Who’s Winning and Losing in Beauty’s First Half

**Sheena Butler-Young** (0:08)
Hello, and welcome to The Debris from The Business of Fashion, where each week we delve into our most popular BoF professional stories with the correspondents who created them. I'm Senior Correspondent Sheena Butler-Young.
Beauty has been one of fashion and luxury's most reliable growth stories in recent years.
Fragrance boomed post-pandemic, prestige beauty held up better than many categories, and fast-growing consumer brands like Elf seemed to prove that sharp pricing and marketing could keep customers spending. Last year, an almost inevitable slowdown took hold, even as there were signals of optimism in certain pockets. But the latest earnings season suggests beauty's growth is becoming more uneven. So today, we're taking a look at what these earnings can tell us about the state of the beauty category in the first half of the year. Where is growth still coming from? Where are the cracks showing? And what will investors be watching for next? Joining me today to unpack the figures is BoF Senior Beauty Correspondent Daniela Morosini. Daniela, welcome to the debrief.

**Daniela Morosini** (1:07)
Sheena, it's so good to be back with you.

**Sheena Butler-Young** (1:10)
So I want to start with the broader earnings picture.
As I sort of described earlier, beauty has been holding down the fort as this sort of recession, COVID-proof sector of fashion and luxury more broadly. Does that still feel true halfway through 2026 as you look through these earnings reports? Does that feel accurate?

**Daniela Morosini** (1:32)
People are absolutely still spending. If you go into Sephora or Ulta, it's going to be packed out. There's a lot of dynamism. People are, there's so much content on TikTok and Instagram. Beauty is still very, very interesting to a lot of people. I think what has continued to evolve since we've come out of the pandemic is we went through this period where people were so crazy for beauty, that you could charge pretty much whatever you wanted. There's a lot of what we call premiumization. People wanted more, as more, as more, as more. They wanted lots of products, fragrances, skincare, everything. And I think people are just getting a little bit more selective. So I think the desire for newness is still there. I think it still boosts your mood when you buy a new lipstick or a new perfume and you really like it. But I think as folks get a little bit more selective, and also the way that their shopping is changing, people are much more likely to shop on maybe TikTok or Amazon or whatever, so the spend is just getting diluted and moved around a little bit.

**Sheena Butler-Young** (2:27)
So people are taking a different approach to how they spend, what gets their attention. You mentioned platforms being different. Like maybe it's not always Sephora and Ulta, maybe it's TikTok shop, maybe they're initiating a purchase on Instagram. It's a changing picture, but it's not that they're not spending at all.

**Daniela Morosini** (2:45)
Absolutely. I think maybe they're going to be tempted by a Korean beauty brand that they've not tried before, maybe even haven't heard of before, but they've seen it on TikTok shop and it's recommended by somebody that they really follow and they know and they trust. Or maybe they are going to get a dupe. They're like, I don't want to pay the full price for this brand. I'm going to get the M CO beauty or more of a dupe brand version of it. Or maybe they're thinking, I've been buying a lot of skincare. I'm not really seeing the results that I want. Maybe I'm going to actually hold back my spend a little bit and I'm going to go to the dermatologist and I'm going to have a laser or I'm going to have an injectable.
There's just so many more ways to spend one's money when it comes to beauty. I think people are availing themselves of a lot of them.

**Sheena Butler-Young** (3:28)
When you say there's so many more ways to spend one's beauty, there's definitely some themes emerging of what has been the growth engine. Even though people aren't spending the same way, they're still spending and there's categories where the spend is more pronounced. What are some of those growth engines?

**Daniela Morosini** (3:44)
I think what's interesting is what's happened in skincare.
I think that coming out of COVID, skincare was one of the hottest categories. Everybody were all looking at ourselves, our faces on Zoom all day long, and so people start to really think about how their skin looks, and all those dermatologists on TikTok who became influencers overnight.
But then as time has gone on, we've seen that the derm-backed skincare brands or the dermatological brands, the more affordable ones have continued to do really well. Look at CeraVe, for example, a huge brand, L'Oréal-owned, but also La Roche-Posay has done really well. Those brands that hit both result and price are doing super, super well. And I think that's what a lot of the Korean brands do really well. We've done some surveys here at The Business of Fashion in partnership with McKinsey before. And globally, we can say that customers tend to think of Korean-made beauty products as superior to the ones made in their own countries with a few exceptions there. And also a lot of the Korean brands are pretty affordable as well. So I think anything that really results back in affordable skin care is doing great. And so is, as we were saying, it's the lasers and the injectables of it. Like AbbVie, they make Botox, among other injectables and sort of like plastic surgery things. Their stock price is continuing to rally. So that's interesting. The other really big standout from this earnings so far has been haircare. Huge gains for L'Oréal, big gains for Unilever as well.