Schubert Jonckheer & Kolbe LLP Investigating Estée Lauder Over Alleged Misleading Statements About China Sales
Schubert Jonckheer & Kolbe LLP is advising shareholders of The Estée Lauder Companies Inc. (NYSE: EL) that it has launched an investigation into potential legal claims stemming from allegations that the company misrepresented key aspects of its business operations in China.
Investors who currently hold Estée Lauder shares are encouraged to reach out to the firm for additional information.
The inquiry follows a ruling issued on March 31, 2025, by Judge Arun Subramanian of the U.S. District Court for the Southern District of New York. In that decision, Judge Subramanian rejected Estée Lauder’s attempt to dismiss a securities class action complaint, allowing the case to move forward.
According to the lawsuit, between February 2022 and October 2023, Estée Lauder and its former top executives, then CEO Fabrizio Freda and then CFO Tracey Travis - misled investors about the health and sustainability of the company’s sales in China.
Behind the scenes, a significant portion of Estée Lauder's revenue was allegedly being driven by gray-market sales through so-called daigou resellers.
These unauthorized transactions, which are prohibited under Chinese law, were not fully disclosed to investors at the time.
Judge Subramanian found that the complaint plausibly alleged that Estée Lauder and its executives acted recklessly by issuing misleading statements.
When the company's true exposure to the daigou market came to light in November 2023, and investors learned that a Chinese government crackdown had severely impacted sales, Estée Lauder’s stock price fell sharply, dropping approximately 19%.
If you are a current Estée Lauder investor and would like to discuss your legal rights, you can learn more by visiting classactionlawyers.com/esteelauder.
About Gray-Market Sales
Gray-market sales involve genuine products being sold through unauthorized channels, often outside a company’s official distribution network. While the products themselves are authentic, companies typically have no control over how they are marketed, priced, or handled.
In markets like China, gray-market reselling, such as through "daigou" shoppers, can pose significant legal and financial risks when government crackdowns occur. Investors often view heavy reliance on gray-market sales as a hidden vulnerability if it is not properly disclosed.
Schubert Jonckheer & Kolbe LLP is a San Francisco-based law firm specializing in class action and shareholder litigation. With over 35 years of experience, the firm focuses on securities fraud, consumer protection, privacy breaches, and antitrust violations, securing more than $850 million for clients nationwide.
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