Circana: Beauty Industry’s Growth Moderated in Q1 2024

Sales growth slowed in prestige, while the mass market saw declines in two categories.

Esther-Rose McGregor is the face of Celine’s new fragrance Zouzou.

Beauty’s rapid growth is starting to slow.

Data from Circana showed that beauty overall grew 9 percent and 2 percent in the prestige and mass markets, respectively, in the U.S. in the the first quarter of this year.

“The beauty industry has had unprecedented double-digit growth year-over-year-over-year, especially in prestige,” said Larissa Jensen, Circana’s global beauty industry adviser. “The expectation has always been that at some point, the industry performance would soften. That’s what’s happening.”

That’s consistent with earlier industry rumblings. Last month, Ulta Beauty chief executive officer Dave Kimbell said he was seeing sales moderate in the retail giant’s fiscal 2024.

In prestige, makeup, skin care, hair and fragrance grew a respective 5 percent, 10 percent, 11 percent and 13 percent. In the mass market, makeup declined by 5 percent and fragrance dipped 2 percent; hair and skin care grew 1 percent and 4 percent.

Nevertheless, beauty is still the fastest growing of any of the industries Circana covers, Jensen said.

“The consumer most likely to shop prestige earns over $100,000 annually, and the consumer that is most likely to shop mass earns under $100,000,” Jensen said. “We have seen a change in that cohort’s spend in beauty. The pullback that’s happening is more reflective in that piece of the business.”

Fragrance is growing at both ends of prestige, from ultra prestige to lower prices body sprays, which Circana attributed to Gen Alpha.

Prestige fragrances in higher-income households with children grew at double the rate of households without them. Gift sets swelled 22 percent, while travel sizes and discovery sets jumped at double the rate of traditional sets.

Jensen also added it was the first time a brand comprised of body sprays had broached the top 10 rankings, though declined to specify which brand. On the luxury end, fragrances grew at more than double the rate of prestige overall.

Makeup — though still prestige beauty’s largest category — is slowing down on the upper ends of the business, though both dollar and unit sales are up. Lip performed the strongest, led by balms and oils, posting 26 percent gains from last year.

Artistry brands are the largest and second fastest-growing in that category, Jensen said, following natural wellness brands. “I believe lip balms and lip oils are behind some of that growth,” she continued.

Jensen thinks that skin care could overtake makeup by performance this year. “The expectation was that skin care would take over as the stronger performer,” she said. “It’s happening in both mass and prestige.”

Clinical brands are the largest segment of skin care, Jensen said. Body spray was the category’s top gainer, followed by facial serums.

In hair, growth in prestige came from salon brands, although celebrity brands grew 64 percent. By category, hair thinning products, hair oils, serum, scalp care and heat protectants all grew double digits. On the mass side, “hair is just so big in mass that it’s really hard to move the needle,” Jensen said. “In prestige, it’s driven by salon brands and wellness and scalp care.”

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