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September 5, 2025
What Does Value Look Like in Beauty?
Circana finds prestige and mass are “converging” in the U.S. beauty space as premium-priced brands pace gains at mass retail, while value-priced prestige brands are outperforming their counterparts at the prestige level.
Circana’s point-of-sale data found beauty sales at U.S. mass merchants increased 4% in the first half to $34.6 billion, outpacing the gain in prestige, which grew 2% to $16 billion. During the first quarter, mass beauty sales exceeded prestige for the first time in years.
“The beauty industry’s latest results are indicative of a consumer who is focused on efficacy and elevated value,” said Larissa Jensen, global beauty industry advisor at Circana, in a statement. “Only 14% of U.S. beauty buyers believe that higher prices indicate a better-quality product.”
Among categories, fragrance continued to lead sales gains, up 17% at mass and 6% gain at prestige. Skincare increased 4% at mass versus a 1% decline at prestige, while makeup sales inched up 1%, outperforming a low single-digits decline at mass.
Ulta Shows Strength in Beauty, While E.l.f. Warns of Potential Tariff Impacts
An encouraging sign for beauty’s moment came from Ulta, which last week reported comparable sales in the second quarter climbed 6.7%, more than double analysts’ expectations, and better-than-expected profitability.
“Engagement with beauty and wellness remains healthy,” said Keisha Steelman, Ulta’s CEO on an analyst call. “The growth of The U.S. beauty category has been fairly stable with low single digit growth in mass and mid-single digit growth in prestige beauty during the second quarter according to Circana. Our insight suggests consumers continue to prudently manage their day-to-day spending and are watchful of pricing trends in response to tariffs. At the same time, beauty enthusiasts tell us that they’re prioritizing their beauty regimens and remain strongly engaged within the category.”
A more cautious take on beauty’s growth potential came from e.l.f. Beauty, which in early August saw its stock get hit after pulling its full-year forecast due to uncertainty over tariffs. About 75% of e.l.f. products are manufactured in China. E.l.f. beat earnings estimates in the first quarter ended June 30 for the seventh time in eight quarters, but said it was monitoring how its female consumer reacts to a $1 price increase enacted August 1 — only its third price increase in its 21-year history.
Tarang Amin, chairman and CEO, said on an analyst call, “With 75% of e.l.f.’s product portfolio remaining under $10 post increase, our community continues to praise our commitment of making the best of beauty accessible to every eye, lip and face.”
Coty, the parent company of Kylie Cosmetics, Sally Hansen, and others, on August 20 said it expects sales in the current quarter to decline 6% to 8% due to weak spending on beauty in the U.S., retailer destocking, fragrance growth slowing after a strong FY24, and pressure in mass cosmetics.
“Our analysis of cosmetics category weakness points to value-seeking behavior, some fatigue with innovation as consumers circle back to basics and less frequent usage, particularly with Gen-Z migrating to fragrances,” finance chief Laurent Mercier said on an analyst call.
Discussion Questions
Do you see a fundamental or more of a temporary shift toward value in the beauty category coming out of tariff-related cost pressures?
What would any changes in pricing perceptions mean for the prestige and mass channels?
Poll
Loading …BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Dave Wendland
Vice President, Strategic RelationsHamacher Resource Group
Mohamed Amer, PhD
CEO & Strategic Board Advisor, Strategy Doctor
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Value is in the eye (or mind) of the beholder, which is why proper consumer segmentation and targeting is so important in beauty. However, in most cases value goes way beyond price and is a function of price combined with efficacy, quality, brand story, and so forth. All that said, while beauty has been more resilient in the face of inflation and consumer pressures, there has been a lot more brand switching as consumers seek good value. This has tended to favor the prestige segment where there are a lot of very solid new and emerging brands that have elements of luxury without the ultra high price points.
It’s interesting that many of the more nimble, emerging brands are walking the tightrope between prestige and value. Honestly, consumers want exciting choices, quality products, transparency in ingredients, and perhaps the brand’s alignment with personal values. I don’t believe the panache of a prestige brand is as important as personal shopping preferences and emotional connection. Beauty remains a category with tremendous opportunity and growth.
Dupes, white label and value brands are here to stay. Thanks to a vast army of trusted social media influencers who test and recommend alternatives to expensive beauty products, seemingly on camera in real time, even those who can afford high end, are losing interest in spending where they don’t see the return on value. Even beyond value, with the very relatable and fun brand personality that companies like E.L.F. have built, you have products that are sought after, not because they’re cheap, but because they’re actually preferred. That’s a recipe for long term success.
Most customers enjoy both prestige and economy (and e.l.f.’s very inexpensive products are terrific.) They’ll look for price, but also for innovation and effectiveness, as they should.
Fundamental shift. Most prestige products were never worth their premium prices from a functional standpoint. What consumers paid for was aspiration, exclusivity, and information scarcity. Two of those three are now gone. Brands that survive will either excel at functional performance (compete on ingredients and efficacy) or master experiential value (compete on emotion and community). The middle ground—average products with premium pricing justified by marketing alone—is disappearing.
Tariff pressures are accelerating a shift toward value in beauty, but this looks more structural than temporary. Consumers are less willing to see higher prices as a proxy for quality and are instead prioritizing efficacy and transparency. That’s why mass beauty is outpacing prestige, with growth fueled by products that deliver results at accessible price points.
For prestige, the challenge is to justify premiums through storytelling, innovation, and authenticity rather than just price signaling. Mass has the momentum, but both channels will need to sharpen their value proposition to keep pace with evolving consumer expectations.
Value may be a lasting trend in beauty as many shoppers seek affordable attractiveness. They want to look good, feel good and smell good as they return to the office more often.