EL · 10-K · 2026A · Full report
Impairment Charges
ESTEE LAUDER COMPANIES INC · 2026-08-19 · Importance 66 · Surprise 82 · In source text
Fiscal 2025 included $1.286 billion of goodwill and other intangible asset impairment charges, compared with no such charges in fiscal 2026 in the reconciliation of operating income. The fiscal 2025 charges included $549 million related to TOM FORD Fragrance, $375 million related to Dr.Jart+ Skin Care, and a combined $898 million of other intangible impairments related to TOM FORD and Too Faced in The Americas. Too Faced also had a $13 million goodwill impairment charge in fiscal 2025. The absence of these charges materially benefited fiscal 2026 reported operating results and comparisons across product categories and regions.
Key facts
- Fiscal 2026 reported Skin Care operating income increased $842 million, or over 100%; the prior year included a $375 million Dr.Jart+ other intangible asset impairment charge. source
- Fiscal 2026 reported operating results in The Americas increased $1,029 million, or over 100%, partly reflecting prior-year impairment charges of $898 million for TOM FORD and Too Faced combined and a $13 million Too Faced goodwill impairment charge. source
- Fiscal 2026 reported Fragrance operating results increased $582 million, or over 100%, partly reflecting a prior-year $549 million TOM FORD other intangible asset impairment charge. source
- Fiscal 2026 reported operating income in Asia/Pacific increased $643 million, or over 100%, partly reflecting the prior-year $375 million Dr.Jart+ impairment charge. source
- Fiscal 2026 reported Makeup operating loss decreased $371 million, or 84%, partly reflecting prior-year other intangible asset impairment charges of $295 million for TOM FORD and Too Faced combined and a $13 million Too Faced goodwill impairment charge. source
- Fiscal 2025 reported operating results in Asia/Pacific decreased $330 million, or 65%, reflecting lower net sales, partly offset by lower costs and a $96 million favorable year-over-year impact from Dr.Jart+ goodwill and other intangible asset impairment charges. source
- Fiscal 2026 reported operating margin increased, partly reflecting the prior-year $1,286 million goodwill and other intangible asset impairment charges. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | positive | realized | +6.8% | Fiscal 2026 reported operating results in The Americas increased $1,029 million, or over 100%, partly reflecting prior-year impairment… |
| operating_income | positive | realized | +5.6% | Fiscal 2026 reported Skin Care operating income increased $842 million, or over 100%; the prior year included a $375 million Dr.Jart+… |
| operating_income | positive | realized | +4.3% | Fiscal 2026 reported operating income in Asia/Pacific increased $643 million, or over 100%, partly reflecting the prior-year $375 million… |
| operating_income | positive | realized | +3.9% | Fiscal 2026 reported Fragrance operating results increased $582 million, or over 100%, partly reflecting a prior-year $549 million TOM… |
| operating_income | positive | realized | +2.5% | Fiscal 2026 reported Makeup operating loss decreased $371 million, or 84%, partly reflecting prior-year other intangible asset impairment… |
| margin | positive | realized | — | Fiscal 2026 reported operating margin increased, partly reflecting the prior-year $1,286 million goodwill and other intangible asset… |