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. Upon completion of this plan, the Company expects to have improved its gross margin and expense base to drive greater operating leverage for the future.

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, which was about 3-5% of its positions including temporary and part-time employees as of June 30, 2023. 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. The Company 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.

The expansion of the overall PRGP is focused on three key areas. First, the Company plans to adopt a more competitive approach to procurement, a key pillar of savings, by further consolidating spending and strategically re-evaluating key supplier relationships. Second, the Company plans to further improve efficiencies within its supply chain network through a zero-waste approach, aiming to improve demand forecasting and innovation planning to minimize excess inventory and product destruction. Third, the Company is outsourcing select services to proven global partners.

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

In connection with the Restructuring Program, as of June 30, 2025 the Company estimates a net reduction in the range of approximately 5,800 to 7,000 positions globally, which is about 9-11% of its positions including temporary and part-time employees as of June 30, 2023. This net reduction takes into account the elimination of positions after retraining and redeployment of certain employees in select areas.

The Company expects that the Restructuring Program will result in restructuring and other charges totaling between $1,200 million and $1,600 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, 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
Cumulative charges approved through June 30, 2025	4		10		552		114		680
July 1, 2025 - August 13, 2025	—		—		31		36		67
Cumulative charges approved through August 13, 2025	$	4	$	10	$	583	$	150	$	747


(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
Cumulative charges approved through June 30, 2025	512		14		3		23		552
July 1, 2025 - August 13, 2025	27		4		—		—		31
Cumulative charges approved through August 13, 2025	$	539	$	18	$	3	$	23	$	583

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

•Enabling Function Re-Invention – The Company approved initiatives to reorganize and right-size various corporate functions. These activities will primarily result in employee severance through a net reduction in workforce.

•Future of Brand-led Model – The Company approved initiatives to 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. 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, as well as exit unprofitable brands from specific markets and distribution channels. These activities will result in employee severance through a net reduction in workforce, inventory write-offs, as well as costs associated with sales returns.

•Digital Organization Transformation – The Company approved initiatives to begin to reorganize and right-size its technology functions, which support its internal enterprise and commercial capabilities, to create a leaner, faster, more effective and more agile technology organization. These activities will primarily result in employee severance through a net reduction in workforce.

Once the relevant accounting criteria have been met, the Company expects to record cumulative restructuring and other charges of approximately $747 million (before tax) in connection with these initiatives, which other than the non-cash charges, 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 will be recorded as a component of Net sales and/or Cost of sales when estimable and reasonably assured.

•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


	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
Cumulative charges through June 30, 2025	$	—	$	9	$	524	$	77	$	610


(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
Cumulative charges through June 30, 2025	$	503	$	13	$	3	$	5	$	524


(In millions)	Employee- Related Costs		Asset- Related Costs		Contract Terminations		Other Exit Costs		Total
Charges	$	90	$	2	$	—	$	—	$	92
Cash payments	—		—		—		—		—
Non-Cash asset write-offs	—		(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 write-offs	—		(11)		—		—		(11)
Translation and other adjustments	(6)		—		—		—		(6)
Balance at June 30, 2025	$	369	$	—	$	2	$	—	$	371

Accrued restructuring charges at June 30, 2025 relating to the Restructuring Program are expected to result in cash expenditures funded from cash provided by operations of approximately $274 million, $86 million, and $11 million for fiscal 2026, 2027, and 2028, 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.

On August 20, 2020, the Company announced a two-year restructuring program, Post-COVID Business Acceleration Program (the “PCBA Program”), designed to realign the Company's business to address the dramatic shifts to its distribution landscape and consumer behaviors in the wake of the COVID-19 pandemic.

The PCBA Program’s main areas of focus included accelerating the shift to online with the realignment of the Company’s distribution network reflecting freestanding store and certain department store closures, with a focus on North America and Europe, the Middle East & Africa; the reduction in brick-and-mortar point of sale employees and related support staff; and the redesign of the Company’s regional branded marketing organizations, plus select opportunities in global brands and functions.

As of June 30, 2025, the net reduction of positions over the duration of the PCBA Program was approximately 2,800 positions globally. This reduction included the elimination of some positions, retraining and redeployment of certain employees and investment in new positions in key areas. As of June 30, 2025, over the duration of the PCBA program, the Company closed approximately 16% of its freestanding stores.

The Company approved specific initiatives under the PCBA Program through fiscal 2022 and has substantially completed those initiatives. Inclusive of approvals from inception through June 30, 2022, the PCBA Program resulted in related restructuring and other charges totaling approximately $426 million, before taxes, through June 30, 2025.

•Optimize Digital Organization and Other Go-To-Market Organizations – The Company approved initiatives to enhance its go-to-market capabilities and shift more resources to support online growth. These initiatives resulted in a net reduction of the workforce, which includes position eliminations, the re-leveling of certain positions and an investment in new capabilities.

•Optimize Select Marketing, Brand and Global Functions – The Company reduced its corporate and certain of its brand office footprints, by restructuring where and how its employees work and collaborate. In addition, the Company approved initiatives to reduce organizational complexity and leverage scale across various Global functions. These actions resulted in asset write-offs, employee severance, lease termination fees, and consulting and other professional services for the design and implementation of the future structures and processes.

•Optimize Distribution Network – To help restore profitability to pre-COVID-19 pandemic levels in certain areas of its distribution network and, as part of a broader initiative to be completed in phases, the Company approved initiatives to close a number of underperforming freestanding stores, counters and other retail locations, mainly in certain affiliates across all geographic regions, including the Company's travel retail network. These closures reflected changing consumer behaviors including higher demand for online and omnichannel capabilities. These activities resulted in product returns, termination of contracts, a net reduction in workforce, and inventory and other asset write-offs.

•Exit of the Global Distribution of BECCA Products – In reviewing the Company's brand portfolio to improve efficiency and the sustainability of long-term investments, the decision was made to exit the global distribution of BECCA products due to its limited distribution, the ongoing decline in product demand and the challenging environment caused by the COVID-19 pandemic. These activities resulted in charges for the impairment of goodwill and other intangible assets, product returns, termination of contracts, and employee severance.

•Exit of Certain Designer Fragrance Licenses – In reviewing the Company’s brand portfolio of fragrances and to focus on investing its resources on alternative opportunities for long-term growth and value creation globally, the Company announced that it would not renew its license agreements for the Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna product lines when their respective terms expired in June 2023. The Company negotiated early termination agreements with each of the licensors effective June 30, 2022. These actions resulted in asset write-offs, including charges for the impairment of goodwill, employee-related costs, and consulting and legal fees.

•Brand Transformation – In reviewing the Company’s brand portfolio to accelerate growth within the makeup product category and to support long-term investments, the decision was made to strategically reposition Smashbox to capitalize on changing consumer preferences and to mitigate the impact caused by the COVID-19 pandemic on the brand. These actions primarily resulted in product returns and inventory write-offs.

The Company records approved charges associated with restructuring and other activities once the relevant accounting criteria have been met. Total cumulative charges recorded associated with restructuring and other activities for the PCBA Program were:


	Sales Returns (included in Net Sales)		Cost of Sales		Operating Expenses				Total
(In millions)					Restructuring Charges		Other Charges
Total Charges (Adjustments)
Fiscal 2021	$	14	$	2	$	201	$	4	$	221
Fiscal 2022	4		5		109		9		127
Fiscal 2023	27		3		35		12		77
Fiscal 2024	1		1		1		7		10
Fiscal 2025	(3)		(1)		(6)		1		(9)
Cumulative charges through June 30, 2025	$	43	$	10	$	340	$	33	$	426


(In millions)	Employee- Related Costs		Asset- Related Costs(1)		Contract Terminations		Other Exit Costs		Total
Restructuring Charges (Adjustments)
Fiscal 2021	$	119	$	75	$	6	$	1	$	201
Fiscal 2022	84		11		13		1		109
Fiscal 2023	3		31		(2)		3		35
Fiscal 2024	(4)		4		1		—		1
Fiscal 2025	(6)		1		(1)		—		(6)
Cumulative charges through June 30, 2025	$	196	$	122	$	17	$	5	$	340


(In millions)	Employee- Related Costs		Asset- Related Costs		Contract Terminations		Other Exit Costs		Total
Charges	$	119	$	75	$	6	$	1	$	201
Cash payments	(18)		—		(6)		(1)		(25)
Non-cash asset write-offs	—		(75)		—		—		(75)

Balance at June 30, 2021	101		—		—		—		101

Charges	84		11		13		1		109
Cash payments	(52)		—		(13)		1		(64)
Non-cash asset write-offs	—		(11)						(11)
Translation and other adjustments	(8)		—		—		(2)		(10)
Balance at June 30, 2022	125		—		—		—		125

Charges	3		31		(2)		3		35
Cash payments	(40)		—		(1)		(3)		(44)
Non-cash asset write-offs	—		(31)		—		—		(31)
Translation and other adjustments	(7)		—		4		—		(3)
Balance at June 30, 2023	81		—		1		—		82

Charges	(4)		4		1		—		1
Cash payments	(49)		—		(1)		—		(50)
Non-cash asset write-offs	—		(4)		—		—		(4)
Translation and other adjustments	—		—		(1)		—		(1)
Balance at June 30, 2024	28		—		—		—		28

Charges	(6)		1		(1)		—		(6)
Cash payments	(17)		—		—		—		(17)
Non-cash asset write-offs	—		—		—		—		—
Translation and other adjustments	—		(1)		1		—		—
Balance at June 30, 2025	$	5	$	—	$	—	$	—	$	5

Accrued restructuring charges at June 30, 2025 relating to the PCBA Program are expected to result in cash expenditures funded from cash provided by operations of approximately $4 million and $1 million for each of fiscal 2026 and 2027, respectively.