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Americans are turning to cosmetics and fragrances to beat the inflation blues, in a trend called the “lipstick effect” that could sustain the post-pandemic rebound in the beauty market and help Estée Lauder and Coty’s quarterly sales.
The “lipstick effect” is a phenomenon whereby consumers buy more beauty products instead of expensive items during economic downturns and is expected to cushion the blow of closures in China‘s major beauty markets, analysts say.
“The general idea is that consumers will invest in small luxuries that increase their confidence and perceived attractiveness during times of uncertainty,” said Jennie Liu, senior lecturer and executive director of the Yale Center for Customer Insights.
“Lipstick effect” keeps Estée Lauder and Coty selling
Cosmetics maker Coty, meanwhile, is expected to report fourth-quarter sales of $1.14bn, up 7.4% from 2021, according to analysts surveyed by Refinitiv. While Estée Lauder just announced sales of $3.56 billion in the fourth quarter, down 10% from $3.94 billion in the previous period.
Estée Lauder, however, is expected to post a 15% increase in the Americas, according to Refinitiv’s IBES data.
Indeed, “lipsticks are perfect for those looking to give their confidence a boost without stretching their budget, compared to expensive luxury products such as handbags,” said Kunal Sawhney, managing director of equity research firm Kalkine Group.
It is worth remembering that the US has officially experienced two successive quarters of GDP decline and is on the verge of recession. During the 2008 recession, beauty emerged unscathed, as “it was kind of a joy factor” for customers, said Ashleigh Barker, director of the Consumer Group at global investment bank Lincoln International.
Stock market sentiment for Estée Lauder and Coty
The current average analyst rating on Estée Lauder stock is “Buy” from 26 analysts, with 18 analysts having a “Buy” rating or higher.
The median price target is $306, which is about 11% above Estée Lauder’s last closing price.
The current average rating of 14 analysts on Coty is also “Buy”, with six analysts having a “Buy” rating or higher.
The median price target is $10.13, about 29% higher than Coty’s last closing price.
Read also > Coty raises its annual forecast thanks to its luxury division
Featured photo : © Coty[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]
Americans are turning to cosmetics and fragrances to beat the inflation blues, in a trend called the “lipstick effect” that could sustain the post-pandemic rebound in the beauty market and help Estée Lauder and Coty’s quarterly sales.
The “lipstick effect” is a phenomenon whereby consumers buy more beauty products instead of expensive items during economic downturns and is expected to cushion the blow of closures in China‘s major beauty markets, analysts say.
“The general idea is that consumers will invest in small luxuries that increase their confidence and perceived attractiveness during times of uncertainty,” said Jennie Liu, senior lecturer and executive director of the Yale Center for Customer Insights.
“Lipstick effect” keeps Estée Lauder and Coty selling
Cosmetics maker Coty, meanwhile, is expected to report fourth-quarter sales of $1.14bn, up 7.4% from 2021, according to analysts surveyed by Refinitiv. While Estée Lauder just announced sales of $3.56 billion in the fourth quarter, down 10% from $3.94 billion in the previous period.
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Americans are turning to cosmetics and fragrances to beat the inflation blues, in a trend called the “lipstick effect” that could sustain the post-pandemic rebound in the beauty market and help Estée Lauder and Coty’s quarterly sales.
The “lipstick effect” is a phenomenon whereby consumers buy more beauty products instead of expensive items during economic downturns and is expected to cushion the blow of closures in China‘s major beauty markets, analysts say.
“The general idea is that consumers will invest in small luxuries that increase their confidence and perceived attractiveness during times of uncertainty,” said Jennie Liu, senior lecturer and executive director of the Yale Center for Customer Insights.
“Lipstick effect” keeps Estée Lauder and Coty selling
Cosmetics maker Coty, meanwhile, is expected to report fourth-quarter sales of $1.14bn, up 7.4% from 2021, according to analysts surveyed by Refinitiv. While Estée Lauder just announced sales of $3.56 billion in the fourth quarter, down 10% from $3.94 billion in the previous period.
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