As announced on November 1, 2023, the Company launched the Profit Recovery and Growth Plan ("PRGP"), to help progressively rebuild its profit margins in fiscal years 2025 and 2026.

The PRGP is focused on rebuilding stronger, more sustainable profitability, supporting sales growth acceleration and increasing speed and agility. The plan is designed to improve gross margin, lower the cost base and reduce overhead expenses, while increasing investments in key consumer-facing activities.

As a component of the PRGP, on February 5, 2024, the Company announced a two-year restructuring program. The restructuring program’s main focus included the reorganization and rightsizing of certain areas of the Company as well as simplification and acceleration of processes. The Company committed to this course of action on February 1, 2024.

In connection with the restructuring program, the Company estimated a net reduction in the range of approximately 1,800 to 3,000 positions globally. This reduction took into account the elimination of some positions as well as retraining and redeployment of certain employees in select areas.

The Company planned to substantially complete specific initiatives under the restructuring program through fiscal 2026, and expected that the restructuring program would result in restructuring and other charges totaling between $500 million and $700 million, before taxes, consisting of employee-related costs, asset-related costs, contract terminations and other costs associated with implementing these initiatives.

After reviewing additional potential initiatives and the progress of previously approved initiatives, on February 3, 2025, the Company committed to the expansion of the PRGP, including an expansion of the restructuring program, with updated ranges of net reductions in positions globally and expected restructuring and other charges, as discussed below.

The expansion of the overall PRGP is focused on three key areas: (i) adopt a more competitive approach to procurement, a key pillar of savings, by further consolidating spending and strategically re-evaluating key supplier relationships; (ii) further improve efficiencies within our supply chain network through a zero-waste approach, aiming to improve demand forecasting and innovation planning to minimize excess inventory and product destruction; and (iii) outsource select services to proven global partners.

The expanded component of the restructuring program, as noted above, began during the Company’s fiscal 2025 third quarter with all initiatives expected to be approved by the end of fiscal 2026, with specific initiatives under the expanded component of the restructuring program expected to be substantially completed by the end of fiscal 2027. The focus of the overall expanded restructuring program (now, collectively the “Restructuring Program”) includes (i) reorganization and rightsizing of certain areas, (ii) simplification and acceleration of processes, (iii) outsourcing of select services and (iv) evolution of go-to-market footprint and selling models.

As of June 30, 2026, approvals under the Restructuring Program concluded, and by the end of fiscal 2027, the cumulative approved initiatives are expected to be substantially completed.

In connection with the Restructuring Program, the Company had initially expected a net reduction in the range of approximately 5,800 to 7,000 positions globally, which was updated during fiscal 2026 to a range of 9,000 to 10,000. Based on the total approved initiatives, as of June 30 2026, the Company estimates a final net reduction of approximately 10,000 positions globally. This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas.

The Company had initially expected that the Restructuring Program would result in restructuring and other charges totaling between $1,200 million and $1,600 million, before taxes, which was updated during fiscal 2026 to a range of $1,500 million and $1,700 million. Based on the total approved initiatives, as of June 30, 2026, the Company now estimates total restructuring and other charges of $1,748 million, before taxes, consisting of employee-related costs, asset-related costs, contract terminations and other costs associated with implementing these initiatives, which other than the non-cash charges, have been funded from cash provided by operations for initiatives implemented to date, and for the remaining initiatives are expected to result in future cash expenditures funded from cash provided by operations.


	Sales Returns (included in Net Sales)		Cost of Sales		Operating Expenses				Total
(In millions)					Restructuring Charges		Other Charges
Total Charges Approved
Fiscal 2024	$	—	$	—	$	109	$	78	$	187
Fiscal 2025	4		10		443		36		493
Fiscal 2026	39		5		760		264		1,068
Cumulative charges approved through June 30, 2026	$	43	$	15	$	1,312	$	378	$	1,748

Included in the above table, cumulative restructuring charges for initiatives approved by the Company in connection with the Restructuring Program as of June 30, 2026, by major cost type, were:


(In millions)	Employee- Related Costs		Asset- Related Costs		Contract Terminations		Other Exit Costs		Total
Restructuring Charges Approved
Fiscal 2024	$	93	$	7	$	—	$	9	$	109
Fiscal 2025	419		7		3		14		443
Fiscal 2026	532		182		25		21		760
Cumulative charges approved through June 30, 2026	$	1,044	$	196	$	28	$	44	$	1,312

•Enterprise Business Services – The Company approved initiatives in connection with the transformation of its global operating model to (i) consolidate certain service providers, (ii) expand outsourced services, and (iii) redesign and standardize the related end-to-end business processes, leveraging advanced technology to improve productivity. These actions will primarily result in other charges, including professional services related to the design, implementation and execution of the initiative. These charges include transition and transformation support, process design, and costs to support the global project management office for this initiative. These actions will also result in employee severance through a net reduction in workforce and contract termination charges.

•Value Chain Optimization – The Company approved initiatives to reduce spans and layers, as well as right-size organizational capabilities and facilities within its supply chain and research and development functions and networks. These actions will primarily result in employee severance through a net reduction in workforce, as well as asset-related costs and costs to decommission and relocate activities.

•Enabling Function Re-Invention – The Company approved initiatives to reorganize and right-size various corporate functions. Additionally, as a result of the reorganization and right-sizing of various areas of the organization as previously approved under the Restructuring Program, the Company approved initiatives to exit office leases. These activities will primarily result in employee severance through a net reduction in workforce and asset-related costs.

•Future of Brand-led Model – The Company approved initiatives to reorganize and simplify its global marketing and creative operating model, as well as redesign spans and layers in its marketing, creative and other functions within the brand and product category structures to make them leaner, faster and more agile and drive greater efficiency and effectiveness. These activities will primarily result in employee severance through a net reduction in workforce.

•Go-to-Market Operating Model Acceleration – The Company approved initiatives to optimize and right-size the organizational structure within its geographic regions to drive greater efficiency and effectiveness. Additionally, initiatives were approved to reorganize and optimize the selling model within its geographic regions, and to right-size select brand organizations, given its strategic focus on accelerating best-in-class consumer coverage, including its evolution toward high-growth channels, and the constant evaluation of its brand portfolio. These activities will result in employee severance through a net reduction in workforce, costs associated with sales returns and inventory write-offs, as well as asset-related costs.

•Digital Organization Transformation – The Company approved initiatives to reorganize and right-size its technology functions, which support its internal enterprise operations and commercial capabilities in order to create a leaner, more efficient and more agile organization. Additionally, initiatives were approved to modernize the Company's direct-to-consumer digital technology infrastructure to deliver best-in-class omnichannel consumer experiences. These activities will primarily result in employee severance through a net reduction in workforce, as well as asset-related costs.

Once the relevant accounting criteria have been met, the Company expects to record cumulative restructuring and other charges of approximately $1,748 million (before tax) in connection with these initiatives, which other than the non-cash charges, have been funded from cash provided by operations for initiatives implemented to date, and for the remaining initiatives, are expected to result in future cash expenditures funded from cash provided by operations.

Employee-Related Costs – Employee-related costs are primarily comprised of severance and other post-employment benefit costs, calculated based on salary levels, prior service and other statutory minimum benefits, if applicable.

Asset-Related Costs – Asset-related costs primarily consist of asset write-offs or accelerated depreciation related to long-lived assets (including operating lease right-of-use assets) that will be taken out of service prior to their existing useful life as a direct result of a restructuring initiative.

Contract Terminations – Costs related to contract terminations include continuing payments to a third party after the Company has ceased benefiting from the rights conveyed in the contract, or a payment made to terminate a contract prior to its expiration.

Other Exit Costs – Other exit costs related to restructuring activities generally include costs to relocate facilities or employees, recruiting to fill positions as a result of relocation of operations, and outplacement for separated employees.

Sales Returns and Cost of Sales – Product returns (offset by the related cost of sales) and inventory write-offs or write-downs as a direct result of an approved restructuring initiative to exit certain businesses or locations are recorded as a component of Net sales and/or Cost of sales when estimable and reasonably assured.

Other Charges – Other charges related to the design and implementation of approved initiatives are charged to Operating expenses as incurred and primarily include the following:

•Consulting and other professional services for transition support, transformational organization design of the future structures and processes, as well as the implementation and execution thereof;

•Costs to establish and maintain a Project Management Office for the duration of the Restructuring Program, including internal costs for employees dedicated solely to project management activities, and consulting services to assist with business case development and execution; and

•Recruitment and training costs for new and reskilled employees to acquire and apply the capabilities needed to perform responsibilities as a direct result of an approved restructuring initiative.


	Sales Returns (included in Net Sales)		Cost of Sales		Operating Expenses				Total
(In millions)					Restructuring Charges		Other Charges
Total Charges
Fiscal 2024	$	—	$	—	$	92	$	23	$	115
Fiscal 2025	—		9		432		54		495
Fiscal 2026	13		(2)		608		205		824
Cumulative charges through June 30, 2026	$	13	$	7	$	1,132	$	282	$	1,434


(In millions)	Employee- Related Costs		Asset- Related Costs		Contract Terminations		Other Exit Costs		Total
Restructuring Charges
Fiscal 2024	$	90	$	2	$	—	$	—	$	92
Fiscal 2025	413		11		3		5		432
Fiscal 2026	514		64		22		8		608
Cumulative charges through June 30, 2026	$	1,017	$	77	$	25	$	13	$	1,132


(In millions)	Employee- Related Costs		Asset- Related Costs		Contract Terminations		Other Exit Costs		Total
Charges	$	90	$	2	$	—	$	—	$	92
Cash payments	—		—		—		—		—
Non-cash asset-related costs	—		(2)		—		—		(2)
Translation and other adjustments	(2)		—		—		—		(2)
Balance at June 30, 2024	88		—		—		—		88

Charges	413		11		3		5		432
Cash payments	(126)		—		(1)		(5)		(132)
Non-cash asset-related costs	—		(11)		—		—		(11)
Translation and other adjustments	(6)		—		—		—		(6)
Balance at June 30, 2025	369		—		2		—		371

Charges	514		64		22		8		608
Cash payments	(261)		(5)		(2)		(7)		(275)
Non-cash asset-related costs	—		(59)		—		—		(59)
Translation and other adjustments	(14)		—		1		—		(13)
Balance at June 30, 2026	$	608	$	—	$	23	$	1	$	632

Accrued restructuring charges at June 30, 2026 relating to the Restructuring Program are expected to result in cash expenditures funded from cash provided by operations of approximately $530 million, $85 million, and $17 million for fiscal 2027, 2028, and 2029, respectively.

Charges associated with restructuring and other activities are not allocated to the Company's product categories or geographic regions because they are centrally directed and controlled, are not included in internal measures of product category or geographic region performance and result from activities that are deemed Company-wide initiatives to redesign, resize and reorganize select areas of the business.