The beauty industry has entered 2025 on a weak footing, with several major players—L’Oréal (EPA: OREP), Coty (NYSE: COTY), Estée Lauder, and Elf Beauty—reporting disappointing Q4 2024 results. The industry’s growth rate slowed to 3.5% in H2 2024, down from 5.5% in H1, reflecting broad-based weakness across regions and product categories, except for fragrances.
Industry Challenges and Regional Trends
1. Asia and North America Face Continued Weakness

Asia Travel Retail is expected to contract further in Q1 2025.
Mainland China remains in a slight decline, despite hopes for a rebound.
North America’s makeup sector is under pressure, with dermocosmetics slowing.

2. Fragrances Buck the Downtrend

The fragrance segment continues to show resilience, emerging as a bright spot in the industry.

3. Rising Costs Add to Industry Struggles

UBS warns that a quick turnaround in Q2 may be unrealistic, citing:

Higher costs affecting margins.
Potential inventory rebuilding in North America.
New product launches that could help, but may not be enough to offset broader weakness.

4. Beiersdorf’s Outlook in Focus

Beiersdorf (ETR: BEIG) will report earnings on February 27.
UBS expects 7.8% organic sales growth in Q4 but warns that the company may miss its 2025 outlook.
Forecasted 5.1% growth for 2025 lags behind the market consensus of 6%.

Investment Takeaways: Monitoring Key Metrics

Global beauty sector growth trends, especially in China and North America.
Fragrance segment’s performance, as it continues to defy broader industry weakness.
New product launches and their ability to drive demand recovery.
Rising costs and inventory trends across major beauty brands.

For a deeper financial analysis of the beauty industry’s key players, including growth trends, financial metrics, and valuation insights, explore Financial Modeling Prep’s Full Financials API here.