REVENUE RECOGNITION

3 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Accounts Receivable

Accounts receivable, net is stated net of the allowance for doubtful accounts, including credit losses, and customer deductions totaling $31 million and $26 million as of September 30, 2024 and June 30, 2024, respectively. Payment terms are short-term in nature and are generally less than one year.

Changes in the allowance for credit losses are as follows:

(In millions)	September 30, 2024
Balance at June 30, 2024	$	14
Provision for expected credit losses	4
Write-offs, net & other	—
Balance at September 30, 2024	$	18

The remaining balance of the allowance for doubtful accounts and customer deductions of $13 million and $12 million as of September 30, 2024 and June 30, 2024, respectively, relates to non-credit losses, which are primarily due to customer deductions.

Deferred Revenue

Changes in deferred revenue during the period are as follows:

	Three Months Ended September 30
(In millions)	2024		2023
Deferred revenue, beginning of period	$	560	$	572
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(148)		(152)
Revenue deferred during the period	154		168
Other	1		(7)
Deferred revenue, end of period	$	567	$	581

Transaction Price Allocated to the Remaining Performance Obligations

At September 30, 2024, the combined estimated revenue expected to be recognized in the next twelve months related to performance obligations for customer loyalty programs, gift with purchase promotions, purchase with purchase promotions, gift card liabilities and the Marcolin license arrangement related to TOM FORD that are unsatisfied (or partially unsatisfied) is $338 million. The remaining balance of deferred revenue at September 30, 2024 will be recognized beyond the next twelve months, of which $220 million relates to the non-refundable upfront payment received as part of the Marcolin licensing arrangement that is being recognized on a straight-line basis over the estimated economic life of the license, which is 20 years.

Royalty Revenue – License Arrangements

The Company’s contractually guaranteed minimum royalty amounts due during future periods under its existing license arrangements is disclosed in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.