our ownership of DECIEM in the fiscal 2021 fourth quarter, as well as continued strength in La Mer hero products and the launches of the Hydrating Infused Emulsion and the upgrade to The Treatment Lotion.

The category has been pressured by COVID restrictions, primarily in Asian markets, at various points throughout fiscal 2022.

- Our hair care net sales also grew double digits, reflecting brick-and-mortar channel recovery and new product launches from both Aveda and Bumble and bumble.

- The increase in net sales during fiscal 2022 was led by The Americas, primarily reflecting the recovery of brick-and-mortar stores, targeted expanded consumer reach and incremental net sales attributable to the increase in our ownership of DECIEM in the fiscal 2021 fourth quarter.

- Net sales rose in Europe, the Middle East & Africa, led by recovery in western markets and emerging markets as brick-and-mortar retail reopened across the region.

Europe, the Middle East & Africa also benefited from ongoing increases in our travel retail business, partly relating to the increase in traffic as a result of the easing of travel restrictions in The Americas and Europe, the Middle East & Africa.

- Net sales decreased slightly in Asia/Pacific, reflecting the resurgence of COVID-19 cases in many Chinese provinces which led to restrictions to further prevent the spread of the virus during the second half of fiscal 2022.

Online continued to thrive, primarily due to the current-year launch on a new third-party online platform, while brick-and-mortar retail remains challenged.

As a result of the invasion of Ukraine, we suspended our business investments and initiatives and commercial activity in Russia and Ukraine in early March 2022.

This included the temporary closure of our owned and authorized freestanding stores and our own brand sites.

As the safety of our employees remains a top priority, we continue to take significant steps to support our employees in Ukraine, including the continuance of compensation, maintenance of regular communication and offering relocation assistance, and continue to provide compensation and support to our employees in Russia.

We are monitoring the effects of this conflict, including risks that may affect our business, and expect that we will adjust our plans accordingly as the situation progresses.

For the year ended June 30, 2022, the results of operations related to Russia and Ukraine were not material to our consolidated financial statements.

There have been, and are likely to continue to be, intermittent store closures and supply chain disruptions.

We are also mindful of inflationary pressures on our cost base and are monitoring the impact on consumer preferences.

In fiscal 2022, net sales from Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna accounted for approximately 1% of consolidated net sales and 10% of fragrance net sales.

During fiscal 2020, changes were made to reflect certain Leading Beauty Forward enhancements made to the capabilities and cost structure of our travel retail business, which are primarily centralized in The Americas region, and resulted in a change to the royalty structure of the travel retail business to reflect the value created in The Americas region.

Accordingly, the fiscal 2019 operating income of The Americas was increased, with a corresponding decrease in Europe, the Middle East & Africa, by $866 million, to conform with the fiscal 2021 and 2020 methodology and presentation.

The COVID-19 pandemic continues to disrupt our operating environment, including impacts on retail traffic and changes in certain consumer preferences.

During fiscal 2021, the spread of COVID-19, as well as the resurgences in COVID-19 cases and the rapid spread of variants, including the Delta variant, particularly in the United Kingdom, Continental Europe, Latin America, and Asia outside of China, led to government restrictions to prevent further spread of the virus.

Restrictions in many parts of the world at various times during fiscal 2021 have included temporary business closures, curtailment of travel, mask wearing, social distancing and quarantines.

Retail Impact

Most brick-and-mortar retail stores that sell our products, whether operated by us or our customers, were open during the fiscal 2021 second quarter in China and the United States.

There were intermittent closures throughout the rest of the world, particularly in the second half of fiscal 2021.

In most of the Asia/Pacific region (with the exception of China), the United Kingdom, Continental Europe, Canada, and much of Latin America, many retail stores were temporarily closed for some period during the fiscal 2021 fourth quarter due to the resurgence of COVID-19 cases.

In much of the United Kingdom and Continental Europe, retail locations gradually reopened during the fourth quarter but with capacity and other safety restrictions in place.

Globally, in areas where stores were open, consumer traffic has not recovered to the pre-COVID-19 pandemic levels.

International travel has remained largely curtailed globally due to both government restrictions and consumer health concerns that continue to adversely impact consumer traffic in most travel retail locations.

Conversely, domestic travel in China, especially in Hainan, and some other travel corridors in Asia/Pacific and The Americas were open.

Somewhat offsetting the significant declines in brick-and-mortar channels, net sales growth of our products online (through our own websites, third-party platforms and websites of our retailers) remained strong in every region during fiscal 2021.

Due in large part to the continued challenging retail environment and uncertainties stemming from the COVID-19 pandemic, we recognized Goodwill, other intangible asset and long-live asset impairments.

Consumer Preferences

The COVID-19 pandemic-related closures of offices, retail stores and other businesses and the significant decline in social gatherings have influenced consumer preferences and practices.

Specifically, the demand for makeup continues to be weak given fewer makeup usage occasions and ongoing mask wearing, while other categories have been more resilient.

Cost Controls

In response to the ongoing impacts from the COVID-19 pandemic, we continue to implement cost control actions in certain areas of the business to effectively manage the changing business environment.

We are continuing to review applicable government assistance programs globally.

- In fiscal 2021, global prestige skin care continued to lead product category growth.

Our skin care net sales benefited from the enduring strength of hero product lines such as Advanced Night Repair from Estée Lauder, Crème de La Mer from La Mer, and the Dramatically Different products and Even Better Clinical Radical Dark Spot Corrector + Interrupter from Clinique, as well as recent product launches, the growth in Asia and targeted expanded consumer reach.

The launches of Advanced Night Repair Synchronized Multi-Recovery Complex, Revitalizing Supreme+ Bright, and the relaunch of Perfectionist Pro from Estée Lauder, Genaissance de la Mer The Concentrated Night Balm from La Mer, and Moisture Surge 100H Auto-Replenishing Hydrator from Clinique were particularly successful in Asia/Pacific.

Net sales of skin care products in fiscal 2021 rose in every geographic region, led by Estée Lauder.

La Mer and Dr. Jart+, which we acquired in December 2019.

- Global prestige makeup sales declined as COVID-19 limited social and business activities and consumers overall wore less makeup.

Some sub-categories in makeup performed better in the COVID-19 environment, including lip gloss and makeup with skin care benefits such as tinted moisturizers, while demand for lipstick and foundation remained weak.

During fiscal 2021, our makeup net sales benefited from targeted expanded consumer reach and the continued success of existing products, such as the Futurist line of products from Estée Lauder, The Luminous Lifting Cushion Foundation from La Mer and the Lip Injection line from Too Faced.

- Our fragrance net sales growth accelerated during fiscal 2021, driven by continued resilience in luxury fragrance.

The growth was led by strength in colognes, bath, body and home subcategories at Jo Malone London, the successful launches of Bitter Peach and Rose Prick Private Blend fragrances from Tom Ford Beauty and targeted expanded consumer reach of Le Labo.

- Our hair care net sales grew as salons and retail stores reopened throughout the year and strong online growth continued.

Hero products led growth at Aveda, supported by the brand’s “100% vegan” campaign.

- In North America, we deployed a number of strategies to drive growth, which began to deliver improvements through the second half of fiscal 2021.

Net sales in fiscal 2021 from our specialty-multi and online channels led growth.

In Latin America, we continue to launch new brands, develop our online business, expand social media outreach and encourage consumers to trade up from mass beauty products.

- In Europe, the Middle East & Africa, we continue to expand the consumer reach of many of our brands and strengthen their digital and social media presences.

- In Asia/Pacific, particularly in China, we continue to leverage our diversified brand portfolio and expansion on third-party online malls to benefit from the strong consumer demand for prestige beauty.

In mainland China, net sales grew strong double digits reflecting growth in virtually all product categories, as well as in nearly every brand and double-digit growth in every channel, led by online.

There have been, and are likely to continue to be, intermittent store closures, as well as restructurings and bankruptcies in the retail industry, including among our customers, and shifts in preferences as to where and how consumers shop, as well as changes in their preferences for certain products.

Our products are sold in approximately 150 countries and territories under a number of well-known brand names including: Estée Lauder, Clinique, Origins, M·A·C, Bobbi Brown, La Mer, Aveda, Jo Malone London, Too Faced, [removed: Dr. Jart+,] [added: Dr.Jart+,] and The Ordinary.

We are also the global licensee [added: of brand names] for [removed: fragrances, cosmetics] [added: fragrances] and/or [removed: related products sold under various designer brand names.][added: cosmetics, including Tom Ford and AERIN.]

For a discussion of recent [removed: developments, including the impacts to consumer preferences and market trends due] [added: developments relating] to the COVID-19 pandemic, see *Item 7.

Members of the Lauder family, some of whom are directors, executive officers and/or employees, beneficially own, directly or indirectly, as of August [removed: 20, 2021,] [added: 17, 2022,] shares of our Company's Class A Common Stock and Class B Common Stock having approximately [removed: 85%] [added: 84%] of the outstanding voting power of the Common Stock.

[removed: ][added: ]

[removed: ][added: ]

| [removed: ] [added: ] | | | | | | Estée Lauder brand products, which have been sold since 1946, have a reputation for innovation, sophistication and superior quality. Estée Lauder is one of the world’s most renowned beauty brands, producing iconic skin care, makeup and fragrances. | | |

| [removed: ] [added: ] | | | | | | We pioneered the marketing of prestige men’s fragrance, grooming and skin care products with the introduction of Aramis products in 1964. | | |

| [removed: ] [added: ] | | | | | | Introduced in 1968, Clinique skin care and makeup products are all allergy tested and 100% fragrance free and have been designed to address individual skin types and needs. Clinique also offers select fragrances. The skin care and makeup products are based on the research and related expertise of leading dermatologists. | | |

| [removed: ] [added: ] | | | | | | Lab Series, introduced in 1987, is a series of high performance, specialized skin care solutions uniquely created to improve the look and feel of men’s skin. | | |

| [removed: ] [added: ] | | | | | | Introduced in 1990, Origins is known for high-performance natural skin care that is “powered by nature and proven by science.” The brand also sells makeup, fragrance and hair care products and is distributed primarily through online, specialty-multi and [removed: free-standing] [added: freestanding] Origins stores. Origins has a license agreement to develop and sell beauty products using the name of Dr. Andrew Weil. | | |

| [removed: ] [added: ] | | | | | | M·A·C, the leading brand of professional cosmetics, was created in Toronto, Canada. We completed our acquisition of M·A·C in 1998. The brand’s popularity has grown through a tradition of word-of-mouth endorsement from professional makeup artists, models, photographers and journalists around the world. | | |

| [removed: ] [added: ] | | | | | | Acquired in 1995, Bobbi Brown is a global prestige beauty brand known for its high quality and undertone-correct makeup and skin care products that celebrate individual beauty and confidence. Reflecting its artistry roots, the brand is focused on creating a teaching and learning community of women around the world. | | |

| [removed: ] [added: ] | | | | | | Acquired in 1995, La Mer is a leading global luxury skin care brand that is available in limited distribution worldwide. The brand is known for its iconic Crème de la Mer moisturizer, serums and lotions, as well as other skin care and foundation products that are created around the original “Miracle Broth.” | | |

| [removed: ] [added: ] | | | | | | Acquired in 1997, Aveda sells high-performance, naturally-derived hair care products, as well as skin care, makeup and fragrance. The brand is known for its innovative plant-based products and its commitment to environmental sustainability and corporate responsibility. It is distributed primarily through top-tier hair salons and direct-to-consumer, via online and Aveda stores. | | |

| [removed: ] [added: ] | | | | | | Acquired in 1999, Jo Malone London is a scented British lifestyle brand with understated elegance, offering enchanted story-telling and “High-Touch” boutique services. The brand’s famous colognes are perfect alone or artfully layered with Fragrance Combining. Jo Malone London embodies the spirit of gifting generosity and inspires emotional elevation. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2006, Bumble and bumble is a New York-based hair care brand that creates high-quality hair care and styling products. The brand is distributed primarily through top-tier salons, including Bumble and bumble’s own flagship salons, specialty-multi retailers and online. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2003, Darphin is a Paris-based, prestige skin care brand known for its high-performance botanical skin care. The brand is distributed primarily through high-end independent pharmacies and online brand and retailer channels. | | |

| [removed: ] [added: ] | | | | | | In 2005, we entered into a license agreement to develop and distribute luxury fragrances and beauty products under the Tom Ford brand name, all shaped with Tom Ford’s vision to be the first true luxury brand of the 21st century encompassing fashion, fragrance and accessories. In the same vein as the fashion brand, Tom Ford Beauty exudes seductive modern-day glamour and includes luxury fragrance, color cosmetics, men’s grooming products and skin care products for discerning consumers globally. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2010, Smashbox Cosmetics is a Los Angeles-based, photo studio-inspired makeup brand with high performance products created for our consumer’s everyday life in the spotlight. | | |

| [removed: ] [added: ] | | | | | | Launched in 2012, AERIN is a luxury lifestyle beauty and fragrance brand inspired by the signature style of its founder, Aerin Lauder. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2014, Le Labo is a sensory and experiential lifestyle brand, deeply rooted in the craft of slow perfumery. Born in Grasse, France and raised in downtown NYC, it offers hand-crafted and personalized fragrances, as well as ‘alternative’ and genuine experiences celebrating craftsmanship. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2015, Les Editions de Parfums Frédéric Malle is a collection of exclusive, sophisticated, ultraluxury fragrances crafted by some of the world’s most talented perfumers and published by the brand. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2015, GLAMGLOW started as a behind-the-scenes Hollywood secret to instant glow. The brand is known for bold, sensorial products that deliver instant results, and its unconventional philosophy that high performance skin care should also be fun and sexy. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2016, Kilian Paris is a prestige fragrance brand that embodies timeless sophistication and modern luxury. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2016, Too Faced is a serious makeup brand that knows how to have fun. The brand is unabashedly pink, pretty and feminine with a playful wink that is beloved for its high-quality formulas, cheeky product names and distinctive packaging. | | |

| [removed: ] [added: ] | | | | | | Acquired in 2019, [removed: Dr. Jart+] [added: Dr.Jart+] is a Seoul-based, global skin care brand known for its innovative formulations and unique combination of dermatological science and art. Its high-quality masks, moisturizers and serums are distributed primarily through travel retail, specialty-multi and online channels. | | |

| [removed: ] [added: ] | | | | | | [removed: ] [added:  ] | | |

In fiscal 2021, we made the decision to exit the global distribution of BECCA products, a makeup brand we acquired in [removed: 2016.][added: 2016 and substantially completed this exit during the fiscal 2022 first quarter.]

In some cases, we have acquired the remaining interest or a majority interest (e.g., Have & Be Co. Ltd. (i.e. [removed: Dr. Jart+)] [added: Dr.Jart+)] and Deciem Beauty Group Inc., respectively).

Our “luxury brands” are La Mer, Jo Malone London, Tom Ford Beauty, [removed: AERIN,] [added: AERIN Beauty,] Le Labo, Editions de Parfums Frédéric Malle and Kilian Paris.

In fiscal [removed: 2021,] [added: 2022,] we continued to further integrate social impact and sustainability into our strategy and business operations.

Areas of focus include climate and energy; packaging; responsible sourcing; [added: green chemistry and] ingredient transparency; inclusion, diversity and equity; employee health and safety; and social investments.

We have set goals or made commitments [removed: for] [added: within] these focus areas.

For example, our goals related to climate and energy support efficiency and conservation within our [removed: facilities and] [added: facilities,] internal supply [added: chain and value] chain, and some of these goals are also intended to help us reduce cost and waste.

[removed: In fiscal 2021,] [added: Through our flexible global distribution network] we [removed: were impacted by] [added: have generally been able to respond to] the [removed: dramatic] shifts in [removed: our distribution] [added: consumer] landscape and consumer behaviors attributable to the COVID-19 pandemic.

While today a majority of these online sales are generated in mainland China, the United States and the United Kingdom, we continue to expand [removed: rapidly] in other markets globally.

As of June 30, [removed: 2021,] [added: 2022,] we operated approximately 1,600 freestanding stores.

Most freestanding stores are operated by us under a single brand name, such as M·A·C, Jo Malone [removed: London, Aveda, Origins, Le Labo or DECIEM.][added: London and Aveda.]

We also operate over [removed: 200] [added: 250] multi-branded company stores in outlet malls.

We previously announced that we would not be renewing our license agreements for the Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna product lines when their respective terms expire in June 2023.

We have since negotiated early termination agreements with each of the licensors effective June 30, 2022 and continued to sell products under these licenses until such time.

We are working with the licensors and their respective new licensees, where applicable, to transition the business to the new licensees.

These initiatives aim to foster employee engagement and build consumer trust and loyalty.

The total reflects the net impact during fiscal 2022 of closures due to natural lease expirations and store closures related to the Post-COVID Business Acceleration Program, offset by new door openings.

During fiscal 2022, we continued to respond to shifting consumer and employee behaviors driven by the COVID-19 pandemic, which included new, hybrid ways of working for our office-based employees.

We invested in hardware, software, education and support structures to create engaging and collaborative work environments across our facilities, in both virtual and hybrid settings.

Construction of the first phase was completed in fiscal 2022, and we expect the remainder of the site to be completed and operational in early fiscal 2024.

In fiscal 2022, we opened a new, state-of-the-art distribution center in Switzerland to support the growth of our travel retail business and further drive our sustainability efforts.

In fiscal 2022, we responded to employee need for more access to career opportunities by launching our first Talent Marketplace, ELC Grow, which enables employees to explore personalized roles, projects, and networking opportunities that can empower employees to grow their skills and career.

As we plan for the future and continue to embrace our new normal, our focus is on flexibility, work-life harmonization, and ensuring that our employees have what they need to succeed personally and professionally.

| Peter Jueptner | | | | | | 59 | | | | | | President, International | | |

*as of August 17, 2022

| Angela Wei Dong | | | | | | Global Vice President and General Manager of Greater China, NIKE, Inc., a company that designs and develops, and markets and sells worldwide, athletic footwear, equipment, accessories and services | | |

| Arturo Nuñez | | | | | | Chief Marketing Officer, Nu Holdings Ltd., a digital banking platform | | |

| | | | | | | | | |

*as of August 17, 2022

The discussion of our net sales and operating results is based on specific markets in commercially concentrated locations, which may include separate discussions on territories within a country.

For segment and geographical area financial information, see *Item 8.

Financial Statements and Supplementary Data – Note 22 – Segment Data and Related Information*.

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

|  | | | | | | | | |

| | | | | | | Under exclusive global license arrangements with Tommy Hilfiger, Donna Karan New York, DKNY, Michael Kors and Ermenegildo Zegna, we manage a diversified designer fragrance portfolio. | | |

In addition to the brands described above, we manufacture and sell products under the Do The Right Thing brand.

We expect to substantially complete this exit during fiscal 2022.

During fiscal 2021, we ceased global distribution of Prescriptives and Rodin olio lusso products and did not renew the license with Kiton.

While we and certain retailers and distributors closed or decreased our presence in a number of existing points of distribution, we also continued to strategically open new points of distribution globally and saw an expansion of online sales globally.

The total reflects the net impact during fiscal 2021 of store closures related to the Post-COVID Business Acceleration Program, the decision not to renew leases at certain locations, certain freestanding stores previously operated by authorized third parties that were transitioned to us and existing DECIEM stores due to the increase in our ownership in that company.

There are also approximately 700 Company-branded freestanding stores around the world operated by authorized third parties, primarily in Europe, the Middle East & Africa and Asia/Pacific.

During fiscal 2021, we responded to shifting consumer and employee behaviors driven by the COVID-19 pandemic.

Construction is in progress and the facility is expected to be operational in early fiscal 2023.

As a response to the COVID-19 pandemic, we have leveraged our network of global supply, manufacturing and distribution, to help mitigate disruption to our supply chain and help enable our return to normal operations.

By the end of the first quarter of fiscal 2021, and throughout fiscal 2021, all of our manufacturing and distribution facilities were operating at sufficient levels.

The fiscal 2021 reduction in employees was driven primarily by fewer point of sale employees due to the COVID-19 pandemic, including a combination of door closures and on-going in-store capacity restrictions, decisions to reduce the number of on-call and temporary employees, and voluntary resignations.

Throughout the COVID-19 pandemic, we implemented new health and safety protocols and modified a number of our business practices to protect our employees, including allowing our office-based employees to work remotely, imposing restrictions for business travel, and implementing safety measures for on-site employees.

Stockholders may also contact Investor Relations at 767 Fifth Avenue, New York, New York 10153 to obtain a hard copy of these reports without charge.

Stockholders may also contact Investor Relations at 767 Fifth Avenue, New York, New York 10153 to obtain a hard copy of these documents without charge.

| John Demsey | | | | | | 65 | | | | | | Executive Group President | | |

| Gregory F. Polcer(1) | | | | | | 66 | | | | | | Executive Vice President – Global Supply Chain | | |

| Cedric Prouvé | | | | | | 61 | | | | | | Group President – International | | |

| Meridith Webster(2) | | | | | | 45 | | | | | | Executive Vice President – Global Communications and Public Affairs | | |

*as of August 20, 2021, except as otherwise noted below

(1) Mr. Canevari joined the Company in April 2021, and Mr. Polcer retired from the Company effective July 1, 2021.

(2) Ms. Webster joined the Company in May 2021, and Ms. Trower retired from the Company effective July 1, 2021.

| Irvine O. Hockaday, Jr. | | | | | | Former President and Chief Executive Officer, Hallmark Cards, Inc. | | |

*as of August 20, 2021

| | | | For the fiscal year ended June 30, [removed: 2021] [added: 2022] | | |

The aggregate market value of the registrant’s voting common equity held by non-affiliates of the registrant was approximately [removed: $61] [added: $86] billion at December 31, [removed: 2020] [added: 2021] (the last business day of the registrant’s most recently completed second quarter).*

At August [removed: 20, 2021, 233,045,213] [added: 17, 2022, 231,361,571] shares of the registrant’s Class A Common Stock, $.01 par value, and [removed: 128,242,029] [added: 125,542,029] shares of the registrant’s Class B Common Stock, $.01 par value, were outstanding.

| Proxy Statement for Annual Meeting of Stockholders to be held November [removed: 12, 2021] [added: 18, 2022] | | | | | | Part III | | |

| [Item [removed: 1.](#i3abf634c5cff49dda5f3a4237e4cefbb_13)] [added: 1.](#i2ba0bd92bcb14d27a1d59d9667569d45_13)] | | | [removed: [Business](#i3abf634c5cff49dda5f3a4237e4cefbb_13)] [added: [Business](#i2ba0bd92bcb14d27a1d59d9667569d45_13)] | | | [removed: [2](#i3abf634c5cff49dda5f3a4237e4cefbb_13)] [added: [2](#i2ba0bd92bcb14d27a1d59d9667569d45_13)] | | |

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| [Item [removed: 9.](#i3abf634c5cff49dda5f3a4237e4cefbb_49)] [added: 9.](#i2ba0bd92bcb14d27a1d59d9667569d45_49)] | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i3abf634c5cff49dda5f3a4237e4cefbb_49)] [added: Disclosure](#i2ba0bd92bcb14d27a1d59d9667569d45_49)] | | | [removed: [57](#i3abf634c5cff49dda5f3a4237e4cefbb_49)] [added: [57](#i2ba0bd92bcb14d27a1d59d9667569d45_49)] | | |

| [Item [removed: 9A.](#i3abf634c5cff49dda5f3a4237e4cefbb_52)] [added: 9A.](#i2ba0bd92bcb14d27a1d59d9667569d45_52)] | | | [Controls and [removed: Procedures](#i3abf634c5cff49dda5f3a4237e4cefbb_52)] [added: Procedures](#i2ba0bd92bcb14d27a1d59d9667569d45_52)] | | | [removed: [57](#i3abf634c5cff49dda5f3a4237e4cefbb_52)] [added: [57](#i2ba0bd92bcb14d27a1d59d9667569d45_52)] | | |

| [Item [removed: 9B.](#i3abf634c5cff49dda5f3a4237e4cefbb_55)] [added: 9B.](#i2ba0bd92bcb14d27a1d59d9667569d45_55)] | | | [Other [removed: Information](#i3abf634c5cff49dda5f3a4237e4cefbb_55)] [added: Information](#i2ba0bd92bcb14d27a1d59d9667569d45_55)] | | | [removed: [57](#i3abf634c5cff49dda5f3a4237e4cefbb_55)] [added: [57](#i2ba0bd92bcb14d27a1d59d9667569d45_55)] | | |

| [Part [removed: III:](#i3abf634c5cff49dda5f3a4237e4cefbb_58)] [added: III:](#i2ba0bd92bcb14d27a1d59d9667569d45_58)] | | | | | | | | |

| [Item [removed: 10.](#i3abf634c5cff49dda5f3a4237e4cefbb_61)] [added: 10.](#i2ba0bd92bcb14d27a1d59d9667569d45_61)] | | | [Directors, Executive Officers and Corporate [removed: Governance](#i3abf634c5cff49dda5f3a4237e4cefbb_61)] [added: Governance](#i2ba0bd92bcb14d27a1d59d9667569d45_61)] | | | [removed: [58](#i3abf634c5cff49dda5f3a4237e4cefbb_61)] [added: [58](#i2ba0bd92bcb14d27a1d59d9667569d45_61)] | | |

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| [Item [removed: 15.](#i3abf634c5cff49dda5f3a4237e4cefbb_79)] [added: 15.](#i2ba0bd92bcb14d27a1d59d9667569d45_79)] | | | [Exhibits, Financial Statement [removed: Schedules](#i3abf634c5cff49dda5f3a4237e4cefbb_79)] [added: Schedules](#i2ba0bd92bcb14d27a1d59d9667569d45_79)] | | | [removed: [59](#i3abf634c5cff49dda5f3a4237e4cefbb_79)] [added: [59](#i2ba0bd92bcb14d27a1d59d9667569d45_79)] | | |

| [Item [removed: 16.](#i3abf634c5cff49dda5f3a4237e4cefbb_82)] [added: 16.](#i2ba0bd92bcb14d27a1d59d9667569d45_82)] | | | [Form 10-K [removed: Summary](#i3abf634c5cff49dda5f3a4237e4cefbb_82)] [added: Summary](#i2ba0bd92bcb14d27a1d59d9667569d45_82)] | | | [removed: [65](#i3abf634c5cff49dda5f3a4237e4cefbb_82)] [added: [65](#i2ba0bd92bcb14d27a1d59d9667569d45_82)] | | |

| [Part I:](#i2ba0bd92bcb14d27a1d59d9667569d45_10) | | | | | | | | |

| [Part II:](#i2ba0bd92bcb14d27a1d59d9667569d45_31) | | | | | | | | |

| [Item 6.](#i2ba0bd92bcb14d27a1d59d9667569d45_37) | | | [\[Reserved\]](#i2ba0bd92bcb14d27a1d59d9667569d45_37) | | | [27](#i2ba0bd92bcb14d27a1d59d9667569d45_37) | | |

| [Item 9C.](#i2ba0bd92bcb14d27a1d59d9667569d45_1679) | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](#i2ba0bd92bcb14d27a1d59d9667569d45_1679) | | | [57](#i2ba0bd92bcb14d27a1d59d9667569d45_1679) | | |

| [Part IV:](#i2ba0bd92bcb14d27a1d59d9667569d45_76) | | | | | | | | |

| | | | | | | | | |

| [Signatures](#i2ba0bd92bcb14d27a1d59d9667569d45_85) | | | | | | [66](#i2ba0bd92bcb14d27a1d59d9667569d45_85) | | |

| [Part I:](#i3abf634c5cff49dda5f3a4237e4cefbb_10) | | | | | | | | |

| [Part II:](#i3abf634c5cff49dda5f3a4237e4cefbb_31) | | | | | | | | |

| [Item 6.](#i3abf634c5cff49dda5f3a4237e4cefbb_37) | | | [Selected Financial Data](#i3abf634c5cff49dda5f3a4237e4cefbb_37) | | | [27](#i3abf634c5cff49dda5f3a4237e4cefbb_37) | | |

| [Part IV:](#i3abf634c5cff49dda5f3a4237e4cefbb_76) | | | | | | | | |

| [Signatures](#i3abf634c5cff49dda5f3a4237e4cefbb_85) | | | | | | [66](#i3abf634c5cff49dda5f3a4237e4cefbb_85) | | |

The following table sets forth our principal owned and leased manufacturing, assembly, research and development (“R&D”) and distribution facilities, some of which include contiguous office space, as well as our principal executive offices, as of August [removed: 20, 2021.][added: 17, 2022.]

The leases expire at various times through [removed: 2078] [added: 2079] subject to certain renewal options.

| Manufacturing | | | 2 | | | | | | 2 | | | | | | [removed: 3] [added: 2] | | | | | | — | | | | | | — | | | | | | — | | |

| Manufacturing and R&D | | | 1 | | | | | | — | | | | | | [removed: —] [added: 1] | | | | | | [removed: 1] [added: —] | | | | | | — | | | | | | — | | |

| Total | | | 4 | | | | | | 14 | | | | | | 5 | | | | | | [removed: 10] [added: 9] | | | | | | — | | | | | | [removed: 4] [added: 3] | | |

Certain of our manufacturing facilities are utilized primarily for the production of products relating to particular product categories: [removed: eight] [added: three] for makeup; two for skin care; two for skin care and fragrance; and one for skin care and hair care.

In fiscal [removed: 2021, five] [added: 2022, four] of our primarily makeup facilities also produced a significant volume of skin care products.

Construction is [removed: in progress] [added: nearly completed] and the facility is [added: now] expected to be operational in [removed: late] [added: early] fiscal [removed: 2022.][added: 2023.]

| R&D | | | 1 | | | | | | 2 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | |

Construction of the first phase was completed in fiscal 2022 and we expect the remainder of the site to be completed and operational in early fiscal 2024.

| R&D | | | 1 | | | | | | 2 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2 | | |

On August [removed: 18, 2021,] [added: 17, 2022,] a dividend was declared in the amount of [removed: $.53] [added: $.60] per share on our Class A and Class B Common Stock.

The dividend is payable in cash on September 15, [removed: 2021] [added: 2022] to stockholders of record at the close of business on August 31, [removed: 2021.][added: 2022.]

As of August [removed: 20, 2021,] [added: 17, 2022,] there were [removed: 2,279] [added: 2,201] record holders of Class A Common Stock and 13 record holders of Class B Common Stock.

Subsequent to June 30, [removed: 2021] [added: 2022] and as of August [removed: 20, 2021,] [added: 17, 2022,] we purchased approximately [removed: 0.8] [added: 0.2] million additional shares of our Class A Common Stock for [removed: $244] [added: $63] million pursuant to our share repurchase program.

The returns are calculated by assuming an investment of $100 in the Class A Common Stock and in each index on June 30, [removed: 2016.][added: 2017.]

[removed: ][added: ]

| April 2022 | | | | | | 617,017 | | | | | | $ | 266.80 | | | | | 616,083 | | | | | | 26,351,471 | | |

| May 2022 | | | | | | 339,298 | | | | | | 244.73 | | | | | | 338,189 | | | | | | 26,013,282 | | |

| June 2022 | | | | | | 251,044 | | | | | | 249.51 | | | | | | 132,500 | | | | | | 25,880,782 | | |

| | | | | | | 1,207,359 | | | | | | 257.00 | | | | | | 1,086,772 | | | | | | | | |

Beginning in early February 2020, we temporarily suspended our repurchase of shares of our Class A Common Stock, and in March 2021, we resumed such repurchases under our share repurchase program.

| April 2021 | | | | | | 238,306 | | | | | | $ | 301.17 | | | | | 238,306 | | | | | | 33,765,535 | | |

| May 2021 | | | | | | 529,929 | | | | | | 298.19 | | | | | | 529,363 | | | | | | 33,236,172 | | |

| June 2021 | | | | | | 616,328 | | | | | | 303.55 | | | | | | 532,633 | | | | | | 32,703,539 | | |

| | | | | | | 1,384,563 | | | | | | 301.09 | | | | | | 1,300,302 | | | | | | | | |

Not required.

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, [removed: including impacts of COVID-19,] 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, [removed: 2021.][added: 2022.]

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 [removed: 2021] [added: 2022] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART III

Not applicable.

PART III

Business – Information about our Executive Officers,* will be included in our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders (the [removed: “2021] [added: “2022] Proxy Statement”).

The [removed: 2021] [added: 2022] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2021] [added: 2022] and such information is incorporated herein by reference.

The information required by this Item will be included in the [removed: 2021] [added: 2022] Proxy Statement.

The [removed: 2021] [added: 2022] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2021] [added: 2022] and such information is incorporated herein by reference.

The information required by this Item, not already provided under *Equity Compensation Plan Information* as set forth below, will be included in the [removed: 2021] [added: 2022] Proxy Statement.

The [removed: 2021] [added: 2022] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2021] [added: 2022] and such information is incorporated herein by reference.

The following table summarizes the equity compensation plans under which our securities may be issued as of June 30, [removed: 2021] [added: 2022] and does not include grants made or cancelled and options exercised after such date.

Equity Compensation Plan Information as of June 30, [removed: 2021][added: 2022]

(2)Consists of [removed: 7,615,191] [added: 7,171,826] shares issuable upon exercise of outstanding options, [removed: 1,857,165] [added: 1,517,875] shares issuable upon conversion of outstanding Restricted Stock Units, [removed: 1,536,083] [added: 1,429,718] shares issuable upon conversion of outstanding Performance Share Units (“PSUs”) (assuming maximum payout for unvested PSUs and PSUs vested as of June 30, [removed: 2021] [added: 2022] pending approval by the Stock Plan Subcommittee of our Board of Directors), [removed: 141,555] [added: 121,940] shares issuable upon conversion of Share Units and [removed: 609,011] [added: 479,728] shares issuable upon conversion of Long-term PSUs, including Price-vested units (“PVUs”).

(3)Calculated based upon outstanding options in respect of [removed: 7,615,191] [added: 7,171,826] shares of our Class A Common Stock.

As of June 30, [removed: 2021,] [added: 2022,] there were [removed: 12,717,742] [added: 11,080,027] shares of Class A Common Stock available for issuance under the 2002 Plan (subject to the approval by the Stock Plan Subcommittee of expected payouts for PSUs vested as of June 30, [removed: 2021).][added: 2022).]

As of June 30, [removed: 2021,] [added: 2022,] there were [removed: 464,327] [added: 450,212] 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, [removed: 2021,] [added: 2022,] the total shares of Common Stock outstanding (i.e. Class A plus Class B) would increase [removed: 7%] [added: 6%] to [removed: 386,700,472.][added: 379,306,876.]

All outstanding options to purchase shares of Class A Common Stock, have an exercise price less than [removed: $318.08,] [added: $254.67,] the closing price on June 30, [removed: 2021.][added: 2022.]

Assuming the exercise of only in-the-money options, the total shares outstanding would increase by 2% to [removed: 369,374,589.][added: 363,206,293.]

| Equity compensation plans approved by security holders(1) | | | | | | 10,721,087 | | | | | | $169.28 | | | | | | 11,530,239 | | |

| Equity compensation plans approved by security holders(1) | | | | | | 11,759,005 | | | | | | $136.24 | | | | | | 13,182,069 | | |

The information required by this Item will be included in the [removed: 2021] [added: 2022] Proxy Statement.

The [removed: 2021] [added: 2022] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2021] [added: 2022] and such information is incorporated herein by reference.

The information required by this Item will be included in the [removed: 2021] [added: 2022] Proxy Statement.

The [removed: 2021] [added: 2022] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2021] [added: 2022] and such information is incorporated herein by reference.

| 4.13 | | | | | | Officers’ Certificate, dated May 10, 2016, defining certain terms of the [removed: 1.700%] [added: 4.375%] Senior Notes due [removed: 2021] [added: 2045] (filed as Exhibit [removed: 4.1] [added: 4.3] to our Current Report on Form 8-K filed on May 10, 2016) (SEC File No. 1-14064).* | | |

| 4.14 | | | | | | Global Note for the [removed: 1.700%] [added: 4.375%] Senior Notes due [removed: 2021] [added: 2045] (filed as Exhibit [removed: A] [added: B] in Exhibit [removed: 4.1] [added: 4.3] to our Current Report on Form 8-K filed on May 10, 2016) (SEC File No. 1-14064).* | | |

| 4.15 | | | | | | Officers’ Certificate, dated [removed: May 10, 2016,] [added: February 9, 2017,] defining certain terms of the [removed: 4.375%] [added: 3.150%] Senior Notes due [removed: 2045] [added: 2027] (filed as Exhibit 4.3 to our Current Report on Form 8-K filed on [removed: May 10, 2016)] [added: February 9, 2017)] (SEC File No. 1-14064).* | | |

| 4.16 | | | | | | [added: Form of] Global Note for the [removed: 4.375%] [added: 3.150%] Senior Notes due [removed: 2045 (filed] [added: 2027 (included] as Exhibit [removed: B] [added: A] in Exhibit 4.3 to our Current Report on Form 8-K filed on [removed: May 10, 2016)] [added: February 9, 2017)] (SEC File No. 1-14064).* | | |

| 4.17 | | | | | | Officers’ Certificate, dated February 9, 2017, defining certain terms of the [removed: 3.150%] [added: 4.150%] Senior Notes due [removed: 2027] [added: 2047] (filed as Exhibit [removed: 4.3] [added: 4.5] to our Current Report on Form 8-K filed on February 9, 2017) (SEC File No. 1-14064).* | | |

| 4.18 | | | | | | Form of Global Note for the [removed: 3.150%] [added: 4.150%] Senior Notes due [removed: 2027] [added: 2047] (included as Exhibit A in Exhibit [removed: 4.3] [added: 4.5] to our Current Report on Form 8-K filed on February 9, 2017) (SEC File No. 1-14064).* | | |

| 4.19 | | | | | | Officers’ Certificate, dated [removed: February 9, 2017,] [added: November 21, 2019,] defining certain terms of the [removed: 4.150%] [added: 2.000%] Senior Notes due [removed: 2047] [added: 2024] (filed as Exhibit [removed: 4.5] [added: 4.1] to our Current Report on Form 8-K filed on [removed: February 9, 2017)] [added: November 21, 2019)] (SEC File No. 1-14064).* | | |

| 4.20 | | | | | | Form of Global Note for the [removed: 4.150%] [added: 2.000%] Senior Notes due [removed: 2047] [added: 2024] (included as Exhibit A in Exhibit [removed: 4.5] [added: 4.1] to our Current Report on Form 8-K filed on [removed: February 9, 2017)] [added: November 21, 2019)] (SEC File No. 1-14064).* | | |

| 4.21 | | | | | | Officers’ Certificate, dated November 21, 2019, defining certain terms of the [removed: 2.000%] [added: 2.375%] Senior Notes due [removed: 2024] [added: 2029] (filed as Exhibit [removed: 4.1] [added: 4.3] to our Current Report on Form 8-K filed on November 21, 2019) (SEC File No. 1-14064).* | | |

| 4.22 | | | | | | Form of Global Note for the [removed: 2.000%] [added: 2.375%] Senior Notes due [removed: 2024] [added: 2029] (included as Exhibit A in Exhibit [removed: 4.1] [added: 4.3] to our Current Report on Form 8-K filed on November 21, 2019) (SEC File No. 1-14064).* | | |

| 4.23 | | | | | | Officers’ Certificate, dated November 21, 2019, defining certain terms of the [removed: 2.375%] [added: 3.125%] Senior Notes due [removed: 2029] [added: 2049] (filed as Exhibit [removed: 4.3] [added: 4.5] to our Current Report on Form 8-K filed on November 21, 2019) (SEC File No. 1-14064).* | | |

| 4.24 | | | | | | Form of Global Note for the [removed: 2.375%] [added: 3.125%] Senior Notes due [removed: 2029] [added: 2049] (included as Exhibit A in Exhibit [removed: 4.3] [added: 4.5] to our Current Report on Form 8-K filed on November 21, 2019) (SEC File No. 1-14064).* | | |

| 4.25 | | | | | | Officers’ Certificate, dated [removed: November 21, 2019,] [added: April 13, 2020,] defining certain terms of the [removed: 3.125%] [added: 2.600%] Senior Notes due [removed: 2049] [added: 2030] (filed as Exhibit [removed: 4.5] [added: 4.1] to our Current Report on Form 8-K filed on [removed: November 21, 2019)] [added: April 13, 2020)] (SEC File No. 1-14064).* | | |

| 4.26 | | | | | | Form of Global Note for the [removed: 3.125%] [added: 2.600%] Senior Notes due [removed: 2049] [added: 2030] (included as Exhibit A in Exhibit [removed: 4.5] [added: 4.1] to our Current Report on Form 8-K filed on [removed: November 21, 2019)] [added: April 13, 2020)] (SEC File No. 1-14064).* | | |

| 4.27 | | | | | | Officers’ Certificate, dated [removed: April 13, 2020,] [added: March 4, 2021,] defining certain terms of the [removed: 2.600%] [added: 1.950%] Senior Notes due [removed: 2030] [added: 2031] (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on [removed: April 13, 2020)] [added: March 4, 2021)] (SEC File No. 1-14064).* | | |

| 4.28 | | | | | | Form of Global Note for the [removed: 2.600%] [added: 1.950%] Senior Notes due [removed: 2030] [added: 2031] (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on [removed: April 13, 2020)] [added: March 4, 2021)] (SEC File No. 1-14064).* | | |

| 10.3 | | | | | | The Estee Lauder Companies Retirement Growth Account Plan, as amended and restated, effective as of January 1, [removed: 2017,] [added: 2019, as] further amended [removed: effective as of July] [added: through January] 1, [removed: 2017] [added: 2022] (filed as Exhibit [removed: 10.3] [added: 10.2] to our [removed: Annual] [added: Quarterly] Report on Form [removed: 10-K] [added: 10-Q] filed on [removed: August 25, 2017)] [added: February 3, 2022)] (SEC File No. 1-14064).*† | | |

| [removed: 10.13] [added: 10.14] | | | | | | Form of Deferred Compensation Agreement (interest-based) with Outside Directors (filed as Exhibit 10.14 to our Annual Report on Form 10-K filed on September 17, 2001) (SEC File No. 1-14064).*† | | |

| [removed: 10.13a] [added: 10.14a] | | | | | | Form of Deferred Compensation Agreement (interest-based) with Outside Directors (including Election Form) (filed as Exhibit 10.12a to our Annual Report on Form 10-K filed on August 24, 2018) (SEC File No. 1-14064).*† | | |

| [removed: 10.14] [added: 10.15] | | | | | | Form of Deferred Compensation Agreement (stock-based) with Outside Directors (filed as Exhibit 10.15 to our Annual Report on Form 10-K filed on September 17, 2001) (SEC File No. 1-14064).*† | | |

| [removed: 10.14a] [added: 10.15a] | | | | | | Form of Deferred Compensation Agreement (stock-based) with Outside Directors (including Election Form) (filed as Exhibit 10.13a to our Annual Report on Form 10-K filed on August 24, 2018) (SEC File No. 1-14064).*† | | |

| [removed: 10.15] [added: 10.16] | | | | | | The Estee Lauder Companies Inc. Non-Employee Director Share Incentive Plan (as amended and restated on November 9, 2007) (filed as Exhibit 99.1 to our Registration Statement on Form S-8 filed on November 9, 2007) (SEC File No. 1-14064).*† | | |

| [removed: 10.15a] [added: 10.16a] | | | | | | The Estee Lauder Companies Inc. Non-Employee Director Share Incentive Plan (as amended on July 14, 2011) (filed as exhibit 10.15a to our Annual Report on Form 10-K filed on August 22, 2011) (SEC File No. 1-14064).*† | | |

| [removed: 10.15b] [added: 10.16b] | | | | | | The Estée Lauder Companies Inc. Amended and Restated Non-Employee Director Share Incentive Plan (filed as Exhibit 10.2 to our Current Report on Form 8-K filed on November 16, 2015) (SEC File No. 1-14064).*† | | |

| [removed: 10.15c] [added: 10.16c] | | | | | | The Estée Lauder Companies Inc. Amended and Restated Non-Employee Director Share Incentive Plan (as of November 1, 2017) (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 1, 2017) (SEC File No. 1-14064).*† | | |

| [removed: 10.15d] [added: 10.16d] | | | | | | The Estée Lauder Companies Inc. Amended and Restated Non-Employee Director Share Incentive Plan (as of August 22, 2019) (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on October 31, 2019) (SEC File No. 1-14064).*† | | |

| [removed: 10.15e] [added: 10.16e] | | | | | | The Estée Lauder Companies Inc. Amended and Restated Non-Employee Director Share Incentive Plan (as of July 13, 2021) [added: (filed as Exhibit 10.15e to our Annual Report on Form 10-K filed on August 27, 2021)] (SEC File No. [removed: 1-14064).†] [added: 1-14064).*†] | | |

| [removed: 10.16] [added: 10.17] | | | | | | Summary of Compensation For Non-Employee Directors of the Company (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 1, 2013) (SEC File No. 1-14064).*† | | |

| [removed: 10.16a] [added: 10.17a] | | | | | | Summary of Compensation For Non-Employee Directors of the Company (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 1, 2017) (SEC File No. 1-14064).*† | | |

| [removed: 10.16b] [added: 10.17b] | | | | | | Summary of Compensation For Non-Employee Directors of the Company [added: (filed as Exhibit 10.16b to our Annual Report on Form 10-K filed on August 27, 2021)] (SEC File No. [removed: 1-14064).†] [added: 1-14064).*†] | | |

| [removed: 10.17] [added: 10.18] | | | | | | Form of Stock Option Agreement for Annual Stock Option Grants under Non-Employee Director Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 99.2 to our Registration Statement on Form S-8 filed on November 9, 2007) (SEC File No. 1-14064).*† | | |

| [removed: 10.17a] [added: 10.18a] | | | | | | Form of Stock Option Agreement for Annual Stock Option Grants under the Amended and Restated Non-Employee Director Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on October 31, 2019) (SEC File No. 1-14064).*† | | |

| [removed: 10.18] [added: 10.19] | | | | | | The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (filed as Exhibit 10.17 to our Annual Report on Form 10-K filed on August 17, 2012) (SEC File No. 1-14064).*† | | |

| [removed: 10.18a] [added: 10.19a] | | | | | | The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on November 16, 2015) (SEC File No. 1-14064).*† | | |

| [removed: 10.18b] [added: 10.19b] | | | | | | The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (filed as Exhibit 10.16b to our Annual Report on Form 10-K filed on August 25, 2017) (SEC File No. 1-14064).*† | | |

| [removed: 10.18c] [added: 10.19c] | | | | | | The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on November 19, 2019) (SEC File No. 1-14064).*† | | |

| [removed: 10.18d] [added: 10.19d] | | | | | | Form of Stock Option Agreement under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November [removed: 1, 2010)] [added: 4, 2011)] (SEC File No. 1-14064).*† | | |

| [removed: 10.18e] [added: 10.19e] | | | | | | Form of Stock Option Agreement under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November [removed: 4, 2011)] [added: 2, 2012)] (SEC File No. 1-14064).*† | | |

| [removed: 10.18f] [added: 10.19f] | | | | | | Form of Stock Option Agreement under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit [removed: 10.1] [added: 10.16y] to our [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] filed on [removed: November 2, 2012)] [added: August 20, 2014)] (SEC File No. 1-14064).*† | | |

| [removed: 10.18g] [added: 10.19g] | | | | | | Form of Stock Option Agreement with Fabrizio Freda under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit [removed: 10.6] [added: 10.16z] to our [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] filed on [removed: November 2, 2012)] [added: August 20, 2014)] (SEC File No. 1-14064).*† | | |

| 10.3a | | | | | | Amendment to amended and restated The Estee Lauder Companies Retirement Growth Account Plan, effective as of May 31, 2022 (filed as Exhibit 10.1 on our Quarterly Report on Form 10-Q filed on May 3, 2022) (SEC File No. 1-14064).*† | | |

| 10.13 | | | | | | Employment Agreement with Jane Hertzmark Hudis (SEC File No. 1-14064).† | | |

| 10.21a | | | | | | Agreement of Sublease, dated May 18, 2022, between Editions de Parfums LLC, Sublandlord and Melville Management Corporation, Subtenant (SEC File No. 1-14064). | | |

| | | | | | | | | |

| 4.29 | | | | | | Officers’ Certificate, dated March 4, 2021, defining certain terms of the 1.950% Senior Notes due 2031 (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on March 4, 2021) (SEC File No. 1-14064).* | | |

| 4.30 | | | | | | Form of Global Note for the 1.950% Senior Notes due 2031 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on March 4, 2021) (SEC File No. 1-14064).* | | |

| 10.18y | | | | | | Form of Restricted Stock Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17z to our Annual Report on Form 10-K filed on August 23, 2019) (SEC File No. 1-14064).*† | | |

| 10.18z | | | | | | Form of Restricted Stock Unit Award Agreement for Employees other than Executive Officers under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17aa to our Annual Report on Form 10-K filed on August 23, 2019) (SEC File No. 1-14064).*† | | |

| 10.18aa | | | | | | Form of Restricted Stock Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.18bb to our Annual Report on Form 10-K filed on August 28, 2020) (SEC File No. 1-14064).*† | | |

| 10.18bb | | | | | | Form of Restricted Stock Unit Award Agreement for Employees other than Executive Officers under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.18cc to our Annual Report on Form 10-K filed on August 28, 2020) (SEC File No. 1-14064).*† | | |

| 10.18cc | | | | | | Form of Non-annual Restricted Stock Unit Award Agreement for Executive Officers under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.18dd to our Annual Report on Form 10-K filed on August 28, 2020) (SEC File No. 1-14064).*† | | |

| Date: August [removed: 27, 2021] [added: 24, 2022] | | | | | | | | |

| FABRIZIO FREDA* | | | | | | President, Chief Executive Officer and a Director (Principal Executive Officer) | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| WILLIAM P. LAUDER* | | | | | | Executive Chairman and a Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| LEONARD A. LAUDER* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| CHARLENE BARSHEFSKY* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| ROSE MARIE BRAVO* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| WEI SUN CHRISTIANSON* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| PAUL J. FRIBOURG* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| JENNIFER HYMAN* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| JANE LAUDER* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| RONALD S. LAUDER* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| RICHARD D. PARSONS* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| LYNN FORESTER DE ROTHSCHILD* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| BARRY S. STERNLICHT* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| JENNIFER TEJADA* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| RICHARD F. ZANNINO* | | | | | | Director | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

| /s/ TRACEY T. TRAVIS | | | | | | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | | | | | | August [removed: 27, 2021] [added: 24, 2022] | | |

[removed: THE ESTÉE LAUDER COMPANIES INC.][added: | Total stockholders’ equity – The Estée Lauder Companies Inc. | | | 5,590 | | | | | | 6,057 | | |]

| [Management’s Report on Internal Control Over Financial [removed: Reporting](#i3abf634c5cff49dda5f3a4237e4cefbb_91)] [added: Reporting](#i2ba0bd92bcb14d27a1d59d9667569d45_91)] | | | [removed: [F-](#i3abf634c5cff49dda5f3a4237e4cefbb_91)] [added: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_91)] | | | [removed: [2](#i3abf634c5cff49dda5f3a4237e4cefbb_91)] [added: [2](#i2ba0bd92bcb14d27a1d59d9667569d45_91)] | | |

| [Consolidated Statements of [removed: Earnings](#i3abf634c5cff49dda5f3a4237e4cefbb_100)] [added: Earnings](#i2ba0bd92bcb14d27a1d59d9667569d45_100)] | | | [removed: [F-](#i3abf634c5cff49dda5f3a4237e4cefbb_100)] [added: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_100)] | | | [removed: [8](#i3abf634c5cff49dda5f3a4237e4cefbb_100)] [added: [6](#i2ba0bd92bcb14d27a1d59d9667569d45_100)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i3abf634c5cff49dda5f3a4237e4cefbb_103)] [added: Income](#i2ba0bd92bcb14d27a1d59d9667569d45_103)] | | | [removed: [F-](#i3abf634c5cff49dda5f3a4237e4cefbb_103)] [added: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_103)] | | | [removed: [9](#i3abf634c5cff49dda5f3a4237e4cefbb_103)] [added: [7](#i2ba0bd92bcb14d27a1d59d9667569d45_103)] | | |

| [Consolidated Balance [removed: Sheets](#i3abf634c5cff49dda5f3a4237e4cefbb_106)] [added: Sheets](#i2ba0bd92bcb14d27a1d59d9667569d45_106)] | | | [removed: [F-](#i3abf634c5cff49dda5f3a4237e4cefbb_106)] [added: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_106)] | | | [removed: [10](#i3abf634c5cff49dda5f3a4237e4cefbb_106)] [added: [8](#i2ba0bd92bcb14d27a1d59d9667569d45_106)] | | |

| [Consolidated Statements of Equity and Redeemable Noncontrolling [removed: Interest](#i3abf634c5cff49dda5f3a4237e4cefbb_109)] [added: Interest](#i2ba0bd92bcb14d27a1d59d9667569d45_109)] | | | [removed: [F-](#i3abf634c5cff49dda5f3a4237e4cefbb_109)] [added: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_109)] | | | [removed: [11](#i3abf634c5cff49dda5f3a4237e4cefbb_109)] [added: [9](#i2ba0bd92bcb14d27a1d59d9667569d45_109)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i3abf634c5cff49dda5f3a4237e4cefbb_112)] [added: Flows](#i2ba0bd92bcb14d27a1d59d9667569d45_112)] | | | [removed: [F-](#i3abf634c5cff49dda5f3a4237e4cefbb_112)] [added: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_112)] | | | [removed: [12](#i3abf634c5cff49dda5f3a4237e4cefbb_112)] [added: [10](#i2ba0bd92bcb14d27a1d59d9667569d45_112)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i3abf634c5cff49dda5f3a4237e4cefbb_115)] [added: Statements](#i2ba0bd92bcb14d27a1d59d9667569d45_115)] | | | [removed: [F-](#i3abf634c5cff49dda5f3a4237e4cefbb_115)] [added: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_115)] | | | [removed: [13](#i3abf634c5cff49dda5f3a4237e4cefbb_115)] [added: [11](#i2ba0bd92bcb14d27a1d59d9667569d45_115)] | | |

| [Schedule II - Valuation and Qualifying [removed: Accounts](#i3abf634c5cff49dda5f3a4237e4cefbb_199)] [added: Accounts](#i2ba0bd92bcb14d27a1d59d9667569d45_202)] | | | [removed: [S-](#i3abf634c5cff49dda5f3a4237e4cefbb_199)] [added: [S-](#i2ba0bd92bcb14d27a1d59d9667569d45_202)] | | | [removed: [1](#i3abf634c5cff49dda5f3a4237e4cefbb_199)] [added: [1](#i2ba0bd92bcb14d27a1d59d9667569d45_202)] | | |

Based on this assessment, the Company’s management has concluded that, as of June 30, [removed: 2021,] [added: 2022,] 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, [removed: 2021] [added: 2022] 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.”

[added: |] August [removed: 27,] [added: 18,] 2021 [added: | | | | | | August 31, 2021 | | | | | | September 15, 2021 | | | | | | $ | .53 | |]

We have audited the accompanying consolidated balance [removed: sheet] [added: sheets] of The Estée Lauder Companies Inc. and its subsidiaries (the “Company”) as of June 30, [added: 2022 and] 2021, and the related consolidated statements of earnings, of comprehensive income, of equity and redeemable noncontrolling [removed: interest,] [added: interest] and of cash flows for [added: each of] the [removed: year then ended,] [added: two years in the period ended June 30, 2022,] including the related notes and schedule of valuation and qualifying accounts for [added: each of] the [removed: year] [added: two years in the period] ended June 30, [removed: 2021] [added: 2022] 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, [removed: 2021,] [added: 2022,] 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, [added: 2022 and] 2021, and the results of its operations and its cash flows for [added: each of] the [removed: year then] [added: two years in the period] ended [added: June 30, 2022] 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, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

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 [removed: audit.][added: audits.]

We conducted our [removed: audit] [added: audits] in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the [removed: audit] [added: 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 [removed: audit] [added: 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.

Our [removed: audit] [added: 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 [removed: audit] [added: audits] also included performing such other procedures as we considered necessary in the circumstances.

We believe that our [removed: audit provides] [added: audits provide] a reasonable basis for our opinions.

| ANGELA WEI DONG* | | | | | | Director | | | | | | August 24, 2022 | | |

| Angela Wei Dong | | | | | | | | | | | | | | |

| ARTURO NUÑEZ* | | | | | | Director | | | | | | August 24, 2022 | | |

| Arturo Nuñez | | | | | | | | | | | | | | |

| [Report of Independent Registered Public Accounting Firm (](#i2ba0bd92bcb14d27a1d59d9667569d45_94)PricewaterhouseCoopers LLP[,](#i2ba0bd92bcb14d27a1d59d9667569d45_94) New York, New York[, Auditor Firm ID:](#i2ba0bd92bcb14d27a1d59d9667569d45_94) 238[)](#i2ba0bd92bcb14d27a1d59d9667569d45_94) | | | [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_94) | | | [3](#i2ba0bd92bcb14d27a1d59d9667569d45_94) | | |

| [Report of Independent Registered Public Accounting Firm (](#i2ba0bd92bcb14d27a1d59d9667569d45_1664)KPMG LLP[,](#i2ba0bd92bcb14d27a1d59d9667569d45_1664) New York, New York[, Auditor Firm ID:](#i2ba0bd92bcb14d27a1d59d9667569d45_1664) 185[)](#i2ba0bd92bcb14d27a1d59d9667569d45_1664) | | | [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_1664) | | | [5](#i2ba0bd92bcb14d27a1d59d9667569d45_1664) | | |

*Interim and Annual Goodwill and Indefinite-Lived Intangible Assets Impairment Assessments - DECIEM Reporting Unit*

Management concluded that the changes in circumstances in the reporting units triggered the need for interim impairment reviews of the Company’s trademarks and goodwill.

Accordingly, management performed interim impairment tests as of February 28, 2022.

To determine the estimated fair value of the reporting units, management uses an equal weighting of the income and market approach.

The significant assumptions used in these approaches include revenue growth rates and profit margins, and the weighted-average cost of capital used to discount future cash flows for goodwill, and revenue growth rates, the weighted-average cost of capital to discount future cash flows, and royalty rates for trademarks.

| August 24, 2022 | | | | | |

| (In millions, except share data) | | | 2022 | | | | | | 2021 | | |

| | | | 18,952 | | | | | | 17,115 | | |

| Purchase of shares from noncontrolling interests | | | (19) | | | | | | — | | | | | | — | | |

| Purchase of shares from noncontrolling interests | | | (34) | | | | | | — | | | | | | — | | |

| Adjustment of redeemable noncontrolling interest to redemption value | | | (1) | | | | | | — | | | | | | — | | |

| Payment for acquisition of noncontrolling interest | | | | | | (15) | | | | | | — | | | | | | — | | |

Capital costs incurred while an asset is being built are classified as Construction in progress and are reclassified to its respective asset class when placed into service.

For fiscal 2022, the Company elected to perform the quantitative assessment for the goodwill in each of its reporting units and indefinite-lived intangible assets.

The Company engaged a third-party valuation specialist 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 other indefinite-lived intangible assets, the Company 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.

For lease modifications that result in partial termination of the lease, the Company has elected the proportional method whereby the carrying amount of the ROU asset is decreased in proportion with the full or partial termination of the lease based on the adjustment to the carrying value of the lease liability.

The difference between those adjustments is recognized in Selling, general and administrative expense in the accompanying consolidated statements of earnings at the effective date of the termination.

For treasury related arrangements, the Company references LIBOR in its interest rate swap agreements and LIBOR is also used for purposes of discounting certain foreign currency and interest rate forward contracts.

The Company is currently evaluating the potential impact of modifying treasury related arrangements and applying the relevant ASC 848 optional practical expedients, as needed.

For existing lease, debt arrangements and other contracts, the Company does not expect any qualifying contract modifications related to reference rate reform and therefore does not expect that the optional guidance in ASC 848 will need to be applied through December 31, 2022.

The Company will continue to monitor new contracts that could potentially be eligible for contract modification relief through December 31, 2022.

| | | | | | | $ | 2,920 | | | | | $ | 2,505 | |

| (In millions) | | | | | | 2022 | | | | | | 2021 | | |

| Leasehold improvements | | | | | | 2,246 | | | | | | 2,312 | | |

| Construction in progress | | | | | | 759 | | | | | | 647 | | |

| | | | | | | 6,140 | | | | | | 5,618 | | |

| | | | | | | $ | 2,650 | | | | | $ | 2,280 | |

The accounting for the DECIEM business combination was finalized during the fiscal 2022 third quarter.

A summary of the total consideration transferred, including immaterial measurement period adjustments was finalized during the fiscal 2022 third quarter and recorded as follows:

| (In millions) | | | | | | March 31, 2022 | | |

The allocation of the total consideration transferred, including immaterial measurement period adjustments was finalized during the fiscal 2022 third quarter and recorded as follows:

| (In millions) | | | | | | March 31, 2022 | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| IRVINE O. HOCKADAY, JR.* | | | | | | Director | | | | | | August 27, 2021 | | |

| Irvine O. Hockaday, Jr. | | | | | | | | | | | | | | |

| [Reports of Independent Registered Public Accounting Firms](#i3abf634c5cff49dda5f3a4237e4cefbb_1099511629489) | | | [F-](#i3abf634c5cff49dda5f3a4237e4cefbb_1099511629489) | | | [3](#i3abf634c5cff49dda5f3a4237e4cefbb_1099511629489) | | |

Management assessed the effectiveness of our internal control over financial reporting as of June 30, 2021.

SEC guidance permits companies to exclude certain acquisitions from the assessment of internal control over financial reporting during the first year following the acquisition.

Accordingly, management excluded the internal controls relating to Deciem Beauty Group Inc. (“DECIEM”) from its fiscal 2021 annual assessment of the effectiveness of internal control over financial reporting.

On May 18, 2021, the Company increased its ownership interest in DECIEM from approximately 29% to approximately 76%.

For the fiscal year ended June 30, 2021, DECIEM's financial results constitute approximately 0.4% of total net sales and 2% of total assets of the consolidated financial statement amounts.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Deciem Beauty Group Inc. (“DECIEM”) from its assessment of internal control over financial reporting as of June 30, 2021.

The Company increased its ownership interest in DECIEM from approximately 29% to approximately 76% in May 2021, resulting in the entity becoming a consolidated subsidiary.

We have also excluded DECIEM from our audit of internal control over financial reporting.

DECIEM’s total assets and total net sales excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 2% and 0.4%, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30, 2021.

*Indefinite-Lived Impairment Assessment - Dr. Jart+ Trademark*

The quantitative impairment test for indefinite-lived intangible assets encompasses calculating the fair value of an indefinite-lived intangible asset and comparing the fair value to its carrying value.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

*Acquisition of DECIEM - Valuation of Intangible Assets and net Put (Call) Option*

As described in Notes 2 and 5 to the consolidated financial statements, in 2021, the Company acquired additional shares in Deciem Beauty Group Inc. (“DECIEM”) for $1,092 million in cash, including proceeds from the issuance of debt, which resulted in recording $1,917 million of customer relationships and trademark intangible assets.

The Company was granted the right to purchase (“Call Option”), and granted the remaining investors a right to sell to the Company (“Put Option”), the remaining interests, with a purchase price based on the future performance of DECIEM (the “net Put (Call) Option”).

As a result of this redemption feature, management recorded redeemable noncontrolling interest, at its acquisition-date fair value, that is classified as mezzanine equity in the consolidated balance sheet.

To determine the acquisition-date estimated fair value of intangible assets acquired, management applied the income approach, specifically the multi-period excess earnings method for customer relationships and the relief-from-royalty method for trademarks.

The principal considerations for our determination that performing procedures relating to the valuation of acquired intangible assets and the net Put (Call) Option relating to the acquisition of DECIEM is a critical audit matter are (i) the significant judgment by management when determining the fair value estimates of the acquired intangible assets and the net Put (Call) Option; (ii) the high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates and weighted-average cost of capital used to discount future cash flows for customer relationships, and revenue growth rates, terminal values, weighted-average cost of capital used to discount future cash flows, and royalty rates for trademarks, and starting equity value, revenue growth rates and EBITDA, risk free rate, term, operating leverage adjustment, net sales discount rate, EBITDA discount rate, EBITDA volatility, and net sales volatility for the net Put (Call) Option; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to the accounting for business combinations, including controls over management’s valuation of the intangible assets and net Put (Call) Option.

These procedures also included, among others, (i) reading the purchase agreement; (ii) testing management’s process for determining the fair value estimates of the intangible assets and net Put (Call) option; (iii) evaluating the appropriateness of the multi-period excess earnings method for customer relationships, the relief-from-royalty method for trademarks, and the Monte Carlo method for the net Put (Call) Option; (iv) testing the completeness and accuracy of the underlying data used in the fair value estimates; and (v) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates and weighted-average cost of capital used to discount future cash flows for customer relationships, and revenue growth rates, terminal values, weighted-average cost of capital used to discount future cash flows, and royalty rates for trademarks.

Evaluating management’s assumptions related to revenue growth rates for customer relationships, and revenue growth rates and terminal values for trademarks involved evaluating whether the assumptions were reasonable considering (i) the current and past performance of DECIEM; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Evaluating the appropriateness of the Monte Carlo method and management’s assumptions related to the net Put (Call Option) involved professionals with specialized skill and knowledge to assist in developing an independent value for each option and comparing to management’s estimate to evaluate the reasonableness of management’s estimate.

Developing an independent value for each option involved developing an independent Monte Carlo simulation model, testing the completeness and accuracy of the contractual information used by management to calculate the agreed-upon price to acquire the remaining equity interests in DECIEM, and evaluating the reasonableness of the assumptions used by management to estimate DECIEM’s equity value.

Professionals with specialized skill and knowledge were also used to assist in (i) evaluating the appropriateness of the Company’s multi-period excess earnings method for customer relationships and relief-from-royalty method for trademarks; and (ii) evaluating the appropriateness of the weighted-average cost of capital used to discount future cash flows and royalty rates assumptions.

| August 27, 2021 | | | | | |

*Change in Accounting Principle*

As discussed in Note 7 to the consolidated financial statements, the Company has changed its method of accounting for leases effective July 1, 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases.

| Net unrealized investment gain | | | | | | — | | | | | | — | | | | | | 14 | | |

| | | | 17,115 | | | | | | 14,265 | | |

| Total stockholders’ equity – The Estée Lauder Companies Inc. | | | 6,057 | | | | | | 3,935 | | | | | | 4,386 | | |

| Gain on liquidation of an investment in a foreign subsidiary, net | | | | | | — | | | | | | — | | | | | | (71) | | |

| Proceeds from the disposition of investments | | | | | | — | | | | | | — | | | | | | 1,229 | | |

| Proceeds from sale of property, plant and equipment | | | | | | — | | | | | | — | | | | | | 2 | | |