The company expanded its Profit Recovery and Growth Plan (PRGP), including a restructuring program, to address procurement, supply chain efficiencies, and outsourcing. This expansion is expected to result in $1.2B-$1.6B in restructuring and other charges before taxes.

The company emphasizes targeted consumer reach and locally relevant products, tailoring product assortment and communications by region. This strategy aims to drive consumer engagement, recruitment, and loyalty.

During the fiscal 2025 second quarter, the Company exited Dr.Jart+ from the travel retail channel in Korea, impacting net sales and operating income in the Asia/Pacific region.

The restructuring program aims to reorganize and right-size certain areas, simplify processes, and outsource select services. This is expected to result in a net reduction of 5,800 to 7,000 positions globally.

Management acknowledges challenges in Asia travel retail and North America, implementing strategies to improve performance, including addressing consumer sentiment in China and Korea and focusing on distribution mix in North America.

The company is focused on improving gross margin, lowering the cost base, and reducing overhead expenses. This includes adopting a more competitive approach to procurement and improving efficiencies within the supply chain network.

The company recognizes volatility and uncertainty due to subdued consumer sentiment in China and Korea, pressures from changing selling policies at Korean retailers, and evolving global geopolitical risks.

The company acknowledges that potential tariffs on imports and geopolitical tensions between the United States and other countries could have a material adverse effect on its business.

The Company and its officers are defendants in a securities class action lawsuit, and the Company is also subject to derivative demands. While management believes material losses are unlikely, the outcome of these matters is uncertain.

The company acknowledges increased competitive activity from companies in the skin care, makeup, fragrance, and hair care businesses, which may impact its ability to maintain market share and profitability.

The company highlights its focus on new product innovation and leveraging consumer analytics and insights to create locally-relevant and inclusive products. This strategy is intended to help the company compete effectively for a greater share of consumer spending.

The company is adapting to shifts in consumer preferences regarding how they perceive value and where and how they shop, indicating an awareness of evolving market dynamics.

The company's restructuring program is designed to improve gross margin, lower the cost base, and reduce overhead expenses, while increasing investments in key consumer-facing activities.

The company plans to further improve efficiencies within its supply chain network through a zero-waste approach, aiming to improve demand forecasting and innovation planning to minimize excess inventory and product destruction.

As part of the restructuring program, the company is outsourcing select services to proven global partners, which is expected to improve efficiency and reduce costs.

The company highlights its commitment to new product innovation, including reformulations, regional expansion, repackaging, and sets. New innovation is considered a key driver of sales for a 12-month period.

The company is continually evolving the way it connects with consumers in stores, online, and where they travel, including by expanding its digital and social media presence and the engagement of global and local influencers.

The company is focused on its ability to acquire, develop or implement new information technology, including operational technology and websites, on a timely basis and within its cost estimates.

Beginning in December 2022, the company suspended the repurchase of shares of its Class A Common Stock under its publicly announced program. The company may resume repurchases in the future.

The company is investing in restructuring initiatives, which are expected to result in future cash expenditures funded from cash provided by operations.

In December 2024, the Company repaid the outstanding principal balance of its $500 million, 2.000% Senior Notes at maturity with cash from operations.

There is no discussion of ESG initiatives in the provided 10Q filing.

The company acknowledges challenging retail environments, including ongoing pressure from subdued sentiment from Chinese consumers in mainland China and Hong Kong SAR.

The company continues to monitor the effects of the global macro environment, including the risk of recession, currency volatility, inflationary pressures, supply chain challenges, social and political issues, competitive pressures, legal and regulatory matters, including the imposition of tariffs and sanctions, geopolitical tensions, and global security issues.

The company is mindful of inflationary pressures on its cost base and is monitoring the impact on consumer preferences. They are also implementing strategies to improve supply chain efficiency.