After a roller-coaster first half of the year, beauty’s dealmaking engine eased off the accelerator in the third quarter. The exuberance that defined the latter part of Q2—when strategics returned to the table and headline-grabbing deal values had both investors and target companies dreaming again—gave way to a more measured, cautious market environment.While deal volume slowed, conversations did not. Many bankers reported an uncharacteristically busy end to summer, suggesting a market still active beneath the surface. Despite talk of pipelines and engagement letters, dealmakers in Q3 chose precision over speed. The strategics who dominated the headlines earlier in the year were largely absent. The single largest transaction in the beauty deal pipeline—the surprise announcement of L’Oréal’s acquisition of Kering’s beauty assets—wasn’t announced until October, placing it squarely in Q4.Behind the scenes, dealmakers pointed to a familiar mix of headwinds: tariff concerns, interest rate uncertainty, and uneven consumer data—all valid reasons to drive below the speed limit for now. For a sector that thrives on confidence and clarity, Q3 offered little of either.Q3 Deal Activity By the NumbersThe BeautyMatter Deal Index tracked 67 transactions in Q3, marking an 18.5% decline compared to the same period last year. Growth investments were down 21.4% year over year, while M&A activity fell 32.6%. On a year-to-date basis, total beauty deal activity was down 10.2%, signaling a recalibration after a volatile start to the year.