Judge Approves Estée Lauder’s $210 Million Investor Settlement

A federal judge approved Estée Lauder’s $210 million investor settlement on Oct. 14, resolving investors’ allegations that the company overstated growth prospects and did not fully disclose how China’s daigou crackdown affected its business.

Investors brought claims against Estée Lauder and former executives Fabrizio Freda, its former CEO, and Tracey Travis, its former CFO. They alleged that the company’s growth outlook left out the full effect of Chinese authorities’ crackdown on the resale trade. The claims arose as Estée Lauder was recovering from pandemic disruptions.

Daigou involves shoppers buying luxury goods at discounted or duty-free prices and reselling them, often in mainland China. Investors alleged that the trade helped support sales in Hainan. They also said executives cited pandemic disruptions, inventory problems and a slow travel-retail recovery to explain weaker results without fully disclosing the crackdown’s effect.

The court awarded $63 million in attorneys’ fees, or 30% of the settlement, plus about $760,000 in expenses. Lawyers had sought 32%. The lower share left $4.2 million more in the settlement fund for investors.

The Macomb County Employees’ Retirement System, Macomb County Retiree Health Care Fund and Wayne County Employees’ Retirement System led the case. Discovery produced about 124,000 documents before the settlement. On March 31, 2025, Judge Arun Subramanian allowed the main claims to proceed. Estée Lauder has denied wrongdoing.

The company cut its outlook on Nov. 1, 2023, citing government and retailer policies targeting unofficial sales channels as one factor in its downturn. Its shares fell nearly 19% that day, closing at $104.51.

The settlement covers investors who acquired Estée Lauder shares from Feb. 3, 2022, through Feb. 3, 2025. The claim-filing deadline was Aug. 5. The court’s final judgment resolved the settled claims with prejudice.