The trend: Cracks are beginning to appear in the previously resilient beauty category.
- Coty’s net revenues fell 6% YoY in the quarter ended September 30, due to softening demand for both prestige (down 4% YoY) and its consumer beauty segments (down 9%).
- E.l.f. Beauty also delivered a disappointing quarter. While sales rose 14% to $344 million, that was significantly below the $366 million expected. The company’s full-year guidance was likewise lackluster: Expected revenues of between $1.55 billion and $1.57 billion fell well short of LSEG’s $1.65 billion estimate; adjusted earnings per share are projected to be between $2.80 and $2.85, compared with analysts’ forecast for $3.58.
- Other major beauty players struggled to engage consumers in the Americas: L’Oréal’s North America sales slumped 4.3% YoY on a reported basis, Puig’s Americas sales fell 2.7%, and Estée Lauder’s declined 2%.
The big picture: Overall beauty spending is holding up, but how shoppers choose to spend in the category is shifting.
While prestige demand was the main driver of beauty growth last year, that trend has reversed: Mass beauty sales grew twice as fast as prestige in the first six months of 2025, according to Circana.
- That could reflect consumers’ growing price sensitivities as they grapple with higher costs of living and tariff-linked price hikes.
- More than 80% of beauty consumers have noticed higher prices since President Donald Trump announced his sweeping tariff agenda in April, according to a June EMARKETER survey.