America wants to be beautiful. Spending on prestige cosmetics -- the skincare, makeup and fragrances sold in department stores and other higher-end channels -- gained 16% in the first quarter of the year, according to the latest report from Circana.
Beauty products sold in mass channels also increased, rising 10% compared to the same period last year.
The gains follow strong sales through much of 2022.
Circana, formerly the NPD Group and IRI, reports the most significant gains in makeup, which had languished in the early pandemic years. It’s up 24% in the quarter in prestige channels and 15% in mass. And sales of prestige lip products soared 43%.
Fragrance was the second-fastest growing in the quarter, rising 15% in prestige and 13% in mass. Prestige skin and hair products rose 11%, while those categories climbed 10% and 7% in mass-merchandise stores.
“Following a stellar 2022, the beauty industry continues to bask in the glow of growing sales,” writes Larissa Jensen, Circana’s beauty industry adviser, in the report. “The first quarter results reinforce beauty’s resiliency and unfaltering position as an indispensable category.”
She also notes that the lines between mass and class continue to blur.
Important prestige trends include the ongoing popularity of gift sets and mini sizes in higher-end fragrances, gaining 31% in the quarter. Circana says 40% of all unit sales went to scents under 1 ounce. That appeals to those looking to take their perfume along but also offers a luxury scent at a lower price.
Haircare is still the category where mass is strongest, with those brands accounting for 75% of sales. But sales of prestige products, particularly those targeting specific problems like heat damage, thinning or scalp issues, are gaining fast. Those products also registered the largest price increase, with the average prestige hair product now costing $30.
In skin care, clinical brands outperformed natural brands in the quarter. But that trend could change, especially considering LOréal's recent $2.52 billion acquisition of Aesop, a luxury brand beloved for its plant-based products sold in understated apothecary-type bottles.
It’s the cosmetic giant’s largest splurge ever.
The Australian-founded Aesop was scooped up in 2017 by Natura, the Brazilian beauty company that also owns Avon and the Body Shop.
The sale enlarges L’Oréal's already-vast skincare portfolio, which includes brands like Kiehl’s, Lancôme, LaRoche-Posay, CeraVe and SkinCeuticals.
L’Oréal says the acquisition will boost its reach in China and travel retail. Aesop currently has 400 stores around the world.