UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 8.01 Other Events
The Estée Lauder Companies Inc. (the “Company”) is providing the following disclosure that the Company included in a preliminary prospectus supplement filed on April 7, 2020 in connection with an offering of debt securities. The information in this report on Form 8-K should be read in conjunction with the risk factors described in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, including the risk factor entitled “A general economic downturn, or sudden disruption in business conditions may affect consumer purchases of discretionary items and/or the financial strength of our customers that are retailers, which could adversely affect our financial results,” as well as the information under the “Cautionary Note Regarding Forward-Looking Information” in the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2019.
As the global spread of COVID-19 rapidly continues, the Company remains first and foremost focused on the health and safety of its employees, beauty advisors and consumers. To help contain the spread of COVID-19, the Company has modified its business practices, including in response to legislation, executive orders and guidance from government entities and healthcare authorities (collectively, “COVID-19 Directives”). These directives include the temporary closing of businesses deemed “non-essential,” travel bans and restrictions, social distancing and quarantines.
As a result of COVID-19 Directives, most retail stores in The Americas and Europe, the Middle East & Africa, whether operated by the Company or its customers, are now closed, and air travel continues to be largely curtailed, primarily impacting the Company’s travel retail business. However, in recent weeks, many retail stores have been reopening in Asia/Pacific, and sales growth of the Company’s products online have accelerated globally.
At this time, a majority of the Company’s facilities continue to manufacture and distribute products globally, albeit in a reduced capacity in light of the challenging environment. COVID-19 has also impacted some of the Company’s suppliers, including third-party manufacturers, logistics providers and other vendors. The Company is actively monitoring its supply chain and implementing mitigation plans. The Company is prioritizing areas of growth and cash generation among its geographic regions, product categories, brands and channels of distribution. The Company has implemented strict cost controls to help mitigate the loss of sales and to conserve cash while continuing to support employees. As the Company continues to actively monitor the situation, it may take further actions that affect its operations.
To enhance its financial flexibility and liquidity, the Company recently borrowed $1.3 billion under its $1.5 billion revolving credit facility, and it had approximately $200 million of commercial paper outstanding as of March 31, 2020. Beginning in early February 2020, the Company also suspended its repurchase of shares of the Company’s Class A Common Stock. The Company believes it has sufficient liquidity and flexibility to operate during the disruptions caused by COVID-19.
However, due to the uncertainty of the duration and severity of COVID-19 and the speed with which this pandemic is developing and
impacting the Company and its consumers, customers and suppliers, the Company is not able to reasonably estimate the extent of
the impact on the Company’s financial condition or results of operations at this time. There is no certainty that measures
the Company takes will be sufficient to mitigate the risks posed by COVID-19.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE ESTÉE LAUDER COMPANIES INC. | ||
| Date: April 7, 2020 | By: | /s/ Tracey T. Travis |
| Tracey T. Travis | ||
| Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | ||
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Cover |
Apr. 07, 2020 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Apr. 07, 2020 |
| Entity File Number | 1-14064 |
| Entity Registrant Name | ESTEE LAUDER COMPANIES INC |
| Entity Central Index Key | 0001001250 |
| Entity Tax Identification Number | 11-2408943 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 767 Fifth Avenue |
| Entity Address, City or Town | New York |
| Entity Address, State or Province | NY |
| Entity Address, Postal Zip Code | 10153 |
| City Area Code | 212 |
| Local Phone Number | 572-4200 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Class A Common Stock, $.01 par value |
| Trading Symbol | EL |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |