Circana data for Q1 confirmed Ulta Beauty CEO Dave Kimbell's sentiment of a category slowdown after several years of strong growth. According to Circana, US prestige beauty industry saw revenue grow 9% in the first quarter, compared to the same period in 2023, while mass-market beauty sales increased just 2% year over year.

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

Makeup

• Makeup is still prestige beauty's largest category and grew by 5%, while the category at mass saw a decline of 5%.
• The category is slowing down on the upper ends of the business, but both dollar and unit sales are up. 
• Lip performed the strongest, led by balms and oils, posting 26% gains from last year.
• Artistry brands are the largest and second fastest growing in that category.

Skincare

• Jensen predicts skincare could overtake makeup by performance this year.
• The category grew 10% in prestige and just 4% in mass channels.
• Clinical brands are the largest segment of skincare.
• Body spray was the category’s top gainer, followed by facial serums.

Hair

• Prestige saw 11% growth, while mass market saw just 1% growth.
• Salon brands drove growth in prestige, but celebrity brands grew by 64%. 
• Hair wellness continues to rise in importance, which is evident by the performance of hair thinning and loss products, hair oils and serums, scalp care, and heat protectants, which all grew sales between 13% and 25% during the quarter.

Fragrance

• The category grew 13% in prestige and dipped 2% in mass.
• Fragrance is seeing growth at both ends of prestige, from ultra prestige to lower-priced body sprays.  
• Luxury fragrances grew at more than double the rate of prestige overall.
• 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. 

“The slowdown in growth that we are seeing in the beauty industry is a reflection of an industry stabilizing after strong double-digit performance for the past two years,” said Jensen. “But we should not underestimate its strength, as sales grew by over $600 million in Q1. There is a lot of excitement in beauty, from trending brands and new product launches to growing engagement from younger consumers. With Mother’s Day and Father’s Day on the horizon and summer activities drawing near, products that make us look and feel good will continue to be top of mind.”