In our Holiday 2023 & Beyond Outlook we had called out prestige cosmetics, spirits, and grocery as the likely winning categories for the holiday season. With Estée Lauder once again reporting weak business results, we decided to once again look at how the retailers that service this consumer category have fared recently. As can be seen in the traffic for Sephora and Ulta Beauty (below), consumer interest continues to be robust. L'Oréal’s results--where U.S. revenue growth was +17% compared to Estée Lauder's growth in the low-single-digits. Fragrance was the strongest category for both brands (see our prior comments on that product category). As such, we think Estee's issues are company-specific and not emblematic of the category.
