Estee Lauder Cos., Inc. - Ordinary Shares - Class A

Strong FY26 turnaround delivered; profitability materially ahead of plan - Organic sales +3% YoY (reported +5%), positive growth in every quarter. - Gross margin +150 bps YoY; operating margin +320 bps YoY to 11.2%. - Diluted EPS +66% YoY to $2.51; Q4 diluted EPS $0.39 (vs. $0.09 prior year). - Cash from operations $1.8B and ending cash $3.5B (capex $457M; free cash flow supported despite higher restructuring payments). - “PRGP / Beauty Reimagined” operational execution: margin expansion and cost discipline enabled cash + operating leverage.

PRGP restructuring largely “done,” but savings ramp and continued efficiency drive the next leg - PRGP approvals concluded June 30; $823M cumulative charges in FY26 (primarily employee-related costs). - Management emphasized ongoing “everyday efficiency” even after approvals complete—embedded in the operating model. - Nonconsumer-facing cost reductions in every quarter (except Q4 due to higher incentive costs tied to stronger-than-expected performance). - Opportunity/surprise: benefits were described as more robust and earlier than originally anticipated, funding continued growth investments.

Outlook: FY27 expectations modest top-line acceleration but stronger profitability - Organic net sales growth guide: 3% to 5% (with stronger 1H than 2H due to more innovation earlier and stronger travel retail shipments vs. the prior year’s lower base). - Operating margin guide: 12.7% to 13.5% (raised vs. prior expectations implied by commentary). - Effective tax rate: ~33%–34%. - Diluted EPS guide: $3.10 to $3.35 on ~368M weighted average shares. - Net cash flows from operations expected $1.3B–$1.4B (down vs FY26 due to higher restructuring payments; most restructuring cash tied to the program expected to be largely behind them after FY27).