The news: The latest earnings reports from Estée Lauder, Puig, and L’Oréal suggest that the lipstick effect is still going strong, as consumers continue to indulge in beauty purchases.

• Estée Lauder’s net sales rose 6.7% YoY in fiscal Q1 2027, ahead of expectations, with strong growth across most categories and every geographic region.
• Charlotte Tilbury owner Puig’s like-for-like revenues increased 5.6% YoY in Q3 2026, also beating analyst estimates.
• L’Oréal’s like-for-like sales jumped 7.2% in Q3, better than expected, with growth across all business divisions.

What it means: Beauty companies’ strong showing points to resilient underlying demand. Beauty consistently ranks as one of the last categories consumers would cut amid financial strain, reflecting its growing role in wellness routines.

At the same time, Estée Lauder, L’Oréal, and Puig are each benefiting from more timely trends—namely, strong interest in fragrance.

• Fragrance was by far the fastest-growing category at Estée Lauder, rising 19% YoY on a reported basis, as shoppers snapped up products from Tom Ford, Le Labo, and Kilian Paris.
• Puig sees fragrance as central to its ambition of becoming one of the four largest global premium beauty companies and surpassing €8 billion ($9 billion) by 2032, driven by strong demand in all geographies.
• L’Oréal singled out fragrances as the “primary growth engine” for its luxury business, with demand for men’s products and scents from brands such as Armani, Prada, and Yves Saint Laurent.

Implications for retail: The beauty category remains one of the most resilient in retail, thanks to both short-term trends—like the current interest in fragrance—and longer-term shifts such as the growing convergence of beauty, health, and wellness.

But that strength doesn’t extend equally to all brands. Consumers are becoming more savvy about what they buy, and not purely because of budget constraints. The wealth of beauty-related content on TikTok and other channels means beauty shoppers are much more knowledgeable, and consequently more inclined to make a purchase based on a product’s ingredient list—and how effective it is—than a brand name. That is increasing the pressure on beauty companies to substantiate their marketing claims or risk losing business to brands like e.l.f. that offer lower-priced dupe versions.

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