Estée Lauder (EL) 10-K risk factor changes: FY2023 vs FY2022

If we are unable to anticipate and respond to [removed: sudden] challenges that we may face in the marketplace, trends in the market for our products and changing consumer demands and sentiment, our financial results will suffer.

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

From time to time, we announce certain initiatives, including goals and commitments, regarding our focus areas, which include environmental [removed: matters, packaging, responsible sourcing,] [added: and climate matters; packaging; sourcing; product formulation;] social [removed: investments] [added: investments;] and [removed: inclusion] [added: inclusion, diversity] and [removed: diversity.][added: equity.]

A general economic downturn, or [removed: sudden] disruption in business conditions may affect [added: our business including] consumer purchases of discretionary items and/or the financial strength of our customers that are retailers, which could adversely affect our financial results.

In addition, [removed: sudden] disruptions in local or global business conditions, for example, from events such as a pandemic or other health issues, geo-political or local conflicts, civil unrest, terrorist attacks, adverse weather conditions, climate changes or seismic events, can have a short-term and, sometimes, long-term impact on consumer spending.

A downturn in the economies of, or continuing recessions in, the countries where we sell our products or a [removed: sudden] disruption of business conditions in those countries could adversely affect consumer confidence, the financial strength of our retailers and our sales and profitability.

We operate on a global basis, with a substantial majority of our fiscal [removed: 2022] [added: 2023] net sales and operating income generated outside the United States.

A disruption in our [removed: operations or] [added: operations, including] supply [removed: chain] [added: chain,] could adversely affect our business.

[removed: As a company engaged in manufacturing and distribution on a global scale, we are subject to the] [added: Such] risks [removed: inherent in such activities, including] [added: include] 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 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 [removed: disasters] [added: disasters, outages due to fire, floods, power loss, telecommunications failures, break-ins] and other [added: events or] external factors over which we have no control.

We rely on information technology that supports our business processes, including [added: research and development,] product development, [added: production, distribution,] marketing, sales, order processing, [removed: production, distribution,] [added: consumer experiences, human resource management,] finance and [removed: intracompany] [added: internal and external] communications throughout the world.

As part of our normal business activities, we collect and store certain information that is confidential, proprietary or otherwise sensitive, including personal information [removed: with respect to] [added: of consumers,] customers, [removed: consumers] [added: suppliers, service providers] and employees.

We share some of this information with certain [removed: vendors] [added: third parties] who assist us with business matters.

Moreover, the success of our [removed: e-commerce and m-commerce] operations depends upon the secure transmission of [removed: confidential and] [added: confidential, proprietary or otherwise sensitive data, including] personal [removed: data] [added: information,] over [removed: public networks, including the use of cashless payments.][added: networks.]

Any [added: unauthorized access or data acquisition, despite security measures in place to protect such data, or other] failure on the part of us or [removed: our vendors] [added: third parties] to maintain the security of [removed: our confidential] [added: such] data [removed: and personal information, including via the penetration of our network security and the misappropriation of confidential and personal information,] could result in business disruption, damage to our reputation, financial obligations to third parties, [added: legal obligations,] fines, penalties, regulatory proceedings and private litigation with potentially large costs, and also [added: could] result in deterioration in [removed: our employees’, consumers’ and customers’] confidence in [removed: us] [added: our Company] and other competitive disadvantages, and thus could have a material adverse effect on our business.

In addition, a [removed: security or data privacy breach] [added: cybersecurity incident] could require that we expend significant additional resources [removed: to enhance our information security systems] [added: on remediation, restoration] and [removed: could result in a disruption to] [added: enhancement of] our [removed: operations.][added: information technology.]

Going forward, at any time, we could [removed: stop or] [added: stop,] suspend [removed: payment] [added: or change the amounts] of dividends or stop or suspend our stock repurchase program, and any such action could cause the market price of our stock to decline.

As of August [removed: 17, 2022,] [added: 11, 2023,] 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 84% of the outstanding voting power of the Common Stock.

While we have voluntarily caused our Board to have a majority of independent directors and the written charters of our Nominating and ESG Committee and [removed: the] Compensation Committee to have the required provisions, we are not requiring our Nominating and ESG Committee and Compensation Committee to be comprised solely of independent directors.

As a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities.

The compromise or interruption of, or damage to, our information technology (including our operational technology and websites) by cybersecurity incidents, data security breaches, other security problems, design defects or system failures could have a material negative impact on our business.

We experience cybersecurity incidents of varying degrees on our information technology and, as a result, unauthorized parties have obtained in the past, and may obtain in the future, access to our systems and data (including unauthorized acquisition of such data).

As we disclosed on July 18, 2023, and as noted in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, an unauthorized third party gained access to some of our systems and data (including unauthorized acquisition of such data), which caused disruption to parts of our business operations and resulted in various expenses for investigation, remediation and other related matters.

Cybersecurity incidents at our Company have in the past resulted from, and may in the future result from, social engineering or impersonation of authorized users, and may also result from efforts to discover and exploit design flaws, bugs, security vulnerabilities or security weaknesses, intentional or unintentional acts by employees or other insiders with access privileges, intentional acts of vandalism or fraud by third parties and sabotage.

In some instances, efforts to correct vulnerabilities or prevent incidents have in the past and may in the future reduce the functionality or performance of our information technology, which could negatively impact our business.

Cybersecurity incidents can be caused by ransomware, distributed denial-of-service attacks, worms, and other malicious software programs or other attacks, including the covert introduction of malware to our information technology, and the use of techniques or processes that change frequently, may be disguised or difficult to detect, or are designed to remain dormant until a triggering event, and may continue undetected for an extended period of time.

In addition, some of our suppliers, vendors, service providers, cloud solution providers and customers have in the past experienced, and may in the future experience, such incidents, which could in turn disrupt our business.

The extent to which the COVID-19 pandemic could materially adversely affect our financial results will depend on future developments that are highly uncertain and difficult to predict.

The outbreak and global spread of the COVID-19 pandemic has continued to significantly disrupt our operating environment, including retail stores, travel retail, and the ability of some of our customers to operate.

We have also seen shifts in consumer preferences and practices.

Considerable uncertainty remains regarding this pandemic, including responsive measures being taken by various authorities and others.

As we continue to monitor COVID-19 developments, including the impacts on our consumers, customers and suppliers, we have taken and will continue to take further measures.

Some of the actions we take could adversely impact our business, and there is no certainty that our actions will be sufficient to mitigate the risks and the impacts of COVID-19.

The degree to which COVID-19 continues to impact our business will depend on future developments that are highly uncertain and cannot be predicted, many of which are outside our control, including the extent to which there are sustainable improvements in the retail environment and general economic conditions.

We continue to see the shift in consumer preference to the online channel, which accelerated in response to the COVID-19 pandemic.

Our information technology and websites may be susceptible to cybersecurity breaches, outages and other risks.

These systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, break-ins and other events.

Our systems and data may be vulnerable to constantly evolving cybersecurity threats such as malware, break-ins and similar disruptions from unauthorized tampering.

The occurrence of these or other events could disrupt or damage our information technology, including operational technology, and adversely affect our business.

Failure to adequately maintain the security of our electronic and other confidential information could materially adversely affect our business.

We are dependent upon automated information technology processes.

Furthermore, third parties, including our suppliers and customers, also rely on information technology and may be subject to cybersecurity breaches that could impact their businesses and could in turn disrupt our supply chain and/or our business.

We are subject to risks associated with our global information technology.

Our implementation, maintenance and utilization of global information technology, including operational technology, supply chain and finance systems, human resource management systems, creative asset management and retail operating systems, as well as associated hardware and use of cloud-based models, involve risks and uncertainties.

Failure to implement, maintain or utilize these and other systems as planned, in terms of timing, specifications, security policies, costs, or otherwise, could have a material adverse effect on our business.

The following table is a comparative summary of operating results for fiscal [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] and reflects the basis of presentation described in *Item 8.

| (In millions) | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Skin Care | | | | | | $ | [removed: 9,886] [added: 8,202] | | | | | $ | [removed: 9,484] [added: 9,886] | | | | | $ | [removed: 7,382] [added: 9,484] | |

| Makeup | | | | | | [removed: 4,667] [added: 4,516] | | | | | | [removed: 4,203] [added: 4,667] | | | | | | [removed: 4,794] [added: 4,203] | | |

| Fragrance | | | | | | [removed: 2,508] [added: 2,512] | | | | | | [removed: 1,926] [added: 2,508] | | | | | | [removed: 1,563] [added: 1,926] | | |

| Hair Care | | | | | | [removed: 631] [added: 653] | | | | | | [removed: 571] [added: 631] | | | | | | [removed: 515] [added: 571] | | |

| Other | | | | | | [removed: 49] [added: 54] | | | | | | [removed: 45] [added: 49] | | | | | | [removed: 40] [added: 45] | | |

| | | | | | | [removed: 17,741] [added: 15,937] | | | | | | [removed: 16,229] [added: 17,741] | | | | | | [removed: 14,294] [added: 16,229] | | |

| Returns associated with restructuring and other activities | | | | | | [removed: (4)] [added: (27)] | | | | | | [removed: (14)] [added: (4)] | | | | | | [removed: —] [added: (14)] | | |

| Net sales | | | | | | $ | [removed: 17,737] [added: 15,910] | | | | | $ | [removed: 16,215] [added: 17,737] | | | | | $ | [removed: 14,294] [added: 16,215] | |

| The Americas | | | | | | $ | [removed: 4,623] [added: 4,518] | | | | | $ | [removed: 3,797] [added: 4,623] | | | | | $ | [removed: 3,794] [added: 3,797] | |

| Europe, the Middle East & Africa | | | | | | [removed: 7,681] [added: 6,225] | | | | | | [removed: 6,946] [added: 7,681] | | | | | | [removed: 6,262] [added: 6,946] | | |

| Asia/Pacific | | | | | | [removed: 5,437] [added: 5,194] | | | | | | [removed: 5,486] [added: 5,437] | | | | | | [removed: 4,238] [added: 5,486] | | |

| | | | | | | [removed: 17,741] [added: 15,937] | | | | | | [removed: 16,229] [added: 17,741] | | | | | | [removed: 14,294] [added: 16,229] | | |

| Returns associated with restructuring and other activities | | | | | | [removed: (4)] [added: (27)] | | | | | | [removed: (14)] [added: (4)] | | | | | | [removed: —] [added: (14)] | | |

| Net sales | | | | | | $ | [removed: 17,737] [added: 15,910] | | | | | $ | [removed: 16,215] [added: 17,737] | | | | | $ | [removed: 14,294] [added: 16,215] | |

| Skin Care | | | | | | $ | [removed: 2,753] [added: 1,204] | | | | | $ | [removed: 3,036] [added: 2,753] | | | | | $ | [removed: 2,125] [added: 3,036] | |

| Makeup | | | | | | [removed: 133] [added: (22)] | | | | | | [removed: (384)] [added: 133] | | | | | | [removed: (1,438)] [added: (384)] | | |

| Fragrance | | | | | | [removed: 456] [added: 440] | | | | | | [removed: 215] [added: 456] | | | | | | [removed: 17] [added: 215] | | |

| Hair Care | | | | | | [removed: (28)] [added: (34)] | | | | | | [removed: (19)] [added: (28)] | | | | | | (19) | | |

| Other | | | | | | [removed: —] [added: 6] | | | | | | [removed: (2)] [added: —] | | | | | | [removed: 4] [added: (2)] | | |

| | | | | | | [removed: 3,314] [added: 1,594] | | | | | | [removed: 2,846] [added: 3,314] | | | | | | [removed: 689] [added: 2,846] | | |

| Charges associated with restructuring and other activities | | | | | | [removed: (144)] [added: (85)] | | | | | | [removed: (228)] [added: (144)] | | | | | | [removed: (83)] [added: (228)] | | |

| Operating income | | | | | | $ | [removed: 3,170] [added: 1,509] | | | | | $ | [removed: 2,618] [added: 3,170] | | | | | $ | [removed: 606] [added: 2,618] | |

| The Americas | | | | | | $ | [removed: 1,159] [added: (73)] | | | | | $ | [removed: 518] [added: 1,159] | | | | | $ | [removed: (1,044)] [added: 518] | |

| Europe, the Middle East & Africa | | | | | | [removed: 1,360] [added: 843] | | | | | | [removed: 1,335] [added: 1,360] | | | | | | [removed: 997] [added: 1,335] | | |

| Asia/Pacific | | | | | | [removed: 795] [added: 824] | | | | | | [removed: 993] [added: 795] | | | | | | [removed: 736] [added: 993] | | |

| | | | | | | [removed: 3,314] [added: 1,594] | | | | | | [removed: 2,846] [added: 3,314] | | | | | | [removed: 689] [added: 2,846] | | |

| Charges associated with restructuring and other activities | | | | | | [removed: (144)] [added: (85)] | | | | | | [removed: (228)] [added: (144)] | | | | | | [removed: (83)] [added: (228)] | | |

| Operating income | | | | | | $ | [removed: 3,170] [added: 1,509] | | | | | $ | [removed: 2,618] [added: 3,170] | | | | | $ | [removed: 606] [added: 2,618] | |

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Cost of sales | | | | | | [removed: 24.3] [added: 28.7] | | | | | | [removed: 23.6] [added: 24.3] | | | | | | [removed: 24.8] [added: 23.6] | | |

| Gross profit | | | | | | [removed: 75.7] [added: 71.3] | | | | | | [removed: 76.4] [added: 75.7] | | | | | | [removed: 75.2] [added: 76.4] | | |

| Selling, general and administrative | | | | | | [removed: 55.7] [added: 60.2] | | | | | | [removed: 57.8] [added: 55.7] | | | | | | [removed: 60.4] [added: 57.8] | | |

| Restructuring and other charges | | | | | | [removed: 0.8] [added: 0.3] | | | | | | [removed: 1.3] [added: 0.8] | | | | | | [removed: 0.5] [added: 1.3] | | |

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

| Impairment of other intangible and long-lived assets | | | | | | [removed: 1.4] [added: 1.3] | | | | | | [removed: 0.8] [added: 1.4] | | | | | | [removed: 4.3] [added: 0.8] | | |

| Total operating expenses | | | | | | [removed: 57.9] [added: 61.8] | | | | | | [removed: 60.2] [added: 57.9] | | | | | | [removed: 70.9] [added: 60.2] | | |

| Operating income | | | | | | [removed: 17.9] [added: 9.5] | | | | | | [removed: 16.1] [added: 17.9] | | | | | | [removed: 4.2] [added: 16.1] | | |

| Interest expense | | | | | | [removed: 0.9] [added: 1.6] | | | | | | [removed: 1.1] [added: 0.9] | | | | | | 1.1 | | |

The percentages disclosed for these impacts are calculated on an individual basis.

During the fiscal year ended June 30, 2023, the operating environment continued to be disrupted by the impact of the COVID-19 pandemic.

Most notably, the pace of recovery in Asia travel retail and mainland China was slower than anticipated.

In Hainan, prolonged store closures initially presented a headwind and, thereafter, low levels of conversion occurred when travel resumed.

This was compounded by inventory tightening by certain retailers.

In Korea, the travel retail business slowed during the transition to post-COVID-19 regulations.

In addition, the slower than anticipated resumption of international flights, granting of visas, and organized group tours further challenged the Asia travel retail recovery.

As a result, our Asia travel retail business was challenged throughout the fiscal year by the slower than anticipated recovery.

In mainland China, our performance in the first half of fiscal 2023 was hindered by low retail traffic as a result of COVID-19-related restrictions and the rise in COVID-19 cases.

Elsewhere, the recovery from the COVID-19 pandemic progressed across markets globally over the course of the fiscal year as restrictions lifted.

In the West, our recovery from the pandemic continued with net sales growth in many markets in Europe, the Middle East & Africa and in Latin America.

In Asia/Pacific, certain of our markets emerged strongly into recovery across the fiscal year, to deliver net sales growth throughout the region.

In the United States, net sales was unfavorably impacted by the slower than anticipated pace of our improvement at retail and the tightening of inventory in certain retailers in the first half of fiscal 2023 due to inflationary pressures and recession concerns.

Finally, our business was also pressured by the strong U.S dollar, inflation and recession concerns globally.

During fiscal 2023, net sales decreased 10%, reflecting the impacts noted above.

- Our skin care net sales declined 17%, including the unfavorable impact of foreign currency translation of 3%, driven by declines from Estée Lauder, La Mer and Dr.Jart+, primarily reflecting the challenges in our Asia travel retail business throughout the year, as previously discussed.

Partially offsetting these declines was growth in every geographic region from The Ordinary, reflecting the success of hero products and new product launches, and from M·A·C, driven by the launch of the Hyper Real line of products.

- Our makeup net sales decreased 3%, primarily due to the unfavorable impact of foreign currency translation of 4%.

Net sales declines from Estée Lauder, TOM FORD and La Mer, primarily reflect the challenges in Asia travel retail throughout the year and in mainland China in the first half of the fiscal year, as previously discussed, were partially offset by higher net sales from M·A·C, primarily driven by the recognition of the previously deferred revenue due to changes to the BACK-To-M·A·C take back program, and Clinique.

- Our fragrance net sales remained virtually flat as growth driven by Estée Lauder, Le Labo, TOM FORD, Clinique, and Kilian Paris was offset by the impact of the license terminations effective June 30, 2022 related to certain of our designer fragrances of 9% and the unfavorable impact of foreign currency translation of 4%.

- Our hair care net sales increased 3%, driven by higher net sales from The Ordinary reflecting the recent launch of hair care products by the brand, partially offset by the unfavorable impact of foreign currency translation of 3%.

- Net sales in The Americas decreased 2%, primarily driven by a decrease in the United States, reflecting the slower than anticipated pace of our improvement at retail, the tightening of inventory from certain of our retailers during the first half of fiscal 2023 and the impact of the license terminations related to certain of our designer fragrances.

Partially offsetting this decrease in The Americas was an increase in net sales in Latin America, led by Brazil and Mexico, driven by growth in makeup, which reflected new product launches and successful performance during key shopping moments.

- Net sales in Europe, the Middle East & Africa decreased 19%, including the unfavorable impact of foreign currency translation of 3%, driven primarily by lower net sales from our travel retail business reflecting the challenges in our Asia travel retail business as previously discussed.

- Net sales in Asia/Pacific decreased 4%, driven by the unfavorable impact of foreign currency translation of 8% and the challenges stemming from the COVID-19 pandemic, led by our Dr.Jart+ travel retail business in Korea, partially offset by the increase in net sales in Hong Kong SAR and Macau SAR and Southeast Asia, reflecting the continued COVID-19 recovery and successful brand activations and new product launches in Hong Kong SAR and Macau SAR.

We are experiencing a more gradual and prolonged recovery from the COVID-19 pandemic, particularly in our Asia travel retail business.

In Asia travel retail, there have been, and are likely to continue to be, impacts on our business in the near-term, from the slower than anticipated depletion of elevated levels of retailer inventory and, therefore, lower replenishment orders, as well as the slower than anticipated resumption of international flights, granting of visas, and organized group tours.

Additionally, in Korea, the shipments to duty free retailers were pressured owing to the transition to post-COVID-19 regulations as traveling consumers gradually return.

For example, the strengthening of the U.S. dollar could negatively impact results within Europe, the Middle East & Africa due to pricing pressures on our retail customers and consumers in key international travel retail locations.

As the invasion of Ukraine continues and international sanctions evolve, we have scaled down our operations in Russia.

We expect to continue selling a limited selection of products to retailers in Russia.

We also note that worsening conditions could exacerbate economic challenges in other countries such as inflationary pressures, energy shortages, recessions or other consequences.

Cybersecurity Incident Disclosed in July 2023

As previously disclosed on July 18, 2023, we identified a cybersecurity incident in which an unauthorized third party gained access to some of our systems.

After becoming aware of the incident, we proactively took down some of our systems to help secure our business operations and subsequently brought back online core systems within days.

While the response to the incident resulted in some disruptions to our business operations, most notably general corporate activities and order processing, our production and sales operations were minimally impacted.

Our investigation into the systems and the unauthorized access is substantially complete.

We determined that the unauthorized third party obtained some data from our systems.

We are continuing to work to understand the nature and scope of the data obtained, and can confirm, based on the investigation to date, that the data obtained includes some consumer data (such as names, contact information, and dates of birth).

We took steps, and continue to take steps, to enhance the security of our systems.

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.

COVID-19 Business Update

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.

Government Assistance

Beginning in the second half of fiscal 2020, many governments in locations where we operate announced programs to assist employers whose businesses were impacted by the COVID-19 pandemic, including programs that provide rebates to incentivize employers to maintain employees on payroll who were unable to work for their usual number of hours.

During fiscal 2022, 2021 and 2020, we qualified for and recorded $12 million, $84 million and $99 million, respectively, in government assistance, which reduced Selling, general and administrative expenses by $9 million, $78 million and $87 million, respectively, and Cost of sales by $3 million, $6 million and $10 million, respectively.

The remaining $2 million recorded in fiscal 2020 was deferred and recognized in fiscal 2021 as a reduction to Cost of sales.

- 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.

- Online net sales have continued to grow on a global basis, rising double digits for fiscal 2022.

Our multiple engines of growth, which have historically enabled us to produce excellent net sales growth, are also helping to mitigate the impact of the COVID-19 pandemic.

We also benefited from the transformation of certain operations that freed up resources to invest behind further growth opportunities.

Our Post-COVID Business Acceleration Program (described below) enabled us to reduce costs and invest in new capabilities such as digital marketing and data analytics as well as increased advertising.

Other areas of focus include responsible sourcing, plastics & packaging, ingredient transparency, and animal welfare.

The COVID-19 pandemic continues to disrupt business for us, retailers and other companies with which we do business.

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

We are mindful that these trends may continue to impact the pace of recovery.

The continued curtailment in international travel is also affecting our travel retail business, particularly in Asia, which had been historically one of our fastest growth areas.

The Estée Lauder Companies Inc., founded in 1946 by Estée and Joseph Lauder, is one of the world’s leading manufacturers, marketers and sellers of quality skin care, makeup, fragrance and hair care [removed: products.][added: products, and is a steward of luxury and prestige brands globally.]

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 [removed: Brown,] [added: Brown Cosmetics,] La Mer, Aveda, Jo Malone London, [added: TOM FORD,] Too Faced, Dr.Jart+, and The Ordinary.

We are also the global licensee of [added: the AERIN and BALMAIN] brand names for fragrances [removed: and/or cosmetics, including Tom Ford] and [removed: AERIN.][added: cosmetics.]

Members of the Lauder family, some of whom are directors, executive officers and/or employees, beneficially own, directly or indirectly, as of August [removed: 17, 2022,] [added: 11, 2023,] shares of our Company's Class A Common Stock and Class B Common Stock having approximately 84% of the outstanding voting power of the Common Stock.

[removed: ][added: ]

Skin Care - Our broad range of skin care products [removed: addresses] [added: address] various skin care needs.

These products include moisturizers, serums, cleansers, toners, body care, exfoliators, acne [removed: care] and oil correctors, facial [removed: masks,] [added: masks] and sun care products.

Below is a chart showing [removed: most of] the brands that we sell and how we view them based on lifestyle and price point:

[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 [removed: makeup, fragrance] [added: makeup] and [removed: hair care] [added: fragrance] products and is distributed primarily through online, specialty-multi and 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: ] | | | | | | 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, 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: ] | | | | | | [removed:  ] [added:  ] | | |

| [added: ] | | | [added: | | |] In 2021, we increased our investment in Deciem Beauty Group Inc. (“DECIEM”) to approximately 76%. Known as “The Abnormal Beauty Company,” DECIEM is a Toronto-based, vertically integrated multi-brand beauty company rooted in a consumer-focused and functional approach. Its portfolio includes The Ordinary, an ingredient-focused brand, and NIOD, a science-driven skin care brand. | | | [removed: | | |]

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

[removed: We previously announced that] [added: In fiscal 2022,] we [removed: would not be renewing] [added: negotiated early termination agreements for] our [added: previous] license agreements for the Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna product lines [removed: when their respective terms expire in] [added: effective] June [removed: 2023.][added: 30, 2022 and continued to sell products under these licenses through such time.]

Our [removed: “heritage] [added: “large] brands” are Estée Lauder, [removed: Clinique] [added: La Mer, M·A·C] and [removed: Origins.][added: Clinique.]

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

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

These initiatives [added: also] aim to foster employee engagement and build consumer trust and loyalty.

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

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

As of June 30, [removed: 2022,] [added: 2023,] we operated approximately 1,600 freestanding stores.

Other - We also sell ancillary products and services that do not fit the definition of skin care, makeup, fragrance, and hair care.

The other category also includes royalty revenue from our licensing of the TOM FORD trademark to third parties since our fiscal 2023 acquisition of the TOM FORD brand.

|  | | | | | | On April 28, 2023, we acquired the TOM FORD brand and related intellectual property. The TOM FORD brand is a luxury brand created in 2005, encompassing fashion, fragrance, eyewear and other accessories. From 2005 until the closing of the acquisition, we developed, manufactured and distributed luxury fragrances and beauty products as a licensee. As the current owner and steward of the brand, we are continuing with the beauty products and have licensed the fashion brand and operations and eyewear to third parties. Consistent with the fashion brand, our products exude seductive modern-day glamour and include luxury fragrance, color cosmetics, men’s grooming products and skin care products for discerning consumers globally. | | |

Our “scaling brands” are Jo Malone London, TOM FORD, Aveda, Bobbi Brown Cosmetics and The Ordinary.

Our “developing brands” are Le Labo, Too Faced, Dr.Jart+, Origins, Kilian Paris, Bumble and bumble, Smashbox, Darphin Paris, Lab Series, Editions de Parfums Frédéric Malle and GLAMGLOW.

Certain goals are also intended to help us reduce cost and waste.

Our “emerging markets” in Europe, the Middle East & Africa are India, the Middle East, Turkey, South Africa, Central Europe, Israel, Russia and Kazakhstan; in Asia/Pacific are Thailand, Malaysia, Vietnam, Indonesia, the Philippines and Singapore; and in The Americas are Brazil, Mexico, Chile, Colombia, Panama, Peru and Argentina.

As consumer behaviors, digital-first consumer journeys and e-commerce evolve, we adjust our direct-to-consumer business models and consumer engagement programs.

We are focused on optimizing adoption of such investments to maximize return on investment and realized value.

The modernization and simplification of our technology ecosystem remains a key focus, as we increasingly leverage the benefits of the cloud.

In fiscal 2023, we made investments in research and pilots of technologies that serve and attract new consumers.

As the working environment for our team members evolve, including hybrid ways of working for our employees, we continue to invest in hardware, software, education and support structures that drive productive, collaborative facilities and meeting spaces, both virtually and in person.

We expect the remainder of the site to be completed and operational in early fiscal 2024, with production levels scaling over the next few years.

During fiscal 2023, we continued to support the growth of our business in China with the opening of an additional distribution center in Guangzhou.

We also partner with an extensive and reliable network of third-party manufacturers that help us access innovation and capacity.

We remained resolute in our commitment to prioritize racial equity, diligently advancing our previously announced series of commitments across the business, with a focus on U.S. operations.

We are expanding access to this marketplace to all employees globally in fiscal 2024.

| Stéphane de La Faverie | | | | | | 49 | | | | | | Executive Group President | | |

| Jane Lauder | | | | | | 50 | | | | | | Executive Vice President, Enterprise Marketing and Chief Data Officer and a Director | | |

*as of August 11, 2023

*as of August 11, 2023

For a discussion of recent developments relating to the COVID-19 pandemic, see *Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Overview*.

Other - We also sell ancillary products and services.

|  | | | | | | 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. | | |

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.

Our “makeup artist brands” are M·A·C and Bobbi Brown.

Our “designer fragrances” are sold under the Tommy Hilfiger, Donna Karan New York, DKNY, Michael Kors, and Ermenegildo Zegna brand names, which we license from their respective owners.

Through our flexible global distribution network we have generally been able to respond to the shifts in consumer landscape and consumer behaviors attributable to the COVID-19 pandemic.

In addition, we sell certain products in select domestic and international U.S. military exchanges.

Our largest customer in fiscal 2022 sells products primarily in China travel retail and accounted for 13% of our consolidated net sales for fiscal 2022, 14% for fiscal 2021 and 7% for fiscal 2020, and 24% and 10% of our accounts receivable at June 30, 2022 and 2021, respectively.

The onset of the COVID-19 pandemic had a significant impact on consumer behaviors and accelerated the trend for a digital-first consumer journey and e-commerce.

This provided a catalyst for redesigning each brand's “High-Touch” experience and accelerated changes to our direct-to-consumer business models and consumer engagement programs, such as selling through social media and web conferencing platforms (“Virtual Selling”).

An increasing portion of our global information technology infrastructure is cloud-based.

This allows for a more scalable platform to support current and future requirements and improves our agility and flexibility to respond to the demands of the business by leveraging more advanced technologies.

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.

We also continued to invest in new marketing and consumer engagement capabilities globally with a focus on innovative digital experiences across our omnichannel landscape.

Our strategy over the next few years includes continuing to build a strong and secure technology infrastructure to adapt to evolving business dynamics, which includes the expansion of our seamless omnichannel capabilities and our Virtual Selling, the creation of more modernized manufacturing and distribution facilities (including upgrades to existing facilities) powered by technology and the utilization of predictive analytics to optimize our supply and demand planning.

Construction is nearly completed and the facility is now expected to be operational in early fiscal 2023.

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.

We also face competition from a number of independent brands, some of which are backed by private-equity investors, as well as some retailers that have their own beauty brands.

We have accelerated our efforts to make racial equity a priority by announcing a series of commitments across our business, focusing on U.S. operations.

In response to the on-going challenges stemming from the COVID-19 pandemic, we developed several employee initiatives that were implemented at the global, regional and local levels with the objective to support the physical, mental and financial well-being of our employees.

| Sara E. Moss | | | | | | 75 | | | | | | Vice Chairman | | |

*as of August 17, 2022

| Rose Marie Bravo, CBE | | | | | | Retail and Marketing Consultant | | |

*as of August 17, 2022

| | | | For the fiscal year ended June 30, [removed: 2022] [added: 2023] | | |

The aggregate market value of the registrant’s voting common equity held by non-affiliates of the registrant was approximately [removed: $86] [added: $57] billion at December [removed: 31, 2021] [added: 30, 2022] (the last business day of the registrant’s most recently completed second quarter).*

At August [removed: 17, 2022, 231,361,571] [added: 11, 2023, 232,148,786] shares of the registrant’s Class A Common Stock, $.01 par value, and 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: 18, 2022] [added: 17, 2023] | | | | | | Part III | | |

| [Item [removed: 1.](#i2ba0bd92bcb14d27a1d59d9667569d45_13)] [added: 1.](#i3d825451e79040748e484b266d61da3e_13)] | | | [removed: [Business](#i2ba0bd92bcb14d27a1d59d9667569d45_13)] [added: [Business](#i3d825451e79040748e484b266d61da3e_13)] | | | [removed: [2](#i2ba0bd92bcb14d27a1d59d9667569d45_13)] [added: [2](#i3d825451e79040748e484b266d61da3e_13)] | | |

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| [Item [removed: 11.](#i2ba0bd92bcb14d27a1d59d9667569d45_64)] [added: 11.](#i3d825451e79040748e484b266d61da3e_67)] | | | [Executive [removed: Compensation](#i2ba0bd92bcb14d27a1d59d9667569d45_64)] [added: Compensation](#i3d825451e79040748e484b266d61da3e_67)] | | | [removed: [58](#i2ba0bd92bcb14d27a1d59d9667569d45_64)] [added: [59](#i3d825451e79040748e484b266d61da3e_67)] | | |

| [Item [removed: 12.](#i2ba0bd92bcb14d27a1d59d9667569d45_67)] [added: 12.](#i3d825451e79040748e484b266d61da3e_70)] | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i2ba0bd92bcb14d27a1d59d9667569d45_67)] [added: Matters](#i3d825451e79040748e484b266d61da3e_70)] | | | [removed: [58](#i2ba0bd92bcb14d27a1d59d9667569d45_67)] [added: [59](#i3d825451e79040748e484b266d61da3e_70)] | | |

| [Item [removed: 13.](#i2ba0bd92bcb14d27a1d59d9667569d45_70)] [added: 13.](#i3d825451e79040748e484b266d61da3e_73)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i2ba0bd92bcb14d27a1d59d9667569d45_70)] [added: Independence](#i3d825451e79040748e484b266d61da3e_73)] | | | [removed: [58](#i2ba0bd92bcb14d27a1d59d9667569d45_70)] [added: [59](#i3d825451e79040748e484b266d61da3e_73)] | | |

| [Item [removed: 14.](#i2ba0bd92bcb14d27a1d59d9667569d45_73)] [added: 14.](#i3d825451e79040748e484b266d61da3e_76)] | | | [Principal Accounting Fees and [removed: Services](#i2ba0bd92bcb14d27a1d59d9667569d45_73)] [added: Services](#i3d825451e79040748e484b266d61da3e_76)] | | | [removed: [58](#i2ba0bd92bcb14d27a1d59d9667569d45_73)] [added: [59](#i3d825451e79040748e484b266d61da3e_76)] | | |

| [Item [removed: 15.](#i2ba0bd92bcb14d27a1d59d9667569d45_79)] [added: 15.](#i3d825451e79040748e484b266d61da3e_82)] | | | [Exhibits, Financial Statement [removed: Schedules](#i2ba0bd92bcb14d27a1d59d9667569d45_79)] [added: Schedules](#i3d825451e79040748e484b266d61da3e_82)] | | | [removed: [59](#i2ba0bd92bcb14d27a1d59d9667569d45_79)] [added: [60](#i3d825451e79040748e484b266d61da3e_82)] | | |

| [Item [removed: 16.](#i2ba0bd92bcb14d27a1d59d9667569d45_82)] [added: 16.](#i3d825451e79040748e484b266d61da3e_85)] | | | [Form 10-K [removed: Summary](#i2ba0bd92bcb14d27a1d59d9667569d45_82)] [added: Summary](#i3d825451e79040748e484b266d61da3e_85)] | | | [removed: [65](#i2ba0bd92bcb14d27a1d59d9667569d45_82)] [added: [66](#i3d825451e79040748e484b266d61da3e_85)] | | |

Such statements [removed: include] [added: may address] our expectations regarding sales, earnings or other future [removed: operations,] financial performance [removed: or liquidity, our long-term strategy, restructuring] and [removed: similar initiatives,] [added: liquidity, other performance measures,] product introductions, [added: entry into new] geographic [removed: regions or channels,] [added: regions,] information technology initiatives, [removed: social impact and sustainability initiatives, and] new methods of [removed: sale.][added: sale, our long-term strategy, restructuring and other charges and and resulting cost savings, and future operations or operating results.]

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| [Part I:](#i3d825451e79040748e484b266d61da3e_10) | | | | | | | | |

| [Part II:](#i3d825451e79040748e484b266d61da3e_31) | | | | | | | | |

| [Part IV:](#i3d825451e79040748e484b266d61da3e_79) | | | | | | | | |

| [Signatures](#i3d825451e79040748e484b266d61da3e_88) | | | | | | [67](#i3d825451e79040748e484b266d61da3e_88) | | |

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

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

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

| [Signatures](#i2ba0bd92bcb14d27a1d59d9667569d45_85) | | | | | | [66](#i2ba0bd92bcb14d27a1d59d9667569d45_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: 17, 2022.][added: 11, 2023.]

| Distribution | | | — | | | | | | 6 | | | | | | 1 | | | | | | [removed: 9] [added: 7] | | | | | | — | | | | | | [removed: 2] [added: 3] | | |

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

| Total | | | 4 | | | | | | [removed: 14] [added: 15] | | | | | | 5 | | | | | | [removed: 9] [added: 7] | | | | | | — | | | | | | [removed: 3] [added: 4] | | |

In fiscal [removed: 2022,] [added: 2023,] four of our primarily makeup facilities also produced a significant volume of skin care products.

In fiscal 2023, we began limited production in our new owned manufacturing facility near Tokyo as we continued construction.

We expect the remainder of the site to be completed and operational in early fiscal 2024, with production levels scaling over the next few years.

In fiscal 2023, we completed construction of a newly leased site for our new Research and Development facility in China.

In fiscal 2021, we began construction of a new manufacturing facility near Tokyo that we will own.

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 2021, we began construction at a newly leased site that will become our innovation center in Shanghai.

Construction is nearly completed and the facility is now expected to be operational in early fiscal 2023.

On August 17, [removed: 2022,] [added: 2023,] a dividend was declared in the amount of [removed: $.60] [added: $.66] per share on our Class A and Class B Common Stock.

The dividend is payable in cash on September 15, [removed: 2022] [added: 2023] to stockholders of record at the close of business on August 31, [removed: 2022.][added: 2023.]

We expect to continue the payment of cash dividends in the future, but there can be no assurance [added: as to the amounts of any dividends declared or] that the Board of Directors will continue to declare them.

As of August [removed: 17, 2022,] [added: 11, 2023,] there were [removed: 2,201] [added: 2,133] record holders of Class A Common Stock and 13 record holders of Class B Common Stock.

[removed: (1)Includes] [added: (1)Represents] shares that were repurchased by the Company to satisfy tax withholding obligations upon the payout of certain stock-based compensation arrangements.

(2)The Board of Directors has authorized the current repurchase program for up to [removed: 80.0] [added: 256.0] million shares.

The returns are calculated by assuming an investment of $100 in the Class A Common Stock and in each index on June 30, [removed: 2017.][added: 2018.]

[removed: ][added: ]

| April 2023 | | | | | | 882 | | | | | | $ | 254.82 | | | | | — | | | | | | 25,073,242 | | |

| May 2023 | | | | | | 1,089 | | | | | | 195.53 | | | | | | — | | | | | | 25,073,242 | | |

| June 2023 | | | | | | 65,830 | | | | | | 194.76 | | | | | | — | | | | | | 25,073,242 | | |

| | | | | | | 67,801 | | | | | | 195.56 | | | | | | — | | | | | | | | |

Beginning in December 2022, we suspended the repurchase of shares of our Class A Common Stock under our publicly announced program.

We may resume such repurchases in the future.

| 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 | | | | | | | | |

Subsequent to June 30, 2022 and as of August 17, 2022, we purchased approximately 0.2 million additional shares of our Class A Common Stock for $63 million pursuant to our share repurchase program.

The Chief Executive Officer and the Chief Financial Officer, with assistance from other members of management, have evaluated the effectiveness of our disclosure controls and procedures, and, based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of June 30, [removed: 2022.][added: 2023.]

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: 2022] [added: 2023] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

*Trading Arrangements*

During the fiscal 2023 fourth quarter, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408(a) of Regulation S-K under the Exchange Act.

*Compensatory Arrangements of Certain Officers*

We are reporting the following information regarding our Executive Annual Incentive Plan in this Item 9B in lieu of filing such information on a Current Report on Form 8-K under Item 5.02(e) “Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain Officers.”

On August 14, 2023, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of the Company adopted a new executive annual incentive plan, The Estée Lauder Companies Inc. Executive Annual Incentive Plan (the “Plan”).

Commencing for the Company’s fiscal year beginning July 1, 2023, the Plan replaces the executive annual incentive plan adopted by the Compensation Committee on August 21, 2013 (the “2013 Plan”), which the Company will cease using.

The principal purposes of the Plan are to provide incentives and rewards to the “executive officers” of the Company and to assist the Company in motivating them to achieve the Company’s annual performance goals.

The Plan is administered by the Compensation Committee or such other committee as may be appointed by the Board (the “Committee”).

The Committee, in its discretion, may grant opportunities to executive officers for each fiscal year of the Company as it shall determine.

For purposes of the Plan, “executive officers” means those persons who are denoted as such from time to time by the Company in the Company’s filings with the Securities and Exchange Commission, or those persons as determined by the Board from time to time.

Under the Plan, each participant is granted an annual opportunity for a payment if performance targets are achieved.

Performance targets are based on the nature of the participant’s role and amount of time in that role, achievement of hurdle rates, and targets and/or growth in one or more business criteria that apply to the individual participant, one or more business units or the Company as a whole.

The business criteria may include, individually or in combination: (i) net earnings; (ii) earnings per share; (iii) net sales; (iv) market share; (v) net operating profit; (vi) expense control; (vii) return on invested capital; (viii) operating margin; (ix) return on equity; (x) return on assets; (xi) planning accuracy (as measured by comparing planned results to actual results); (xii) gross margin; (xiii) market price per share; (xiv) total return to stockholders; (xv) ESG measures; and (xvi) any other measure determined by the Committee.

In addition, the annual performance targets may include comparisons to performance at other companies, such performance to be measured by one or more of the foregoing business criteria.

Furthermore, the measurement of performance against targets may exclude or adjust for the impact of certain events or occurrences as set forth in the Plan.

In no event may a participant receive more than $10 million under the Plan on account of any fiscal year.

Payouts pursuant to opportunities granted under the Plan occur following approval by the Committee of achievement.

Payouts are in cash (unless otherwise determined by the Committee) as soon as practicable following approval by the Committee, but not later than December 31 of the calendar year in which the applicable fiscal year ends.

The Committee may determine that the payout of an opportunity or a portion of an opportunity shall be deferred and may also allow voluntary deferrals in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “IRC”).

In the event a participant’s employment is terminated prior to the payout of an opportunity previously granted, the Plan provides for payment under certain circumstances as specified in the Plan.

Payouts are subject to repayment by a participant to the Company in accordance with the Company’s recoupment, recovery or clawback policy or policies in effect from time to time.

The Plan is subject to amendment or termination at any time by the Committee but no such action may adversely affect any rights or obligations with respect to any opportunities previously granted under the Plan.

The foregoing brief description of the terms and conditions of the Plan is qualified in its entirety by reference to the full text of the Plan, a copy of which is attached as [Exhibit 10.5a](https://www.sec.gov/Archives/edgar/data/1001250/000100125023000112/a105a_telci-executiveannua.htm) hereto, and is incorporated into this Item by reference.

None.

Business – Information about our Executive Officers,* will be included in our Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders (the [removed: “2022] [added: “2023] Proxy Statement”).

The [removed: 2022] [added: 2023] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2022] [added: 2023] and such information is incorporated herein by reference.

The information required by this Item will be included in the [removed: 2022] [added: 2023] Proxy Statement.

The [removed: 2022] [added: 2023] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2022] [added: 2023] 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: 2022] [added: 2023] Proxy Statement.

The [removed: 2022] [added: 2023] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2022] [added: 2023] 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: 2022] [added: 2023] and does not include grants made or cancelled and options exercised after such date.

Equity Compensation Plan Information as of June 30, [removed: 2022][added: 2023]

(2)Consists of [removed: 7,171,826] [added: 7,497,084] shares issuable upon exercise of outstanding options, [removed: 1,517,875] [added: 1,789,851] shares issuable upon conversion of outstanding Restricted Stock Units, [removed: 1,429,718] [added: 601,845] shares issuable upon conversion of outstanding Performance Share Units (“PSUs”) (assuming maximum payout for unvested PSUs and PSUs vested as of June 30, [removed: 2022] [added: 2023] pending approval by the Stock Plan Subcommittee of our Board of Directors), [removed: 121,940] [added: 112,680] shares issuable upon conversion of Share Units and [removed: 479,728] [added: 350,445] shares issuable upon conversion of Long-term PSUs, including Price-vested units (“PVUs”).

(3)Calculated based upon outstanding options in respect of [removed: 7,171,826] [added: 7,497,084] shares of our Class A Common Stock.

As of June 30, [removed: 2022,] [added: 2023,] there were [removed: 11,080,027] [added: 9,684,436] 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: 2022).][added: 2023).]

As of June 30, [removed: 2022,] [added: 2023,] there were [removed: 450,212] [added: 429,888] 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: 2022,] [added: 2023,] the total shares of Common Stock outstanding (i.e. Class A plus Class B) would increase 6% to [removed: 379,306,876.][added: 378,086,144.]

[removed: All] [added: Of the] outstanding options to purchase [added: 7,497,084] shares of Class A Common Stock, [added: options to purchase 3,354,289 shares] have an exercise price less than [removed: $254.67,] [added: $196.38,] the closing price on June 30, [removed: 2022.][added: 2023.]

Assuming the exercise of only in-the-money options, the total shares outstanding would increase by [removed: 2%] [added: 1%] to [removed: 363,206,293.][added: 360,974,204.]

| Equity compensation plans approved by security holders(1) | | | | | | 10,351,905 | | | | | | $184.41 | | | | | | 10,114,324 | | |

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

The information required by this Item will be included in the [removed: 2022] [added: 2023] Proxy Statement.

The [removed: 2022] [added: 2023] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2022] [added: 2023] and such information is incorporated herein by reference.

The information required by this Item will be included in the [removed: 2022] [added: 2023] Proxy Statement.

The [removed: 2022] [added: 2023] Proxy Statement will be filed within 120 days after the close of the fiscal year ended June 30, [removed: 2022] [added: 2023] and such information is incorporated herein by reference.

| [removed: 10.10] [added: 10.11] | | | | | | Employment Agreement with [removed: John Demsey] [added: Jane Lauder] (filed as Exhibit 10.1 to our [removed: Current] [added: Quarterly] Report on Form [removed: 8-K] [added: 10-Q] filed on [removed: September 24, 2010)] [added: May 3, 2023)] (SEC File No. 1-14064).*† | | |

| [removed: 10.10a] [added: 10.10] | | | | | | [removed: Amendment to] Employment Agreement with [removed: John Demsey] [added: Jane Hertzmark Hudis] (filed as Exhibit [removed: 10.3] [added: 10.13] to our [removed: Current] [added: Annual] Report on Form [removed: 8-K] [added: 10-K] filed on [removed: February 27, 2013)] [added: August 24, 2022)] (SEC File No. 1-14064).*† | | |

| [removed: 10.11] [added: 10.24] | | | | | | [removed: Employment Agreement with Cedric Prouvé] [added: Creative Consultant Agreement, dated April 6, 2011, between Estee Lauder Inc. and Aerin Lauder Zinterhofer] (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on [removed: September 20,] [added: April 8,] 2011) (SEC File No. 1-14064).*† | | |

| [removed: 10.12] [added: 10.13a] | | | | | | [removed: Employment] [added: Form of Deferred Compensation] Agreement [added: (interest-based)] with [removed: Deirdre Stanley filed] [added: Outside Directors (including Election Form) (filed] as Exhibit [removed: 10.12] [added: 10.12a] to our Annual Report on Form 10-K filed on August [removed: 28, 2020)] [added: 24, 2018)] (SEC File No. 1-14064).*† | | |

| [removed: 10.12a] [added: 10.14a] | | | | | | [removed: Amendment to Employment] [added: Form of Deferred Compensation] Agreement [added: (stock-based)] with [removed: Deirdre Stanley filed] [added: Outside Directors (including Election Form) (filed] as Exhibit [removed: 10.12a] [added: 10.13a] to our Annual Report on Form 10-K filed on August [removed: 28, 2020)] [added: 24, 2018)] (SEC File No. 1-14064).*† | | |

| [removed: 10.13] [added: 10.12] | | | | | | Employment Agreement with [removed: Jane Hertzmark Hudis] [added: Peter Jueptner] (SEC File No. 1-14064).† | | |

| [removed: 10.14] [added: 10.13] | | | | | | 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: 10.14a] [added: 10.14] | | | | | | Form of Deferred Compensation Agreement [removed: (interest-based)] [added: (stock-based)] with Outside Directors [removed: (including Election Form)] (filed as Exhibit [removed: 10.12a] [added: 10.15] to our Annual Report on Form 10-K filed on [removed: August 24, 2018)] [added: September 17, 2001)] (SEC File No. 1-14064).*† | | |

| [removed: 10.15] [added: 10.16b] | | | | | | [removed: Form] [added: Summary] of [removed: Deferred] Compensation [removed: Agreement (stock-based) with Outside] [added: For Non-Employee] Directors [added: of the Company] (filed as Exhibit [removed: 10.15] [added: 10.16b] to our Annual Report on Form 10-K filed on [removed: September 17, 2001)] [added: August 27, 2021)] (SEC File No. 1-14064).*† | | |

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

| [removed: 10.17] [added: 10.16] | | | | | | 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: 10.17a] [added: 10.16a] | | | | | | 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: 10.18] [added: 10.17] | | | | | | 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: 10.18a] [added: 10.17a] | | | | | | 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: 10.19] [added: 10.18] | | | | | | 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: 10.19a] [added: 10.18a] | | | | | | 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: 10.19b] [added: 10.18b] | | | | | | 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: 10.19c] [added: 10.18c] | | | | | | 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: 10.19d] [added: 10.18d] | | | | | | 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: 10.19e] [added: 10.18e] | | | | | | 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: 10.19f] [added: 10.18g] | | | | | | 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: 10.16y] [added: 10.16m] to our Annual Report on Form 10-K filed on August [removed: 20, 2014)] [added: 25, 2017)] (SEC File No. 1-14064).*† | | |

| [removed: 10.19g] [added: 10.18f] | | | | | | 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 10.16z to our Annual Report on Form 10-K filed on August 20, 2014) (SEC File No. 1-14064).*† | | |

| [removed: 10.19h] [added: 10.18h] | | | | | | 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: 10.16m] [added: 10.17l] to our Annual Report on Form 10-K filed on August [removed: 25, 2017)] [added: 23, 2019)] (SEC File No. 1-14064).*† | | |

| [removed: 10.19i] [added: 10.18p] | | | | | | Form of [added: Restricted] Stock [removed: Option] [added: Unit Award] Agreement [added: 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 [removed: 10.17l] [added: 10.18bb] to our Annual Report on Form 10-K filed on August [removed: 23, 2019)] [added: 28, 2020)] (SEC File No. 1-14064).*† | | |

| [removed: 10.19j] [added: 10.18i] | | | | | | Performance Share Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Notice of Grant) (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on September 11, 2015) (SEC File No. 1-14064).*† | | |

| [removed: 10.19k] [added: 10.18j] | | | | | | Performance Share Unit Award Agreement with Fabrizio Freda (2018) under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Notice of Grant) (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on February 15, 2018) (SEC File No. 1-14064).*† | | |

| [removed: 10.19l] [added: 10.18o] | | | | | | Form of Performance Share Unit Award Agreement for Employees including 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 [removed: 10.17u] [added: 10.18t] to our Annual Report on Form 10-K filed on August [removed: 24, 2018)] [added: 27, 2021)] (SEC File No. 1-14064).*† | | |

| [removed: 10.19m] [added: 10.18n] | | | | | | Form of [added: Non-annual] Performance Share Unit Award Agreement for [removed: Employees including] 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 [removed: 10.17t] [added: 10.18s] to our Annual Report on Form 10-K filed on August [removed: 23, 2019)] [added: 27, 2021)] (SEC File No. 1-14064).*† | | |

| [removed: 10.19n] [added: 10.18k] | | | | | | Form of Performance Share Unit Award Agreement for Employees including 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 10.1 to our Quarterly Report on Form 10-Q filed on November 2, 2020) (SEC File No. 1-14064).*† | | |

| [removed: 10.19o] [added: 10.18l] | | | | | | Price-Vested Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Notice of Grant) (filed as Exhibit 10.1 to our current Report on Form 8-K filed on March 16, 2021) (SEC File No. 1-14064).*† | | |

| [removed: 10.19p] [added: 10.18m] | | | | | | Performance Share Unit Award Agreement with Fabrizio Freda under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Notice of Grant) (filed as Exhibit 10.2 to our Current Report on Form 8-K filed on March 16, 2021) (SEC File No. 1-14064).*† | | |

| [removed: 10.19q] [added: 10.18r] | | | | | | Form of Non-annual [removed: Performance Share] [added: 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 [removed: 10.18s] [added: 10.18dd] to our Annual Report on Form 10-K filed on August [removed: 27, 2021)] [added: 28, 2020)] (SEC File No. 1-14064).*† | | |

| [removed: 10.19r] [added: 10.18q] | | | | | | Form of [removed: Performance Share] [added: Restricted Stock] Unit Award Agreement for Employees [removed: including] [added: 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 [removed: 10.18t] [added: 10.18cc] to our Annual Report on Form 10-K filed on August [removed: 27, 2021)] [added: 28, 2020)] (SEC File No. 1-14064).*† | | |

| [removed: 10.20] [added: 10.19] | | | | | | $2.5 Billion Credit Facility, dated as of October 22, 2021, among The Estée Lauder Companies Inc., the Eligible Subsidiaries of the Company, as defined therein, the lenders listed therein, and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on October 22, 2021) (SEC File No. 1-14064).* | | |

| [removed: 10.21] [added: 10.20] | | | | | | Services Agreement, dated January 1, 2003, among Estee Lauder Inc., Melville Management Corp., Leonard A. Lauder, and William P. Lauder (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on January 28, 2010) (SEC File No. 1-14064).* | | |

| 4.29 | | | | | | Officers’ Certificate, dated May 12, 2023, defining certain terms of the 4.375% Senior Notes due 2028 (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No. 1-14064).* | | |

| 4.30 | | | | | | Form of Global Note for the 4.375% Senior Notes due 2028 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No. 1-14064).* | | |

| 4.31 | | | | | | Officers’ Certificate, dated May 12, 2023, defining certain terms of the 4.650% Senior Notes due 2033 (filed as Exhibit 4.3 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No. 1-14064).* | | |

| 4.32 | | | | | | Form of Global Note for the 4.650% Senior Notes due 2033 (included as Exhibit A in Exhibit 4.3 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No. 1-14064).* | | |

| 4.33 | | | | | | Officers’ Certificate, dated May 12, 2023, defining certain terms of the 5.150% Senior Notes due 2053 (filed as Exhibit 4.5 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No. 1-14064).* | | |

| 4.34 | | | | | | Form of Global Note for the 5.150% Senior Notes due 2053 (included as Exhibit A in Exhibit 4.5 to our Current Report on Form 8-K filed on May 12, 2023) (SEC File No. 1-14064).* | | |

| 10.3b | | | | | | The Estee Lauder Companies Retirement Growth Account Plan, as amended and restated, effective as of January 1, 2023 (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on February 2, 2023) (SEC File No. 1-14064).*† | | |

| 10.5a | | | | | | Executive Annual Incentive Plan (SEC File No. 1-14064).† | | |

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| 10.11a | | | | | | Amendment to Employment Agreement with Cedric Prouvé (filed as Exhibit 10.4 to our Current Report on Form 8-K filed on February 27, 2013) (SEC File No. 1-14064).*† | | |

| 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).*† | | |

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

| 10.19s | | | | | | Form of Restricted Stock Unit Award Agreement under The Estée Lauder Companies Inc. Amended and Restated Fiscal 2002 Share Incentive Plan (including Form of Notice of Grant) (filed as Exhibit 10.17y to our Annual Report on Form 10-K filed on August 23, 2019) (SEC File No. 1-14064).*† | | |

| 10.19t | | | | | | 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).*† | | |

| 10.19u | | | | | | 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).*† | | |

| 10.19v | | | | | | 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).*† | | |

| 10.19w | | | | | | 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).*† | | |

| 10.19x | | | | | | 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).*† | | |

| 10.26b | | | | | | Second Amendment to the April 6, 2011 License Agreement, dated February 22, 2019, by and among Aerin LLC, Aerin Lauder Zinterhofer and Estee Lauder Inc. (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on May 1, 2019) (SEC File No. 1-14064).* | | |

| 23.2 | | | | | | Consent of KPMG LLP. | | |

| Date: August [removed: 24, 2022] [added: 18, 2023] | | | | | | | | |

| FABRIZIO FREDA* | | | | | | President, Chief Executive Officer and a Director (Principal Executive Officer) | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| WILLIAM P. LAUDER* | | | | | | Executive Chairman and a Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| LEONARD A. LAUDER* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| CHARLENE BARSHEFSKY* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| WEI SUN CHRISTIANSON* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| ANGELA WEI DONG* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| PAUL J. FRIBOURG* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| JENNIFER HYMAN* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| JANE LAUDER* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| RONALD S. LAUDER* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| ARTURO NUÑEZ* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| RICHARD D. PARSONS* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| LYNN FORESTER DE ROTHSCHILD* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| BARRY S. STERNLICHT* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| JENNIFER TEJADA* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| RICHARD F. ZANNINO* | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| /s/ TRACEY T. TRAVIS | | | | | | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | | | | | | August [removed: 24, 2022] [added: 18, 2023] | | |

| [Management’s Report on Internal Control Over Financial [removed: Reporting](#i2ba0bd92bcb14d27a1d59d9667569d45_91)] [added: Reporting](#i3d825451e79040748e484b266d61da3e_94)] | | | [removed: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_91)] [added: [F-](#i3d825451e79040748e484b266d61da3e_94)] | | | [removed: [2](#i2ba0bd92bcb14d27a1d59d9667569d45_91)] [added: [2](#i3d825451e79040748e484b266d61da3e_94)] | | |

| [Report of Independent Registered Public Accounting Firm [removed: (](#i2ba0bd92bcb14d27a1d59d9667569d45_94)PricewaterhouseCoopers LLP[,](#i2ba0bd92bcb14d27a1d59d9667569d45_94)] [added: (](#i3d825451e79040748e484b266d61da3e_97)PricewaterhouseCoopers LLP[,](#i3d825451e79040748e484b266d61da3e_97)] New York, New York[, Auditor Firm [removed: ID:](#i2ba0bd92bcb14d27a1d59d9667569d45_94) 238[)](#i2ba0bd92bcb14d27a1d59d9667569d45_94)] [added: ID:](#i3d825451e79040748e484b266d61da3e_97) 238[)](#i3d825451e79040748e484b266d61da3e_97)] | | | [removed: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_94)] [added: [F-](#i3d825451e79040748e484b266d61da3e_97)] | | | [removed: [3](#i2ba0bd92bcb14d27a1d59d9667569d45_94)] [added: [3](#i3d825451e79040748e484b266d61da3e_97)] | | |

| [Consolidated Statements of [removed: Earnings](#i2ba0bd92bcb14d27a1d59d9667569d45_100)] [added: Earnings](#i3d825451e79040748e484b266d61da3e_103)] | | | [removed: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_100)] [added: [F-](#i3d825451e79040748e484b266d61da3e_103)] | | | [removed: [6](#i2ba0bd92bcb14d27a1d59d9667569d45_100)] [added: [6](#i3d825451e79040748e484b266d61da3e_103)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i2ba0bd92bcb14d27a1d59d9667569d45_103)] [added: Income](#i3d825451e79040748e484b266d61da3e_106)] | | | [removed: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_103)] [added: [F-](#i3d825451e79040748e484b266d61da3e_106)] | | | [removed: [7](#i2ba0bd92bcb14d27a1d59d9667569d45_103)] [added: [7](#i3d825451e79040748e484b266d61da3e_106)] | | |

| [Consolidated Balance [removed: Sheets](#i2ba0bd92bcb14d27a1d59d9667569d45_106)] [added: Sheets](#i3d825451e79040748e484b266d61da3e_109)] | | | [removed: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_106)] [added: [F-](#i3d825451e79040748e484b266d61da3e_109)] | | | [removed: [8](#i2ba0bd92bcb14d27a1d59d9667569d45_106)] [added: [8](#i3d825451e79040748e484b266d61da3e_109)] | | |

| [Consolidated Statements of Equity and Redeemable Noncontrolling [removed: Interest](#i2ba0bd92bcb14d27a1d59d9667569d45_109)] [added: Interest](#i3d825451e79040748e484b266d61da3e_112)] | | | [removed: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_109)] [added: [F-](#i3d825451e79040748e484b266d61da3e_112)] | | | [removed: [9](#i2ba0bd92bcb14d27a1d59d9667569d45_109)] [added: [9](#i3d825451e79040748e484b266d61da3e_112)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i2ba0bd92bcb14d27a1d59d9667569d45_112)] [added: Flows](#i3d825451e79040748e484b266d61da3e_115)] | | | [removed: [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_112)] [added: [F-](#i3d825451e79040748e484b266d61da3e_115)] | | | [removed: [10](#i2ba0bd92bcb14d27a1d59d9667569d45_112)] [added: [10](#i3d825451e79040748e484b266d61da3e_115)] | | |

[removed: | [Notes to Consolidated Financial Statements](#i2ba0bd92bcb14d27a1d59d9667569d45_115) | | | [F-](#i2ba0bd92bcb14d27a1d59d9667569d45_115) | | | [11](#i2ba0bd92bcb14d27a1d59d9667569d45_115) | | |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS]

| [Schedule II - Valuation and Qualifying [removed: Accounts](#i2ba0bd92bcb14d27a1d59d9667569d45_202)] [added: Accounts](#i3d825451e79040748e484b266d61da3e_205)] | | | [removed: [S-](#i2ba0bd92bcb14d27a1d59d9667569d45_202)] [added: [S-](#i3d825451e79040748e484b266d61da3e_205)] | | | [removed: [1](#i2ba0bd92bcb14d27a1d59d9667569d45_202)] [added: [1](#i3d825451e79040748e484b266d61da3e_205)] | | |

Based on this assessment, the Company’s management has concluded that, as of June 30, [removed: 2022,] [added: 2023,] 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: 2022] [added: 2023] 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: 24,] [added: 17,] 2022 [added: | | | | | | August 31, 2022 | | | | | | September 15, 2022 | | | | | | $ | .60 | |]

We have audited the accompanying consolidated balance sheets of The Estée Lauder Companies Inc. and its subsidiaries (the “Company”) as of June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the related consolidated statements of earnings, of comprehensive income, of equity and redeemable noncontrolling interest and of cash flows for each of the [removed: two] [added: three] years in the period ended June 30, [removed: 2022,] [added: 2023,] including the related notes and schedule of valuation and qualifying accounts for each of the [removed: two] [added: three] years in the period ended June 30, [removed: 2022] [added: 2023] 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: 2022,] [added: 2023,] 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, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the [removed: two] [added: three] years in the period ended June 30, [removed: 2022] [added: 2023] 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: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that (i) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

As described in Notes 2 and 6 to the consolidated financial statements, the Company’s consolidated balance of goodwill [removed: and indefinite-lived intangible assets] was [removed: $2,521] [added: $2,486] million [removed: and $1,992 million, respectively,] as of June 30, [removed: 2022,] [added: 2023,] of which [removed: a significant portion] [added: $304 million] relates to the [removed: DECIEM] [added: Dr.Jart+] reporting [removed: unit and indefinite-lived trademarks.][added: unit.]

Management assesses goodwill [removed: and other indefinite-lived intangible assets] at least annually for impairment as of the beginning of the fiscal fourth quarter or more frequently if certain events or circumstances exist.

[removed: Management] [added: The Company] concluded that the changes in circumstances in the reporting [removed: units] [added: units, along with increases in the weighted average cost of capital,] triggered the need for interim impairment reviews of [removed: the Company’s] [added: their] trademarks and goodwill.

[removed: To determine the estimated] [added: The] fair value of the reporting [removed: units, management uses] [added: unit was based upon] an equal weighting of the income and market [removed: approach.][added: approaches.]

| [Notes to Consolidated Financial Statements](#i3d825451e79040748e484b266d61da3e_118) | | | [F-](#i3d825451e79040748e484b266d61da3e_118) | | | [11](#i3d825451e79040748e484b266d61da3e_118) | | |

*Interim Goodwill Impairment Assessment - Dr.Jart+ Reporting Unit*

Management completed an interim quantitative impairment test for goodwill as of November 30, 2022.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income approach and (ii) the reasonableness of the weighted average cost of capital significant assumption.

*Acquisition of 001 Del LLC - Valuation of TOM FORD Trademark Intangible Asset*

As described in Notes 2, 5, and 6 to the consolidated financial statements, on April 28, 2023, the Company acquired 100% of the equity interests in 001 Del LLC, the sole owner of the TOM FORD brand and its related intellectual property.

The acquisition has been accounted for as an asset acquisition as the fair value of the gross assets acquired is concentrated in the value of the TOM FORD trademark intangible asset.

The Company recognizes assets acquired in an asset acquisition based on the cost to the Company on a relative fair value basis.

The total cost of the asset acquisition of $2,578 million was allocated to the TOM FORD trademark intangible asset.

The principal considerations for our determination that performing procedures relating to the valuation of the TOM FORD trademark intangible asset from the acquisition of 001 Del LLC is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the trademark intangible asset acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to terminal value, beauty royalty savings, and weighted average cost of capital; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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

These procedures included testing the effectiveness of controls relating to the acquisition, including controls over the valuation of the trademark intangible asset.

These procedures also included, among others, (i) reading the purchase agreement; (ii) testing management’s process for developing the fair value estimate; (iii) evaluating the appropriateness of the relief-from-royalty method; (iv) testing the completeness and accuracy of the underlying data used in the method; and (v) evaluating the reasonableness of the significant assumptions used by management related to terminal value, beauty royalty savings, and weighted average cost of capital.

Evaluating management’s assumptions related to terminal value and beauty royalty savings involved evaluating whether the assumptions were reasonable considering (i) the current and past performance of the brand; (ii) the consistency with external market data and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

| August 18, 2023 | | | | | |

| Cross-currency swap contract loss | | | | | | (20) | | | | | | — | | | | | | — | | |

| (In millions, except share data) | | | 2023 | | | | | | 2022 | | |

| | | | 19,216 | | | | | | 18,952 | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

| Purchases of other intangible assets | | | | | | (2,286) | | | | | | — | | | | | | — | | |

The Company also uses cross-currency swap contracts to hedge the impact of foreign currency changes on certain intercompany foreign currency denominated debt.

The Company evaluates whether a transaction meets the definition of a business.

The Company first applies a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

If the screen test is met, the transaction is accounted for as an asset acquisition.

If the screen test is not met, the Company further considers whether the set of assets or acquired entities have at a minimum, inputs and processes that have the ability to create outputs in the form of revenue.

If the assets or acquired entities meet this criteria, the transaction is accounted for as a business combination.

The Company recognizes assets acquired in an asset acquisition based on the cost to the Company on a relative fair value basis, which includes transaction costs in addition to consideration transferred and liabilities assumed or issued as part of the transaction.

Neither goodwill nor bargain purchase gains are recognized in an asset acquisition; any excess of consideration transferred over the fair value of the net assets acquired, or the opposite, is allocated to qualifying assets based on their relative fair values.

As a result of the acquisition of the TOM FORD brand, the Company entered into license arrangements with the Marcolin Group (“Marcolin”) and Ermenegildo Zegna N.V. (“Zegna”).

As part of these arrangements, the Company licensed the TOM FORD trademark for eyewear (“Eyewear”) to Marcolin and for fashionwear (“Fashion”) to Zegna.

Licensing the TOM FORD trademark to customers represents a new revenue-generating activity in the ordinary course of business for the Company.

The Company’s performance obligation is to license the TOM FORD trademark to Marcolin and to Zegna, which grants them the right to access the symbolic intellectual property.

The licensing arrangements stipulate that licensees must pay a sales-based royalty, with a guaranteed minimum, to the Company.

The Company satisfies its performance obligation over the license period, as the Company fulfills its promise to grant the licensees rights to use and benefit from the intellectual property as well as maintain the intellectual property.

As such, revenue for both the Marcolin and Zegna arrangements is recognized over time.

Royalty payments are collected on a quarterly basis.

The Company expects the guaranteed minimum royalty amounts to be exceeded and, as a result, sales-based royalties will be recognized in the period in which the sales occur.

The upfront payment received from Marcolin is recognized on a straight-line basis over the estimated economic life of the license.

See *Note 5 – Business and Asset Acquisitions* and *Note 14 - Revenue Recognition* for further information regarding the acquisition of the TOM FORD brand.

| ROSE MARIE BRAVO* | | | | | | Director | | | | | | August 24, 2022 | | |

| Rose Marie Bravo | | | | | | | | | | | | | | |

| | | | | | |

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

| [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) | | |

Report of Independent Registered Public Accounting Firm

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

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

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

| | | | | | |

| New York, New York | | | | | |

| August 24, 2022 | | | | | |

To the Stockholders and Board of Directors

*Opinion on the Consolidated Financial Statements*

We have audited the accompanying consolidated statement of earnings, comprehensive income, equity, and cash flow for the year ended June 30, 2020, and the related notes and financial statement schedule (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2020, and the results of its operations and its cash flows for the year ended June 30, 2020, in conformity with U.S. generally accepted accounting principles.

*Basis for Opinion*

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits 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 audit 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.

We believe that our audits provide a reasonable basis for our opinion.

| | | | | | |

| /s/ KPMG LLP | | | | | |

| We served as the Company’s auditor from 2002 to 2020. | | | | | |

| August 28, 2020 | | | | | |

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

| | | | | | | | | | | | | | | | | | |

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

| | | | | | | | | | | | | | | | | | |

| Total stockholders’ equity – The Estée Lauder Companies Inc. | | | 5,590 | | | | | | 6,057 | | | | | | 3,935 | | |

As a result of the adoption of ASC 326, the Company recorded a cumulative adjustment of approximately $3 million, net of tax, as a reduction to its fiscal 2021 opening balance of retained earnings relating to its trade receivables.

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 the reporting units, the Company used an equal weighting of the income and market approaches.

Under the income approach, the Company determined fair value using a discounted cash flow method, projecting future cash flows of each reporting unit, as well as a terminal value, and discounting such cash flows at a rate of return that reflected the relative risk of the cash flows.

Under the market approach, the Company utilized market multiples from publicly traded companies with similar operating and investment characteristics as the reporting unit.