Despite economic uncertainties, sales in the US prestige beauty sector witnessed sales revenue growth of 15% year over year, reaching $27.1 billion in 2022. Prestige beauty was the fastest-growing industry segment, across more than $4 trillion in US general merchandise consumer spending tracked by NPD and IRI. Beauty was also the only industry across discretionary retail and consumer packaged goods (CPG) categories to experience unit sales growth in 2022.

"In more ways than one, the prestige beauty industry had an epic year," said Larissa Jensen, beauty industry advisor at NPD. "Regardless of whether consumer confidence was up or down, growth in the prestige beauty market remained strong. The factors supporting this phenomenon—including increased spending from higher income consumers, the redefinition of wellness emphasizing mental health, and an increase in socialization—will continue to fuel positive performance this year."

All prestige beauty categories grew by double digits year over year:

Makeup

• The category grew 18%.
• Makeup contributed the most sales revenue gains of all the prestige beauty categories. 
• Lip products were the fastest-growing segment in makeup, with sales surpassing pre-pandemic 2019 levels by double digits. 
• Lip gloss outperformed lipstick, compared to both 2021 and 2019. 

Skincare

• The category increased 12%.
• In skincare, body products grew at more than three times the rate of facial products. 

Fragrance

• The category grew 11%.
• Building on performance as the industry's fastest-growing category in 2021, the fragrance market not only maintained this elevated revenue level but also continued to grow.
• Growth was led by higher fragrance concentrations such as eau de parfums and parfums, and higher-end artisanal fragrance juices. 

Haircare

• The category grew 22%.
• Haircare was the smallest, yet fastest-growing, beauty category, led by masks and targeted treatments.
• Haircare ranked among the fastest-growing segments in the prestige beauty market but landed among the top decliners in the mass channel.

Beauty products experienced consistent revenue growth across both the mass and prestige markets, up 11% when combined; however, only prestige unit demand remained strong. The prestige beauty market also experienced a greater shift back to stores in 2022, with year-over-year brick-and-mortar retail share growing, while online sales share increased in the mass market.

"Looking at the industry holistically, inclusive of the prestige and mass markets, the future outlook for overall beauty is a positive one," said Jensen. "In an industry steeped in emotion, consumers have demonstrated they are willing to continue to spend on beauty products. Beauty brings joy, which is a universal aspiration and will drive our industry's resiliency in 2023."

While these numbers are fantastic it's important to consider the impact of inflation - revenue was up double digits but many brands  increased prices. Next year will tell the real story.