GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Jun. 30, 2026

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The Company assigns goodwill at the time of acquisition to a reporting unit, which is one level below the Company's operating segments. The skin care, makeup, fragrance and hair care product categories are the Company's operating segments.

The following table presents goodwill by product category and the related change in the carrying amount:


(In millions)	Skin Care		Makeup		Fragrance		Hair Care		Total
Balance as of June 30, 2024
Goodwill	$	1,612	$	1,116	$	253	$	353	$	3,334
Accumulated impairments	(429)		(732)		(30)		—		(1,191)
	1,183		384		223		353		2,143


Impairment charges	—		(13)		—		—		(13)
Translation adjustments, goodwill	4		—		7		—		11
Translation adjustments, accumulated impairments	(6)		—		—		—		(6)
	(2)		(13)		7		—		(8)

Balance as of June 30, 2025
Goodwill	1,616		1,116		260		353		3,345
Accumulated impairments	(435)		(745)		(30)		—		(1,210)
	1,181		371		230		353		2,135

Goodwill acquired during the year	—		—		13		—		13

Translation adjustments, goodwill	(73)		—		(2)		—		(75)
Translation adjustments, accumulated impairments	34		—		—		—		34
	(39)		—		11		—		(28)

Balance as of June 30, 2026
Goodwill	1,543		1,116		271		353		3,283
Accumulated impairments	(401)		(745)		(30)		—		(1,176)
Total goodwill	$	1,142	$	371	$	241	$	353	$	2,107

Other Intangible Assets

Other intangible assets primarily include trademarks and customer lists, as well as patents, resulting from or related to businesses and assets purchased by the Company. Indefinite-lived intangible assets (e.g., trademarks) are not subject to amortization and are assessed at least annually for impairment as of the beginning of the fiscal fourth quarter or more frequently if certain events or circumstances exist. Definite-lived intangible assets (e.g., customer lists) are amortized on a straight-line basis over their expected period of benefit, approximately 7 years to 14 years. The costs incurred and expensed by the Company to extend or renew the term of acquired intangible assets during fiscal 2026, 2025 and 2024 were not material to the Company’s consolidated statements of earnings (loss).

Other intangible assets consist of the following:


	June 30, 2026						June 30, 2025
(In millions)	Gross Carrying Value		Accumulated Amortization		Total Net Book Value		Gross Carrying Value		Accumulated Amortization		Total Net Book Value
Amortizable intangible assets:
Customer lists and other	$	1,870	$	1,372	$	498	$	1,984	$	1,348	$	636


Non-amortizable intangible assets:
Trademarks					3,081						3,123
Total other intangible assets, net					$	3,579					$	3,759

The aggregate amortization expense related to amortizable intangible assets for fiscal 2026, 2025 and 2024 was $105 million, $131 million and $144 million, respectively. The estimated aggregate amortization expense for each of the next five fiscal years is as follows:


	Fiscal
(In millions)	2027		2028		2029		2030		2031
Estimated aggregate amortization expense	$	86	$	69	$	67	$	65	$	48

Fiscal 2025 Impairment Analysis

For further information on the Company's policies relating to its impairment assessment of goodwill and other indefinite-lived intangible assets and long-lived assets, see Goodwill and Other Indefinite-lived Intangible Assets and Long-Lived Assets within Note 2 – Summary of Significant Accounting Policies.

During the fiscal 2025 second quarter, the TOM FORD brand experienced lower-than-expected growth within key geographic regions and channels, including in mainland China, Asia travel retail and Hong Kong SAR. Also during the fiscal 2025 second quarter, the Too Faced reporting unit experienced lower-than-expected results in key geographic regions and channels. As a result, the Company made revisions to the internal forecasts relating to its TOM FORD brand and Too Faced reporting unit. Additionally, there were increases in the weighted average cost of capital for both the TOM FORD brand and Too Faced reporting unit as compared to the prior-year annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2024.

The Company concluded that the changes in circumstances in the TOM FORD brand and Too Faced reporting unit, along with increases in the weighted average cost of capital, triggered the need for interim impairment reviews of the TOM FORD trademark and the Too Faced trademark and goodwill. These changes in circumstances were also an indicator that the carrying amounts of Too Faced’s long-lived assets, including customer lists, may not be recoverable. Accordingly, the Company performed interim impairment tests for the TOM FORD and Too Faced trademarks and Too Faced goodwill as well as a recoverability test for the Too Faced long-lived assets as of December 31, 2024. The Company concluded that the carrying value of the trademark intangible assets exceeded their estimated fair values, which were determined utilizing the relief-from-royalty method, and recorded an impairment charge of $773 million for TOM FORD and $75 million for Too Faced. The Company concluded that the carrying amounts of the long-lived assets for Too Faced were recoverable. Additionally, as a result of the interim impairment review, the remaining carrying value of Too Faced’s goodwill was not recoverable and the Company recorded an impairment charge of $13 million, reducing the carrying value to zero. The significant assumptions used in the relief-from-royalty method include revenue growth rates and profit margins, terminal values, weighted average cost of capital used to discount future cash flows and royalty rates. The most significant unobservable input used to estimate the fair value of the TOM FORD and Too Faced trademark intangible assets was the weighted average cost of capital, which was 11.5% and 14%, respectively.

Based on the Company’s annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2025, the Company determined that the carrying value of the Dr.Jart+ and Too Faced trademarks exceeded their estimated fair values. As it relates to Dr.Jart+, a decision was made in the prior year in the reporting unit’s operating plan to exit the travel retail channel. A revised strategy was implemented that included increased direct investment in other areas of the business, including in mainland China, to support the brand’s future growth. However, given the lower-than-expected growth within key geographic regions in fiscal 2025, specifically within mainland China and Korea, it was determined that revisions to the internal forecasts were necessary which were finalized and approved in the fiscal 2025 fourth quarter in connection with the brand’s annual planning process, and reflected in the goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2025. The Too Faced reporting unit continued to experience lower-than-expected results in key geographic regions and channels and as such, it was determined that revisions to the internal forecasts were necessary. These changes in circumstances were also indicators that the carrying amounts of their respective long-lived assets, including customer lists, may not be recoverable.

For purposes of calculating the estimated fair values of the trademark intangible assets, the Company utilized the relief-from-royalty method and recorded an impairment charge of $83 million for Dr.Jart+ and $50 million for Too Faced. The Company then performed a recoverability analysis of the Dr.Jart+ and Too Faced long-lived asset groups and, based on the estimated undiscounted cash flows of the asset groups, concluded that the carrying amount of the long-lived assets for Dr.Jart+ were not recoverable, whereas for Too Faced were recoverable. For purposes of calculating the impairment charge for the long-lived assets of Dr.Jart+, the asset group was determined to be the reporting unit. The estimated fair value of the asset group was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the asset group. As a result, the calculated impairment charge to be allocated to the long-lived assets of Dr.Jart+ was $292 million. The Company concluded that the carrying value of the Dr.Jart+ customer list intangible asset exceeded its estimated fair value, which was determined utilizing the multi-period excess earnings income approach by discounting the incremental after-tax cash flows over multiple periods. The estimated fair value of all other long-lived assets of Dr. Jart+ exceeded their carrying values. As a result, the $292 million impairment charge was allocated entirely to the Dr.Jart+ customer list intangible asset.

The significant assumptions used in the calculations of the Dr.Jart+ and Too Faced trademark and Dr.Jart+ customer list impairments include revenue growth rates and profit margins, terminal values, weighted average cost of capital used to discount future cash flows and royalty rates for trademarks. The most significant unobservable input used to estimate the impairments was the weighted average cost of capital, which was 10.5% for Dr.Jart+ for both the trademark and customer list impairments, and 13.5% for Too Faced.

A summary of the impairment charges for the three and twelve months ended June 30, 2025 and the remaining trademark, customer list and goodwill carrying values as of June 30, 2025, for the TOM FORD brand and the Too Faced and Dr.Jart+ reporting units, are as follows:


			Impairment Charges(1)												Carrying Value
(In millions)		Three Months Ended June 30, 2025					Twelve Months Ended June 30, 2025						As of June 30, 2025
Brand/Reporting Unit	Geographic Region		Trademark		Customer List		Goodwill		Trademark		Customer List		Goodwill		Trademark(2)		Customer List		Goodwill
TOM FORD	The Americas		$	—	$	—	$	—	$	773	$	—	$	—	$	1,805	$	—	$	—
Too Faced	The Americas		50		—		—		125		—		13		62		50		—
Dr.Jart+(3)	Asia/Pacific		83		292		—		83		292		—		42		189		—
Total			$	133	$	292	$	—	$	981	$	292	$	13	$	1,909	$	239	$	—

(1)The date of the fair value measurement for the TOM FORD trademark intangible asset was December 31, 2024. The dates of the fair value measurement for the Too Faced trademark intangible asset and Too Faced reporting unit were December 31, 2024 and April 1, 2025. The date of the fair value measurement for the Dr. Jart+ trademark intangible asset and asset group was April 1, 2025.

(2)The carrying values of the trademark intangible assets, immediately subsequent to the impairment charges, are equal to their estimated fair values. The carrying values as of June 30, 2025 are consistent with the carrying values at the fair value measurement date, with the exception of the impact of foreign currency translation for Dr.Jart+.

(3)The carrying value of the Dr.Jart+ asset group, immediately subsequent to the customer list impairment charge, was equal to its estimated fair value.

The impairment charge related to the TOM FORD trademark intangible asset of $773 million was reflected in the fragrance, makeup and other product categories of $549 million, $170 million and $54 million, respectively. The trademark and goodwill impairment charges related to Too Faced were reflected in the makeup product category. The trademark and customer list impairment charges related to Dr.Jart+ were reflected in the skin care product category. The aggregate trademark and customer list impairment charges are recorded in the Impairment of other intangible assets line item in the accompanying consolidated statements of earnings (loss).

Fiscal 2024 Impairment Analysis

Based on the Company’s annual goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2024, the Company determined that the carrying value of the Dr.Jart+ reporting unit and trademark exceeded their estimated fair values. Given the lower-than-expected growth within key geographic regions, the reporting unit has made a strategic shift in its operating plan to exit the travel retail channel. This revised strategy also includes increased direct investment in other areas of the business, including in mainland China, to support the brand’s future growth. As a result of these changes in strategy, the Company made revisions to the internal forecasts relating to the Dr.Jart+ reporting unit which were finalized and approved in the fiscal 2024 fourth quarter, and reflected in the goodwill and other indefinite-lived intangible asset impairment testing as of April 1, 2024. These changes in circumstances were also indicators that the carrying amounts of its respective long-lived assets may not be recoverable. The Company concluded that the carrying value of the trademark intangible asset exceeded its estimated fair value, which was determined utilizing the relief-from-royalty method to determine discounted projected future cash flows and recorded an impairment charge of $180 million. The Company then performed a recoverability analysis of the Dr.Jart+ long-lived asset group and, based on the estimated undiscounted cash flows of the asset group, concluded that the carrying amount of the long-lived assets were recoverable. After adjusting the carrying value of the trademark, the Company completed a quantitative impairment test for goodwill. As the carrying value of the reporting unit exceeded its estimated fair value, the Company recorded a goodwill impairment charge of $291 million. The estimated fair value of the reporting unit was based upon an equal weighting of the income and market approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit. The significant assumptions used in these approaches include revenue growth rates and profit margins, terminal value, weighted average cost of capital used to discount future cash flows, comparable market multiples for the reporting unit, and royalty rate for the trademark. The most significant unobservable input used to estimate the fair value of the reporting unit and trademark intangible asset was the weighted average cost of capital, which was 10.5%.

A summary of the impairment charges for the twelve months ended June 30, 2024 and the remaining trademark and goodwill carrying values as of June 30, 2024 are as follows:

Impairment Charges(1)

Carrying Value

(In millions)

Twelve Months Ended

June 30, 2024

As of June 30, 2024

Brand/Reporting Unit

Geographic Region

Trademark

Goodwill

Trademark(2)

Goodwill

Dr.Jart+

Asia/Pacific

180

291

129

—

(1) The date of the fair value measurement for the Dr.Jart+ reporting unit and trademark intangible asset was April 1, 2024.

(2) The carrying value of the trademark intangible asset, immediately subsequent to the impairment charge, is equal to its estimated fair value. The carrying value as of June 30, 2024 is consistent with the carrying value at the fair value measurement date, with the exception of the impact of foreign currency translation.

The impairment charges for the twelve months ended June 30, 2024 were reflected in the skin care product category.