v3.26.1
REVENUE RECOGNITION
 12 Months Ended
Jun. 30, 2026
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
Disaggregation of net sales by the Company's geographic regions(1) are as follows:

Year Ended June 30,
(In millions)202620252024
The Americas$4,463 $4,410 $4,579 
Europe, the United Kingdom and Ireland and Emerging Markets ("EUKEM")3,794 3,566 3,539 
Asia/Pacific(2)
3,746 3,606 4,587 
Mainland China3,058 2,741 2,904 
15,061 14,323 15,609 
Returns associated with restructuring and other activities(12)3 (1)
Net sales$15,049 $14,326 $15,608 
(1)The Company has reorganized its geographic regions, effective July 1, 2025 and has presented the information for each fiscal year under this new basis.
(2)The net sales from the Company’s travel retail business are included in the Asia/Pacific region.

Accounts Receivable
Accounts receivable, net is stated net of the allowance for doubtful accounts, including credit losses, and customer deductions totaling $44 million and $38 million as of June 30, 2026 and 2025, respectively. Payment terms are short-term in nature and are generally less than one year.

Changes in the allowance for credit losses are as follows:
June 30,
(In millions)20262025
Allowance for credit losses, beginning of year
$26 $14 
Provision for expected credit losses20 11 
Write-offs, net & other(16)1 
Allowance for credit losses, end of year
$30 $26 
The remaining balance of the allowance for doubtful accounts and customer deductions of $14 million and $12 million as of June 30, 2026 and June 30, 2025, respectively, relates to non-credit losses, which are primarily due to customer deductions.
Deferred Revenue
Changes in deferred revenue are as follows:
June 30,
(In millions)20262025
Deferred revenue, beginning of year
$533 $560 
Revenue recognized that was included in the deferred revenue balance at the beginning of the period(292)(288)
Revenue deferred during the period247 257 
Other2 4 
Deferred revenue, end of year
$490 $533 
Transaction Price Allocated to the Remaining Performance Obligations
The aggregate transaction price allocated to remaining performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2026 was $756 million, of which approximately $313 million is expected to be recognized within the next 12 months, with the remainder thereafter. These amounts are comprised of deferred revenue and future royalty revenue from the Company’s license arrangements.

As of June 30, 2026, the combined estimated revenue expected to be recognized in the next twelve months related to performance obligations included in deferred revenue for customer loyalty programs, gift with purchase promotions, purchase with purchase promotions, gift card liabilities and the Marcolin license arrangement related to TOM FORD is $282 million. The remaining balance of deferred revenue as of June 30, 2026 will be recognized as revenue beyond the next twelve months, of which, $198 million relates to the non-refundable upfront payment received as part of the Marcolin licensing arrangement that is being recognized on a straight-line basis over the estimated economic life of the license, which is 20 years ending in fiscal 2043.

As of June 30, 2026, the remaining contractually guaranteed minimum royalty amounts due to the Company in connection with its license arrangements during future periods are as follows:
(In millions)Minimum Remaining Royalties
Fiscal 2027$31 
Fiscal 202833 
Fiscal 202934 
Fiscal 203035 
Fiscal 203135 
Thereafter98 

The royalty revenue associated with TOM FORD is included within the other category and within The Americas region.