Risk Factors Dashboard
Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.
View risk factors by ticker
Search filings by term
Risk Factors - EL
-New additions in green
-Changes in blue
-Hover to see similar sentence in last filing
Item 1A. Risk Factors.”
Unless the context requires otherwise, references to “we,” “us,” “our” and the “Company” refer to The Estée Lauder Companies Inc. and its subsidiaries.
PART I
Item 1. Business.
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 products. We are a steward of over 20 luxury and prestige brands globally. Since the initial launch of the Estée Lauder brand in the United States, we have significantly expanded our consumer reach to approximately 150 countries and territories. We operate as a wholesaler, with our products sold in brick-and-mortar locations and on various e-commerce platforms, including those operated by department stores, duty-free retailers, specialty-multi retailers, online pure players, upscale perfumeries and pharmacies, and top-tier salons and spas. Additionally, we operate a direct-to-consumer business across freestanding stores, our brands' websites and third-party online platforms.
In February 2025, we embarked on “Beauty Reimagined,” a strategic vision which focuses on accelerating best-in-class consumer coverage, creating transformative innovation, boosting consumer-facing investments, fueling sustainable growth through bold efficiencies and reimagining the way we work.
As part of reimagining the way we work, we created our "One ELC" operating model, a scalable, integrated system designed to operate faster, execute with greater discipline, and drive growth. One ELC is built on three elements: One Team, One Culture, and One Operating Ecosystem. One Team is the simplification of the organization with fewer layers and silos, clearer ownership and faster decision making. One Culture is the reinforcement of how teams work every day, grounded in accountability, bold, entrepreneurial thinking, and agility. One Operating Ecosystem is the combination of shared platforms, data and strategic partners to enable consistent, scalable and effective execution across brands, regions and functions.
We have been controlled by the Lauder family since the founding of our Company. Members of the Lauder family, some of whom are directors, executive officers and/or employees, beneficially own, directly or indirectly, as of August 12, 2026, shares of our Company's Class A Common Stock and Class B Common Stock having approximately 82% of the outstanding voting power of the Common Stock.
2
Products
Skin Care - Our broad range of skin care products address various skin care needs. These products include moisturizers, serums, cleansers, toners, eye care, body care, exfoliators, acne and oil correctors, facial masks and sun care products.
Makeup - We offer an extensive array of makeup products across shades and colors. Our full array of makeup products includes foundations, powders, concealers and setting sprays, lipsticks, lip liners and lip glosses, and mascaras, eyeshadows and eyeliners. We also sell related items such as compacts, brushes and other makeup tools.
Fragrance - We offer a variety of fragrance products. The fragrances are sold in various forms, including parfum, eau de parfum, eau de toilette, eau de cologne, and body spray, as well as lotions, creams, powders, candles and soaps that are based on a particular fragrance.
Hair Care - Our hair care products include shampoos, conditioners, styling products, treatment, finishing sprays and hair color products.
Other - The other category includes royalty revenue from our licensing of the TOM FORD trademark to third parties as well as sales from ancillary products and services that do not fit within the definitions of skin care, makeup, fragrance, and hair care.
3
Our Brands
Given the personal nature of our products and the wide array of consumer preferences and tastes, as well as competition for the attention of consumers, our strategy has been to market and promote our products through distinctive brands seeking to address broad preferences and tastes. Each brand has a single global image that is promoted with consistent logos, packaging and advertising designed to enhance its image and differentiate it from other brands in the market. Beauty brands are differentiated by numerous factors, including quality, performance, a particular lifestyle, where they are distributed (e.g., prestige or mass) and price point. Below is a chart showing brands we sell and how we view them based on lifestyle and price point:
4
5
6
7
Our “Luxury Brands” are prestige brands sold at luxury price points and include La Mer, Jo Malone London, TOM FORD, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle, KILIAN PARIS and Balmain Beauty. This luxury portfolio also includes Estée Lauder's Re-Nutriv product franchise. Our “Large Brands”, defined as brands that have net sales of $1,000 million or more, are Estée Lauder, La Mer, M·A·C, Clinique, Jo Malone London and TOM FORD. Our “Scaling Brands”, defined as brands with net sales of $400 million or more, but less than $1,000 million, are The Ordinary, Le Labo, Bobbi Brown Cosmetics and Aveda. Our “Developing Brands”, defined as brands with net sales of less than $400 million, are Too Faced, KILIAN PARIS, Dr.Jart+, Origins, Bumble and bumble, Editions de Parfums Frédéric Malle, Smashbox, Darphin Paris, Lab Series, Balmain Beauty, Aramis, AERIN Beauty, NIOD, Avestan, Loopha and GLAMGLOW.Jart+, Origins, KILIAN PARIS, Bumble and bumble, Editions de Parfums Frédéric Malle, Smashbox, Darphin Paris, Lab Series, AERIN Beauty, NIOD, Aramis, BALMAIN Beauty and GLAMGLOW.
From time to time, we also make minority investments in companies, mainly in the beauty industry, including through our New Incubation Ventures, the strategic early-stage investment and incubation arm of our Company. For some of our historical minority investments, we have acquired the remaining interests (e.g., Have & Be Co. Ltd. (i.e. Dr.Jart+) and DECIEM). We have several minority investments as of June 30, 2026, including a company based in India that manufactures, markets and sells Ayurvedic skin care and other products under the Forest Essentials brand name, primarily in India, for which we have signed an agreement, subject to regulatory approvals, to acquire the remaining interest, as well as an investment in a luxury skin care brand, with proprietary formulas designed to support skin repair and resilience at the cellular level.
Social Impact and Sustainability
We continue to integrate social impact and sustainability into our strategy and business operations. Our social impact and sustainability initiatives help drive innovation, growth and operational efficiency across the business and within our brand portfolio, including through ingredient and packaging innovation and efforts to reduce cost and waste. Our social impact and sustainability initiatives help drive innovation, growth and efficiency across the business and within our brand portfolio. Our initiatives also aim to enhance employee engagement and strengthen consumer trust and loyalty.
Our areas of focus include green chemistry and ingredient transparency; packaging; climate and energy; responsible sourcing; employee engagement, health and safety; philanthropic partnerships supporting women and girls; and social impact investments. We have established goals or commitments within these focus areas. We have set goals or made commitments within these focus areas. For example, our climate and energy goals are intended to advance efficiency and conservation across our facilities, internal supply chain and broader value chain. For example, our goals related to climate and energy support efficiency and conservation within our facilities, internal supply chain and value chain.
The Nominating and ESG Committee of our Board of Directors has oversight responsibility for our Company’s social impact and sustainability activities and practices, including citizenship and sustainability matters. Our social impact and sustainability efforts are led by our Chief Sustainability Officer and Chief Value Chain Officer, under the oversight of our President and Chief Executive Officer. Other members of senior management, together with employees across the organization, help to drive our strategic initiatives concerning social impact and sustainability. Other members of senior management, along with employees across the organization, help to drive our strategic initiatives concerning social impact and sustainability.
Additional information related to our social impact and sustainability matters can be found at www.elcompanies.com.
Distribution
We operate as a wholesaler, with our products sold in brick-and-mortar locations and on various e-commerce platforms, including those operated by department stores, duty-free retailers, specialty-multi retailers, online pure players, upscale perfumeries and pharmacies, and top-tier salons and spas. Additionally, we operate a direct-to-consumer business across freestanding stores, our brands' websites and third-party online platforms. Our general practice is to accept returns of our products from customers if properly requested and approved.
Our online sites, including our brand.com sites as well as those operated by authorized retailers and through third-party online platforms are across our geographic regions, with a majority of these online sales generated in mainland China, the United States and the United Kingdom.com sites as well as those operated by authorized retailers and through third-party online platforms are in approximately 50 countries, with a majority of these online sales generated in mainland China, the United States and the United Kingdom. As of June 30, 2026, we operated approximately 1,600 freestanding stores, which reflects the closure of freestanding stores in unproductive areas of our business and the opening of new freestanding stores during the fiscal year, as we continue to evolve our strategic focus on accelerating best-in-class consumer coverage. Most freestanding stores are operated by us under a single brand name, such as M·A·C, Jo Malone London and Le Labo. Approximately 300 of the freestanding stores are multi-branded company stores, primarily in outlet malls. Over 300 of the freestanding stores are multi-branded company stores, primarily in outlet malls.
We maintain dedicated sales teams that manage our retail accounts. We have wholly-owned operations in over 50 countries through which we market, sell and distribute our products. In certain countries, we sell our products through carefully selected distributors who we believe share our commitment to protecting the image and position of our brands. For information regarding our net sales by geographic region, see Item 8. Financial Statements and Supplementary Data – Note 14 – Revenue Recognition.
8
We continue to develop our strategy, assess performance and allocate resources by product category and will continue to report results by product category. To enhance accountability and streamline operations within the organization, as well as to align with our leadership changes during the second half of fiscal 2025, we have reorganized our geographic regions as of the fiscal 2026 first quarter. To enhance accountability and streamline operations within the organization, as well as to align with our recently announced leadership changes, we have reorganized our geographic regions. Accordingly, results by geographic region for fiscal 2026 and comparative fiscal 2025 and 2024 are reported under the new regional structure. Our four geographic regions effective July 1, 2025 are:
•The Americas, which includes North America and Latin America;
•Europe, the United Kingdom and Ireland and Emerging Markets ("EUKEM"), which includes the geographic markets of our previously reported Europe, the Middle East & Africa ("EMEA") region, excludes our global travel retail business previously reported in our EMEA region, and includes our Southeast Asian Emerging Markets, previously reported in our Asia/Pacific region, of Indonesia, Malaysia, the Philippines, Thailand and Vietnam;
•Asia/Pacific, which includes certain geographic markets of our previously reported Asia/Pacific region, such as Japan, Korea, Hong Kong SAR, and Australia, among others, as well as our global travel retail business, previously reported in our EMEA region; and
•Mainland China, previously reported in our Asia/Pacific region, is reported as a separate region.
Our “Emerging Markets” are Argentina, Brazil, Chile, Colombia, Mexico, Panama and Peru in The Americas, and are India, Indonesia, Israel, Malaysia, the Middle East, the Philippines, Russia, South Africa, Thailand, Turkey and Vietnam in EUKEM.
Our “Priority Emerging Markets” are Brazil and Mexico in The Americas and India, Indonesia, Malaysia, the Middle East, the Philippines, South Africa, Thailand, Turkey and Vietnam in EUKEM. Beginning in fiscal 2027, South Africa will no longer be included within our "Priority Emerging Markets".
Customers
Our strategy is to build strong relationships globally with select retailers, and our senior management works with executives of our major retail accounts on a regular basis in support of these relationships. We believe we are viewed as an important supplier to these customers. In addition, we connect with our consumers directly through freestanding stores, e-commerce sites and social media to build a robust omnichannel experience that allows consumers to shop in these and other channels.
Marketing
Our strategy to market and promote our products begins with our well-diversified portfolio of distinctive brands across four major product categories. Our portfolio can be deployed in multiple distribution channels, key travel corridors and geographies and we continue to expand consumer coverage by participating in high-growth markets, channels, price tiers and media where the strength, awareness and desirability of our brands provide a competitive advantage. Our portfolio can be deployed in multiple distribution channels, key travel corridors and geographies and we continue to expand our consumer coverage by entering high-growth, consumer-preferred channels, markets, media and price tiers where our global reputation and awareness of our brands benefit us. Our marketing approach reflects a consumer engagement model designed to support the long-term equity and desirability of our brands while driving consumer discovery, engagement and conversion across markets and channels. By placing the consumer at the center of every engagement and leveraging our category, geographic and channel diversity, we are able to expand our consumer coverage and reach consumers across developed and emerging markets with products, services and experiences designed for local relevance, inclusiveness and appeal with tailored experiences to local consumer preferences, cultural context and shopping behaviors. By putting the consumer at the center of every engagement and leveraging our geographic and distribution channel diversity, we offer strong consumer coverage which allows us to reach and engage local consumers across an array of developed and emerging markets by emphasizing products and services with local relevance, inclusiveness and appeal. This strategy is built around “Bringing the Best to Everyone We Touch.”
Our founder, Mrs. Estée Lauder, formulated this unique marketing philosophy to provide “High-Touch” service and high-quality products as the foundation for a solid and loyal consumer base. We have further expanded our “High-Touch” execution to build more personalized consumer experiences through digital and physical demonstration and tailored trial-to-loyalty pathways with an integrated consumer engagement and marketing model across evolving physical and digital environments to support discovery, consideration, conversion and loyalty across our own and our retail partners' platforms.
Our marketing strategies vary by brand, local market and distribution channel. We have a diverse portfolio of brands, and we employ different engagement models suited to each brand’s core consumer, equity, distribution, product focus, and local relevance. We have a diverse portfolio of brands, and we employ different engagement models suited to each brand’s equity, distribution, product focus, understanding of the core consumer and local relevance.
9
Hero products are at the core of our brand marketing strategies. They are the pillars of our brands and historically have provided strong results through high repeat sales and consumer loyalty. In addition to continuing to retain existing consumers, we are also strategically focused on attracting new consumers. Our hero products provide an opportunity for new consumers to experience our high quality products, driving consumer traffic across all channels of distribution. We aim to further strengthen our hero products, and create new ones, through continuous review of our product portfolio and creation of breakthrough, on-trend and commercial innovation that delivers fast-to-market products across prestige price tiers focused on in-demand subcategories, benefits, and occasions. We aim to further strengthen our hero products, and create new ones, through continuous review of our product portfolio and transformative innovation that delivers fast-to-market, trend-driven products across prestige price tiers focused on in-demand subcategories, benefits, and occasions.
Our marketing planning approach focuses on maximizing the visibility, effectiveness and efficiency of our marketing and advertising investments across the consumer journey to accelerate new consumer acquisition. We leverage our deep category understanding and consumer intelligence and local insights to optimize allocation of resources across different media outlets and retail touch points to resonate with our most discerning consumers most effectively. This approach includes strategically deploying our brands and tailoring product assortments and communications to fit local tastes and preferences in markets and cities, and also using these insights to develop new ways to innovate, engage consumers, build brand equity and sell products. This includes strategically deploying our brands and tailoring product assortments and communications to fit local tastes and preferences in cities and neighborhoods, and also using these insights to develop new ways to innovate, engage consumers, build brand equity and sell products. We deploy integrated marketing and media programs designed to both generate and optimize consumer demand and capture purchase intent across physical and digital environments. Our approach seeks to accelerate the impact of brand-building activities through broad reach media such as print, television and out-of-home advertising, to increase top-of mind awareness, engagement and long-term brand equity and desirability. Meanwhile, we seek to drive efficiencies with data, technology and precision of our performance and digital marketing activities, as well as leverage creator and influencer partnerships and optimize search environments and retail media networks, to better support discovery, conversion and loyalty across digital and social platforms. Together, these activities enable a full-funnel marketing approach that connects brand storytelling, consumer engagement, search and discovery, commerce and loyalty across our own platforms and those of our retail partners to meet evolving consumer shopping behaviors. Our One ELC Operating Model and unified global media model create a new enterprise operating system for growth. Powered by a single global partner and an enterprise-led approach to media planning and buying, this model unlocks greater scale, precision, and impact, thus strengthening our ability to generate and capture demand while improving media effectiveness, efficiency, and agility across markets.
As prestige beauty discovery increasingly occurs across social platforms, creator ecosystems, digital marketplaces and retailer platforms, search engines and emerging LLMs (large language models), we continue to invest in capabilities that improve the visibility, relevance and performance of our brands in these environments. This includes strengthening content, product information, digital merchandising, search optimization and media activation across both our own channels and those of our authorized retail partners. We are leveraging artificial intelligence (“AI”) to enhance personalization at scale, increase speed to market and reduce costs across the marketing value chain. We are leveraging artificial intelligence (“AI”) across the marketing value chain to enhance personalization at scale, increase speed to market and reduce costs. As examples, we leverage AI and related technologies to help identify trends and insights, inform campaign development, test and optimize creative content, generate selected marketing content, improve targeting and search visibility, and optimize media planning and measurement. We collaborate with a range of expert partners across technology, media, creative services, commerce and data analytics. These partnerships help expand our capabilities, accelerate innovation, enable agility, and drive efficiency, while leveraging human expertise and technology to enhance the consumer experience. We also anticipate and monitor emerging platforms, balancing speed to market with brand protection to ensure readiness while safeguarding brand equity.
Promotional activities, in-store displays, digital merchandising and sampling programs are designed to attract new consumers, build demand and loyalty and introduce existing consumers to other product offerings from the respective brands. Promotional activities, in-store displays, and online navigation are designed to attract new consumers, build demand and loyalty and introduce existing consumers to other product offerings from the respective brands. Our marketing efforts also benefit from cooperative advertising programs with some retailers, some of which are supported by coordinated promotions, such as sampling programs, including purchase with purchase and gift with purchase. Sampling is a key promotional activity as it allows consumers to experience product quality and perceived benefits directly, and as such sample products are very effective inducements to purchases by new and existing consumers. Sampling is a key promotional activity as the quality and perceived benefits of sample products are very effective inducements to purchases by new and existing consumers. Our marketing and sales executives spend considerable time in the field meeting with consumers, retailers, beauty advisors and makeup artists at the points of sale to enable us to offer a seamless and consistent brand experience across distribution channels.
10
Information Technology
Information technology, including operational technology and our websites, is a key enabler of all aspects of our business, from research and development, manufacturing and distribution, to marketing, sales and order processing, consumer experiences as well as finance and human resources. We continue to make strategic investments to align with our long-term strategy of maintaining and enhancing our information technology and cybersecurity infrastructure, keeping pace with cyber threat actors and our evolving business needs. We continue to make strategic investments to align with our long-term strategy and to maintain and enhance our information technology and cybersecurity infrastructure. We are focused on optimizing adoption of such investments to maximize return on investment and realized value. The modernization and simplification of our information technology ecosystem remains a key focus, as we increasingly leverage the benefits of the cloud and as the organization transforms, including through the leveraging of external organizations.
We recognize information technology presents opportunities for competitive advantage, and we continue to invest in new capabilities and the use of emerging technologies, including investments in AI, across various aspects of our business. 10Table of ContentsWe recognize technology presents opportunities for competitive advantage, and we continue to invest in new capabilities and the use of emerging technologies, including investments in AI, across various aspects of our business. As an example, this includes the strategic utilization of data to provide better visibility into consumer trends, to increase responsiveness in our product development.
Research and Development
We believe we are an industry leader in the development of new products, and strive to deliver breakthrough, on-trend and commercial innovation to consumers around the world. Our research and innovation team, which includes scientists, engineers, analysts, and other employees involved in product and packaging innovation, works closely with our marketing and product development teams, as well as external partners in certain cases, to develop new products and product-line extensions, improve, redesign or reformulate existing products, generate new technologies, design new testing methods, identify new materials and create new packaging concepts. Our research and development group, which includes scientists, engineers, analysts, and other employees involved in product and packaging innovation, works closely with our marketing and product development teams, as well as external partners in certain cases, to generate new technologies, design new testing methods, identify new materials, develop new products and product-line extensions, create new packaging concepts, and improve, redesign or reformulate existing products. In addition, these research and innovation personnel provide ongoing technical assistance and know-how to quality assurance and manufacturing personnel on a worldwide basis, to ensure consistent global standards for our products and to deliver environmentally responsible products that meet or exceed consumer expectations. In addition, these research and development personnel provide ongoing technical assistance and know-how to quality assurance and manufacturing personnel on a worldwide basis, to ensure consistent global standards for our products and to deliver environmentally responsible products that meet or exceed consumer expectations. The research and innovation team has research-based working relationships with several U.S. and international dermatology and medical institutions, research universities and educational facilities, which supplement internal capabilities. Members of the research and innovation team are also responsible for product safety, registration and regulatory compliance matters. Members of the research and development group are also responsible for product safety, registration and regulatory compliance matters.
Our research and development costs totaled $278 million, $316 million and $360 million in fiscal 2026, 2025 and 2024, respectively, and are expensed as incurred. As of June 30, 2026 and 2025, we had approximately 1,000 and 1,100 employees, respectively, engaged in research and development activities. As of June 30, 2025, we had approximately 1,100 employees engaged in research and development activities. We maintain research and development programs at certain of our principal facilities and facilities dedicated to performing research and development, see
Recently Filed
Click on a ticker to see risk factors
| Ticker * | File Date |
|---|---|
| EL | an hour ago |
| INBS | 5 hours ago |
| MRCY | 20 hours ago |
| AXIL | 21 hours ago |
| TAYD | 1 day, 5 hours ago |
| FN | 1 day, 6 hours ago |
| GURE | 1 day, 20 hours ago |
| SNDK | 1 day, 20 hours ago |
| LITE | 1 day, 21 hours ago |
| EXTR | 4 days, 18 hours ago |
| WDC | 4 days, 21 hours ago |
| STRG | 4 days, 21 hours ago |
| TEAM | 4 days, 21 hours ago |
| PTIX | 4 days, 22 hours ago |
| HRB | 4 days, 23 hours ago |
| COHR | 5 days, 5 hours ago |
| AVT | 5 days, 7 hours ago |
| AMCR | 5 days, 7 hours ago |
| BIVI | 6 days, 18 hours ago |
| CRS | 6 days, 21 hours ago |
| MSGE | 6 days, 21 hours ago |
| PFGC | 6 days, 21 hours ago |
| KMT | 6 days, 22 hours ago |
| CAH | 1 week, 1 day ago |
| GPOX | 1 week, 1 day ago |
| SYNA | 1 week, 1 day ago |
| ZLME | 1 week, 2 days ago |
| CVSA | 1 week, 5 days ago |
| PTON | 1 week, 5 days ago |
| CACI | 1 week, 5 days ago |
| FOXA | 1 week, 6 days ago |
| OTEX | 1 week, 6 days ago |
| FDXF | 1 week, 6 days ago |
| ADP | 1 week, 6 days ago |
| PCTY | 2 weeks ago |
| LRN | 2 weeks ago |
| STX | 2 weeks ago |
| PG | 2 weeks ago |
| BR | 2 weeks, 1 day ago |
| LSEB | 2 weeks, 1 day ago |
| RELL | 2 weeks, 2 days ago |
| NRUC | 2 weeks, 5 days ago |
| RMGL | 2 weeks, 5 days ago |
| MWYN | 2 weeks, 5 days ago |
| WS | 2 weeks, 5 days ago |
| NEOG | 2 weeks, 5 days ago |
| WOR | 2 weeks, 5 days ago |
| VNOV | 2 weeks, 6 days ago |
| PMCB | 2 weeks, 6 days ago |
| MSFT | 2 weeks, 6 days ago |
