When it comes to prestige beauty, business is booming.
According to data from the NPD Group, U.S. prestige beauty sales reached $4.1 billion in the third quarter, a 7 percent year-over-year increase. Makeup was the largest, but slowest-growing category, up 1 percent to $1.9 billion, with skin care following at $1.3 billion, up 15 percent. Fragrance sales increased by 6 percent to $783.6 million, and hair was up 27 percent to $176.7 million.
“The big story for the third quarter is the acceleration in skin care, which is growing more than twice the rate of fragrance and 15 times faster than the rate of makeup," Larissa Jensen, beauty industry analyst at NPD, said in a statement. "We continue to see natural brands and entry-price categories fuel the skin-care category, but the big shift this year is the renewed interest in new products from legacy classics in the antiaging category. With consumer confidence breaking records, the two highest-priced beauty categories of skin care and fragrance may be reaping the benefits of a bigger wallet. Despite the success of its sister categories, makeup continues to struggle, being the most impacted by a highly fragmented marketplace."
In makeup, face sales grew by 2 percent, driven mainly by concealer, powder and tinted moisturizer. Lip color sales were down 10 percent, while lip gloss grew by 4 percent. Eyebrow makeup and mascara saw growth, but eye shadow sales declined by 6 percent. False lashes, which are also experiencing growth in mass, were up 30 percent to $13.5 million.
Natural brands, up 24 percent, were the fastest-growing in skin care, accounting for more than one-quarter of skin-care sales. Age specialist product sales grew 14 percent. Face mask sales were up 12 percent but are slowing overall.
Fragrance was driven mainly by a 9 percent increase in fragrance juice sales. Women's sales were up by 8 percent; men's sales increased by 12 percent.
In hair, prestige beauty's fastest-growing category, all segments — hair care, color, sets and styling — saw growth. Within hair care specifically, hair masks were up 33 percent and dry shampoo was up 16 percent.
“Heading into the holiday season, attention will center on value, newness and fun," Jensen said. "Skin-care sets tend to perform well every year during holiday. I expect sales of skin-care face masks and minis will be strong as the low price-point, and fun packaging encourages the add-on gift purchase. In a similar fashion, travel-sized makeup products have experienced double-digit gains throughout 2018, so I anticipate the strong performance will spill over into holiday. In fragrance, launches during holiday can make or break the category, but given the robust performance seen so far in 2018, I anticipate fragrance will end the year strong."
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