ESTEE LAUDER COMPANIES INCEL

ESTEE LAUDER COMPANIES INC Earnings Per Share Disclosure

10-KFiled Aug 20, 20252 min read
NET (LOSS) EARNINGS ATTRIBUTABLE TO THE ESTÉE LAUDER COMPANIES INC. PER COMMON SHARE
Net (loss) earnings attributable to The Estée Lauder Companies Inc. per common share (“basic EPS”) is computed by dividing net (loss) earnings attributable to The Estée Lauder Companies Inc. by the weighted-average number of common shares outstanding and shares underlying PSUs and RSUs where the vesting conditions have been met. Net (loss) earnings attributable to The Estée Lauder Companies Inc. per common share assuming dilution (“diluted EPS”) is computed by reflecting potential dilution from stock-based awards using the treasury stock method. For the year ended June 30, 2025, the effects of potentially dilutive stock options, PSUs and RSUs were excluded from the computation of diluted EPS as they were anti-dilutive due to the net loss incurred during the period.
A reconciliation between the numerator and denominator of the basic and diluted EPS computations is as follows:
 
Year Ended June 30,
(In millions, except per share data)202520242023
Numerator:
Net (loss) earnings attributable to The Estée Lauder Companies Inc.
$(1,133)$390 $1,006 
Denominator:
Weighted-average common shares outstanding – Basic360.1 359.0 357.9 
Effect of dilutive stock options— 0.9 2.3 
Effect of PSUs— 0.2 0.1 
Effect of RSUs— 0.7 0.6 
Weighted-average common shares outstanding – Diluted360.1 360.8 360.9 
Net (loss) earnings attributable to The Estée Lauder Companies Inc. per common share:
Basic$(3.15)$1.09 $2.81 
Diluted$(3.15)$1.08 $2.79 

The shares of Class A Common Stock underlying stock options, RSUs and PSUs that were excluded in the computation of diluted EPS because their inclusion would be anti-dilutive were as follows:
Year Ended June 30,
(In millions)202520242023
Stock options8.5 5.9 2.4 
RSUs and PSUs1.7 0.4 0.1 
As of June 30, 2025, 2024 and 2023, 0.6 million shares, 0.4 million shares and 0.4 million shares, respectively, of Class A Common Stock underlying PSUs have been excluded from the computation of diluted EPS as the number of shares ultimately issued is contingent on the achievement of applicable performance targets of the Company, as discussed in Note 19 – Stock Programs.

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

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