• by Sarah Mahoney  @mahoney_sarah, August 1, 2022

So far, the beauty business is living up to its reputation as recession-resistant, with L'Oréal posting exceptional sales results. Remarkably, it even scored gains in China, despite the pandemic-linked lockdowns punishing so many other companies.

On a constant currency basis, sales in the first half shot up 13.5%, with all zones and product categories notching double-digit gains.

"After two years of the pandemic, consumers confirm their desire to socialize and indulge themselves with innovative and superior beauty products, which in turn is fueling the growth of the beauty market," said Nicolas Hieronimus, L'Oréal's CEO, in its release. "L'Oréal grew twice as fast as the market and has strengthened its position as the world's No.1 beauty company."

And at a moment when many companies are reducing their sales forecasts, the Paris-based company says it is "confident in our ability to outperform in 2022 and achieve another year of growth in sales and profits."

Too much cockiness in the face of economic uncertainty? Maybe not, according to NPD Group, which just released an analysis proving there's nothing fragile about consumers' commitment to beauty.

Among the 14 discretionary retail spending industries the market research company tracks, including tech, toys, home and clothing, beauty is the only category gaining in unit sales. And its gaining in double-digits, writes Larissa Jensen, NPD's vice president and industry advisor for beauty.

"When consumer sentiment is low, they look for ways to feel better," she writes. "For a beauty enthusiast, nothing perks the spirit faster than a brand-new lipstick."

She says the old "lipstick index" logic, which has been kicking around for decades, is holding up now, too. "When NPD overlayed lipstick sales volume over consumer sentiment trends from our partners at CivicScience, we found an opposite correlation, indicating that consumers are treating themselves with beauty products."

The trend is bigger than lipstick, encompassing fragrance and just about anything that feels like a healthy and easy feel-good splurge.

Still, Jensen’s not sure how long that splurge effect will last. "While the beauty industry might be recession-proof today, there are no guarantees about tomorrow," she writes. "Succeeding in this volatile environment will require brands and retailers to keep close tabs on changing consumer behaviors and have the flexibility to respond to them."