Estée Lauder reached a settlement of $84 million regarding a securities class action related to gray-market sales in China. The agreement was finalized on April 2, 2026, in the Southern District of New York. Judge Arun Subramanian had previously rejected Estée Lauder’s bid to dismiss the case.
Investors claimed that the company made misleading omissions and forward-looking statements about its gray-market sales practices. This settlement reflects ongoing challenges for Estée Lauder as it navigates regulatory scrutiny and investor concerns.
Key facts about the settlement:
- The settlement amount is $84 million, recorded as a loss contingency by Estée Lauder.
- Judge Arun Subramanian’s decision to reject the dismissal bid occurred last year.
- Investors successfully argued that there were several misleading statements made by the company.
In addition to the legal issues, Estée Lauder plans to cut between 9,000 and 10,000 jobs as part of a broader turnaround plan. This follows an earlier announcement of up to 7,000 job reductions. The company aims to improve its financial results amidst these challenges.
Estée Lauder reported a 5% growth in sales during the third quarter, totaling $3.7 billion. Organic net sales increased by 2% for the three months ending March 31, 2026. However, the ongoing conflict in the Middle East negatively impacted sales growth by approximately one percentage point.
Fragrance sales have shown significant growth, rising 13% to $628 million in the same period. Stéphane de La Faverie expressed optimism about the company’s future, stating that “2026 is promising to be the pivotal year we intended.” He also noted plans to accelerate organic sales growth and improve adjusted operating margins.
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