v3.26.1
INCOME TAXES
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
(Loss) income before income taxes in fiscal 2026, 2025 and 2024 is presented below:
Year Ended June 30,
202620252024
United States$(531.3)$(696.0)$(591.1)
Foreign(78.9)351.2 795.6 
Total$(610.2)$(344.8)$204.5 
The components of the Company’s total provision (benefit) for income taxes during fiscal 2026, 2025 and 2024 are presented below:
Year Ended June 30,
202620252024
(Benefit) provision for income taxes:
Current:
Federal$13.5 $(7.8)$1.2 
State and local3.8 3.4 (3.5)
Foreign117.6 97.3 107.2 
Total134.9 92.9 104.9 
Deferred:
Federal5.8 (20.2)(36.7)
State and local(8.1)(16.9)(16.7)
Foreign(152.6)(50.4)43.6 
Total(154.9)(87.5)(9.8)
(Benefit) provision for income taxes$(20.0)$5.4 $95.1 
The reconciliation of the U.S. Federal statutory tax rate to the Company’s effective income tax rate during fiscal 2026 is presented below:
AmountTax Rate
U.S. Federal statutory tax rate$(128.1)21.0 %
State and local income tax, net of federal (national) income tax effect (a)$(3.4)0.6 %
Foreign tax effects
Brazil
Foreign rate differential$9.1 (1.5)%
State incentive credits$(17.0)2.8 %
Other$(1.1)0.2 %
Switzerland
Participation exemption on Wella sale$(34.0)5.6 %
Other$9.9 (1.6)%
Netherlands
Foreign rate differential$(19.3)3.2 %
Nondeductible impairment$31.6 (5.2)%
Other$13.7 (2.2)%
Germany
Other$(11.4)1.9 %
Other Foreign Jurisdictions$15.0 (2.5)%
Effect of changes in tax laws or rates enacted in the current period$— — %
Effect of cross-border tax laws (b)$104.3 (17.1)%
Tax credits$— — %
Changes in valuation allowances$5.7 (0.9)%
Nontaxable or nondeductible items
Nondeductible impairment$20.0 (3.3)%
Other$8.9 (1.5)%
Changes in unrecognized tax benefits$(12.5)2.0 %
Other$(11.4)1.9 %
Total$(20.0)3.3 %
(a)State taxes in California, Illinois, New Jersey, Florida, North Carolina, Texas, Maryland and Pennsylvania make up the majority (greater than 50%) of the tax effect in this category.
(b)Includes the impact of any tax credits
The reconciliation of the U.S. Federal statutory tax rate to the Company’s effective income tax rate during fiscal 2025 and 2024 is presented below:
Year Ended June 30,
20252024
Income (loss) before income taxes$(344.8)$204.5 
Provision for income taxes at statutory rate$(72.4)$42.9 
State and local taxes—net of federal benefit(10.6)(15.9)
Foreign tax differentials(0.1)20.9 
Change in valuation allowances97.8 38.9 
Change in unrecognized tax benefit34.3 (15.5)
Permanent differences—net43.9 7.6 
Non-deductible executive stock compensation11.0 19.7 
Currency Loss8.3 (22.5)
Russia exit uncertain tax position release(10.0)— 
Principal relocation revaluation— 27.6 
Nondeductible Interest Expense6.8 12.1 
Swiss Tax Credits-net of valuation allowance(2.4)(37.8)
Tax Rate Change Deferred Tax Liability Revaluation— 24.2 
Brazil tax recovery benefit(78.5)— 
Swiss Impairment(31.2)— 
Other8.5 (7.1)
Provision for income taxes$5.4 $95.1 
Effective income tax rate(1.6)%46.5 %

The 3.3% effective tax rate in fiscal 2026 results from reporting losses before income taxes and a benefit for income taxes. The unfavorable impacts to the rate were primarily driven by the following items:
•a 17.1% unfavorable impact to the effective tax rate due to the effect of U.S cross border tax law items;
•a 8.5% unfavorable impact to the effective tax rate due to goodwill impairment that is not tax deductible.
These unfavorable rate drivers were partially offset by the following favorable rate drivers:
•a 2.8% favorable impact to the effective tax rate due to state incentive credits in Brazil;
•a 5.6% favorable impact due to the Company’s sale of its remaining interest in Wella.
The (1.6)% effective tax rate in fiscal 2025 results from reporting losses before income taxes and a provision for income taxes. The unfavorable impacts to the rate were primarily driven by the following items:
•a 28.4% unfavorable impact to the effective tax rate due to an increase in valuation allowances recorded on interest expense carryforwards and the capital loss realized as a result of the sale of its investment in KKW Holdings during the period, compared with a 19.0% unfavorable impact in the prior period;
•a 9.9% unfavorable impact to the effective tax rate due to changes in unrecognized tax benefits primarily related to new reserves for benefits realized as a result of a tax recovery benefit in Brazil, compared to a favorable impact of 7.6% in the prior period;
•a 12.7% unfavorable impact to the effective tax rate as a result of various permanent differences including US foreign income inclusions.
These unfavorable rate drivers were partially offset by the following favorable rate drivers:
•a 22.8% favorable impact to the effective tax rate due to benefits realized as a result of a tax recovery benefit in Brazil (a majority of which are offset by the unrecognized tax benefit impact described above);
•a 9.0% favorable impact due to a tax deductible impairment in Switzerland on its investment in subsidiaries.

Significant components of deferred income tax assets and liabilities as of June 30, 2026 and 2025 are presented below:
June 30,
2026		June 30,
2025
Deferred income tax assets:
Inventories$8.7 $4.4 
Accruals and allowances91.0 64.1 
Sales returns16.1 16.3 
Share-based compensation5.1 4.0 
Employee benefits36.5 46.5 
Net operating loss carry forwards and tax credits442.3 376.3 
Capital loss carry forwards29.9 29.8 
Interest expense limitation carry forward210.2 173.5 
Lease liability21.0 16.1 
Principal relocation lease 308.8 347.6 
Property, plant and equipment2.5 42.0 
Derivative Instruments26.6 70.5 
Investment in partnerships13.9 — 
Other77.2 63.0 
Less: valuation allowances(287.7)(274.1)
Net deferred income tax assets1,002.1 980.0 
Deferred income tax liabilities:
Intangible assets675.6 753.6 
Licensing rights29.9 29.9 
Right of use asset18.5 22.8 
Investment in partnerships— 48.3 
Other24.9 31.7 
Deferred income tax liabilities748.9 886.3 
Net deferred income tax (liability) asset$253.2 $93.7 
The expirations of tax loss carry forwards, amounting to $889.2 as of June 30, 2026, in each of the fiscal years ending June 30, are presented below:
Fiscal Year Ending June 30,United StatesWestern EuropeRest of WorldTotal
2027$— $— $9.8 $9.8 
2028— — 20.1 20.1 
2029— — 23.0 23.0 
2030— — 42.9 42.9 
2031 and thereafter— 424.8 368.6 793.4 
Total$— $424.8 $464.4 $889.2 
The total valuation allowances recorded are $287.7 and $274.1 as of June 30, 2026 and 2025, respectively. In fiscal 2026, the change in the valuation allowance was primarily due to an increase in valuation allowance on U.S. interest expense limitation carryforwards and certain foreign net operating losses.
A reconciliation of the beginning and ending amount of UTBs is presented below:
Year Ended June 30,
202620252024
UTBs—July 1$240.8 $215.3 $235.5 
Additions based on tax positions related to the current year1.5 1.2 1.3 
Additions for tax positions of prior years4.2 50.8 15.8 
Reductions for tax positions of prior years(11.0)(6.0)(19.0)
Settlements(0.3)(0.3)(1.2)
Lapses in statutes of limitations(6.6)(33.1)(17.8)
Foreign currency translation1.9 12.9 0.7 
UTBs—June 30$230.5 $240.8 $215.3 
As of June 30, 2026, the Company had $230.5 of UTBs of which $153.6 represents the amount that, if recognized, would impact the effective income tax rate in future periods. As of June 30, 2026 and 2025, the liability associated with UTBs, including accrued interest and penalties, is $189.9 and $194.3, respectively, which is recorded in Income and other taxes payable and Other non-current liabilities in the Consolidated Balance Sheets.
The Company accrued interest of $(0.5), $7.1 and $(2.4), respectively, in fiscal 2026, 2025 and 2024. The Company accrued penalties of $0.2 in fiscal 2026 and immaterial penalties in fiscal 2025, and no penalties in fiscal 2024. The total gross accrued interest and penalties recorded in the Other noncurrent liabilities in the Consolidated Balance Sheets related to UTBs as of June 30, 2026 and 2025 is $36.0 and $36.6, respectively.
The Company is present in approximately 40 tax jurisdictions, and at any point in time is subject to several audits at various stages of completion. As a result, the Company evaluates tax positions and establishes liabilities for UTBs that may be challenged by local authorities and may not be fully sustained, despite a belief that the underlying tax positions are fully supportable. UTBs are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and closing of statute of limitations. Such adjustments are reflected in the provision for income taxes as appropriate. In fiscal 2026 and 2025, the Company recognized a tax benefit of $6.9 and $33.4 respectively associated with the settlement of tax audits in multiple jurisdictions and the expiration of foreign and state statutes of limitation. The Company has open tax years ranging from 2009 and forward. It is possible the ongoing audits by tax authorities may result in increases or decreases to the balance of UTBs. Since it is common practice to extend audits beyond the statute of limitations, the Company is unable to predict the timing or conclusion of these audits and, accordingly, the Company is unable to estimate the amount of changes to the balance of UTBs that are reasonably possible at this time. However, the Company believes it has adequately provided for its UTBs for all open tax years in each tax jurisdiction.
A summary of income taxes paid in 2026, net of refunds received, is as follows:
Amount
U.S. Federal$22.5 
U.S. State and Local (a)
4.2 
Foreign
Spain12.2 
France9.3 
Germany5.9 
Mexico6.8 
Netherlands9.4 
Singapore5.3 
United Arab Emirates5.4 
Other20.7 
Total$101.7 
(a) No single state or local jurisdiction accounts for more than 5% of the total income taxes paid.