REVENUE RECOGNITION

9 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

The Company’s revenue recognition accounting policies are described in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Accounts Receivable

Accounts receivable, net is stated net of the allowance for doubtful accounts, including credit losses, and customer deductions totaling $27 million and $30 million as of March 31, 2024 and June 30, 2023, 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)	March 31, 2024
Balance at June 30, 2023	$	16
Provision for expected credit losses	(3)
Write-offs, net & other	2
Balance at March 31, 2024	$	15

The remaining balance of the allowance for doubtful accounts and customer deductions of $12 million and $14 million as of March 31, 2024 and June 30, 2023, 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 March 31				Nine Months Ended March 31
(In millions)	2024		2023		2024		2023
Deferred revenue, beginning of period	$	610	$	353	$	572	$	362
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(26)		(50)		(275)		(330)
Revenue deferred (released) during the period	(38)		(15)		255		261
Other	(4)		26		(10)		21
Deferred revenue, end of period	$	542	$	314	$	542	$	314

Transaction Price Allocated to the Remaining Performance Obligations

At March 31, 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 $306 million. The remaining balance of deferred revenue at March 31, 2024 will be recognized beyond the next twelve months, of which $226 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, 2023.