EL · 10-K · 2026A · Full report

Interest Rate Exposure

ESTEE LAUDER COMPANIES INC · 2026-08-19 · Importance 38 · Surprise 46

The Company enters into interest-rate derivatives to manage the impact of rate movements on funded debt, including future debt issuances. A hypothetical 100-basis-point increase in interest rates would have reduced the fair value of those derivatives by approximately $72 million at June 30, 2026, compared with $43 million at June 30, 2025. The filing says the sensitivity estimate is not necessarily indicative of actual results and that underlying transactions are intended to offset derivative losses.

Key facts

• A hypothetical 100 basis point increase in interest rates would have decreased the estimated fair value of ESTEE LAUDER COMPANIES INC's interest rate derivatives by approximately $72 million at June 30, 2026, compared with $43 million at June 30, 2025. source
• Fiscal 2026 interest expense decreased, primarily due to a lower average debt balance and lower average interest rates than the prior year. source
• Fiscal 2026 interest and investment income, net decreased, primarily due to lower average interest rates earned and the unfavorable year-over-year impact of impairments of cost method minority investments. source