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Insight of the Day: US Beauty Industry Sales Slow but Continue to Grow in Q1, Circana Reports

Overall: Growth Slowing, But Still Positive

  • Prestige beauty sales grew 9% year-over-year, while mass market sales grew 2%. This indicates a slowdown, but the industry is still expanding.

  • Stabilization is expected after strong performance in the past two years.

Category Highlights

  • Fragrance: Fastest growing prestige category (+13%). Gift sets are outpacing traditional products, and travel-size sets are seeing significant growth.

  • Luxury fragrance is also outperforming the rest of the market.

  • Interestingly, families with children are driving spending in this category.

  • Skincare:  Grew 10% in prestige and was the fastest-growing category in the mass market.

  • Body spray and face serum saw notable growth, driven by new clinical brand launches.

  • Makeup:  Softest performer in both markets, but remains the largest prestige category.

  • Lip products did well (+26%), specifically tinted lip balms and oils.

  • Hair: Prestige saw continued double-digit growth.

  • Hair wellness remains a key focus, with strong sales in thinning/loss products, oils, scalp care, and heat protectants.

  • Celebrity brands grew the fastest (+64%) within the hair category.

Circana's Interpretation

  • Larissa Jensen highlights that the slowdown is natural after two years of exceptional growth, but the industry remains strong with over $600 million in additional sales in Q1.

  • Excitement surrounding new brands, launches, and younger consumers will continue to drive the market.

Additional Points to Consider

  • Gen Alpha effect:  The influence of younger family members on prestige fragrance spending is an interesting trend to watch.

  • Mass vs. Prestige:  The skincare category's dominance in the mass market indicates consumer desire for effective products, even at lower price points.

  • Innovation:  Continued success will hinge on new product launches that meet evolving consumer needs (e.g., focus on hair wellness).

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