Dive Brief:

• Economic pressures don’t seem to be adversely affecting the beauty industry, which experienced sales growth in all segments year to date through September, according to a report from Circana.
• Prestige beauty sales increased 7% to $8.1 billion for Q3 and were up 4% to $24.1 billion for the first nine months of the year. Mass market sales outperformed prestige, growing 6% for the quarter and 5% for the year through September to $54.5 billion.
• One-third of shoppers plan to gift beauty products this holiday season, a 3.7-point increase over the same period last year, the report found. “The momentum is especially strong among higher-income households and those with children, Millennials, and Gen Z – who are not only buying for others but also indulging in self-gifting,” the report said.

Dive Insight:

While much of retail has faced challenges due to inflation, tariffs and other factors, beauty has been a bright spot. 

“The beauty industry had a really stellar third quarter and, in fact, the growth rate has ramped up when we compare the past three quarters of 2025, which bodes well stepping into the holiday season,” Larissa Jensen, global beauty industry adviser at Circana, said in a statement. “Beauty is in a position to shine this holiday, with one-third of consumers planning to gift beauty products.”  

Prestige fragrance sales increased 6% over the first three quarters, while mass fragrance sales jumped 17% based on sales revenue. Mass skin care also outpaced prestige, up 5% compared to 1%. Prestige hair sales during the 9-month period increased 8%, while mass grew 4%, and prestige makeup grew 3% over the mass market’s 1% growth.

Retailers traditionally not in the beauty space are taking notice and adjusting their strategies to take advantage of a growing industry segment.

Gap Inc’s CEO referred to beauty and accessories as “sleeper categories” as it announced a fall test launch of beauty and personal care in 150 of its stores with plans to broaden the scope of distribution in 2026. Walmart in March announced that it increased its assortment of beauty brands, adding 60 prestige labels over the past year.

And Amazon hosted its fifth annual holiday beauty event this fall as the retailer continues to grow the segment. Its market share is projected to reach 15% by 2030, according to a report earlier this year by TD Cowen. Amazon and TikTok Shop are both expected to grab share in the category over the next five years, taking a bite from Walmart, Target, drugstores and department stores.