Navigating the Volatile Beauty Market: Coty and Estée Lauder’s Strategic Plays Amidst "Treatonomics"

Table of Contents

1. Key Highlights:
2. Introduction:
3. The Enduring Allure of Fragrance: A "Treatonomics" Phenomenon
4. The Persistent Challenges of Mass Color Cosmetics in the U.S.
5. Estée Lauder’s Restructuring and Regional Headwinds
6. Operational Discipline: A Shared Strategic Imperative
7. The Shifting Sands of Consumer Behavior and Market Dynamics
8. Innovation as a Catalyst for Future Growth
9. FAQ:

Key Highlights:

• Prestige fragrances continue to demonstrate significant resilience and growth, driven by consumer demand for accessible indulgences in uncertain economic times, a phenomenon dubbed "treatonomics."
• Mass color cosmetics face persistent challenges in the U.S. market, leading companies like Coty to incur impairment charges and pivot towards adjacent, higher-margin categories such as fragrance mists.
• Both Coty and The Estée Lauder Companies are implementing extensive restructuring and cost-saving initiatives to enhance operational efficiency and profitability, signaling a sector-wide focus on discipline amidst selective consumer spending.

Introduction:

The global beauty industry, a vibrant and dynamic sector, continues to evolve under the influence of shifting consumer behaviors, macroeconomic pressures, and innovative product development. In this complex landscape, the financial performances of industry titans like Coty, Inc. and The Estée Lauder Companies (ELC) serve as critical barometers, offering insights into the broader health and future trajectory of the market. Their latest fiscal year 2025 reports, coupled with adjusted outlooks for fiscal year 2026, reveal a nuanced picture: one marked by unexpected pockets of resilience, particularly in prestige fragrances, alongside enduring softness in categories such as mass color cosmetics. These results not only underscore the sector’s current challenges but also highlight the strategic adaptations being deployed by leading players to navigate an environment characterized by volatility and selective consumer spending.

The concept of "treatonomics" emerges as a particularly compelling trend, illustrating how consumers, faced with economic uncertainty, are increasingly opting for smaller, affordable luxuries that offer an immediate mood boost. This trend has significantly bolstered the fragrance segment, positioning it as a key growth driver across both prestige and mass-market tiers. Concurrently, the persistent struggles within the U.S. mass color cosmetics market necessitate strategic realignments, including product diversification and enhanced digital engagement. Both Coty and ELC are actively pursuing comprehensive restructuring programs and operational adjustments, aiming to streamline their businesses, reduce costs, and fortify their positions for sustainable long-term growth. This analysis delves into the specific challenges and strategic responses of these two beauty giants, illuminating the underlying currents shaping the contemporary beauty market.

The Enduring Allure of Fragrance: A "Treatonomics" Phenomenon

The latest financial disclosures from Coty and Estée Lauder unequivocally highlight fragrance as a beacon of growth within the beauty sector. This resilience is particularly striking given the broader economic headwinds and fluctuating consumer confidence. For Coty, fragrance sales have been a consistent powerhouse, demonstrating remarkable compound annual growth rates across its portfolio. The company reported like-for-like increases across all fragrance tiers: a robust nine percent in ultra-premium, a respectable two percent in prestige, and a significant eight percent in consumer beauty fragrances. This widespread growth underscores the category's universal appeal, transcending different price points and consumer segments.

Sue Nabi, CEO of Coty, aptly articulated the company's unique position in capitalizing on the "booming 'treatonomics' trend." This term encapsulates the consumer behavior of seeking out small, relatively inexpensive indulgences—like a new fragrance—as a means of boosting mood or offering comfort amidst economic uncertainty. It’s a psychological compensatory mechanism where large, aspirational purchases might be deferred, but the desire for self-care and sensory pleasure remains strong. Fragrance, with its immediate sensory impact and ability to evoke emotions, fits perfectly into this paradigm. It offers an accessible form of luxury, a moment of escapism or personal affirmation that doesn't strain the household budget.

Coty's strategy in this context is to leverage its broad presence across both high-end and mass-market fragrance segments. This dual-pronged approach allows the company to capture demand from diverse consumer groups, from those investing in a premium scent from a luxury brand to those seeking an affordable yet high-quality option from a mass-market line. This diversification not only spreads risk but also positions Coty to fully capitalize on the widespread manifestation of "treatonomics." Examples of this include the continued strong performance of established prestige fragrance lines such as Gucci, Chloé, and Calvin Klein, alongside the expansion of popular mass-market fragrances under brands like Adidas or CoverGirl, which are increasingly offering scent options.

The strength of the fragrance market is not limited to Coty alone. Estée Lauder also noted stronger performance in certain prestige fragrance lines, aligning with this industry-wide momentum. For ELC, brands like Jo Malone London, Le Labo, and Frédéric Malle have seen sustained demand, demonstrating that even at the very high end of the market, consumers are willing to invest in unique, high-quality olfactory experiences. This indicates that "treatonomics" isn't merely about affordability; it’s also about perceived value, emotional connection, and the desire for distinctive personal expression through scent.

Beyond traditional perfumes, the fragrance trend is also manifesting in adjacent categories. Coty's strategic push into fragrance mists, planned across more than a dozen brands, exemplifies this expansion. Fragrance mists offer a lower price point than traditional perfumes but still deliver a sensory experience consistent with the "treatonomics" philosophy. They represent an entry point for consumers into a brand's scent profile, offering a more casual, everyday application while maintaining higher profit margins for manufacturers compared to some other mass-market beauty products. This innovation allows companies to diversify their fragrance offerings, cater to different usage occasions, and capture a broader segment of the market seeking accessible scented experiences. This tactical shift is crucial for companies seeking to maintain relevance and profitability in a competitive market.

The Persistent Challenges of Mass Color Cosmetics in the U.S.

While fragrances shine, the landscape for mass color cosmetics, particularly in the U.S. market, continues to present significant headwinds for beauty giants. Coty’s fiscal 2025 results underscore this challenge, with an eight percent decline in its Consumer Beauty division, which encompasses mass-market products, including color cosmetics. The severity of this softness was further highlighted by a substantial $212.8 million impairment charge related specifically to the Consumer Beauty’s color cosmetics segment. An impairment charge signifies that the carrying value of an asset on the company's balance sheet is greater than its recoverable amount, indicating a significant decline in the expected future profitability of that asset. In this case, it directly reflects a pessimistic outlook on the future performance of mass color cosmetics.

Several factors contribute to this ongoing struggle. Firstly, shifting consumer preferences have played a significant role. The rise of minimalist beauty routines, often focusing on skincare and natural aesthetics rather than heavy makeup, has reduced the everyday demand for a wide array of color cosmetics. Consumers are increasingly prioritizing skin health and a "less is more" approach, which naturally impacts categories like foundation, eyeshadow, and elaborate lip products. The pandemic-induced shift towards remote work and reduced social engagements further accelerated this trend, as the need for extensive makeup application diminished for many.

Secondly, the competitive landscape in mass color cosmetics is exceptionally fragmented and dynamic. The proliferation of direct-to-consumer (DTC) brands, often launched by influencers or small, agile startups, has introduced a vast array of new options to consumers. These brands can often respond more quickly to trends, leverage social media effectively for marketing, and offer unique formulations or niche products that appeal to specific demographics. Traditional mass-market players, with their extensive distribution networks and longer product development cycles, sometimes struggle to keep pace with these agile competitors.

Thirdly, the economic environment, even with the "treatonomics" trend, has an impact. While consumers might be willing to splurge on an affordable fragrance, they might be more discerning with color cosmetics, especially if they are perceived as less essential or if there are cheaper alternatives available. The value proposition becomes critical. Consumers are increasingly seeking multi-functional products or products that offer tangible benefits beyond just color, such as skincare integration or long-lasting wear.

In response to this softness, Coty is not merely acknowledging the problem but actively implementing strategic adjustments. The appointment of refreshed U.S. leadership for its Consumer Beauty division is a direct step to inject new perspectives and strategies into a struggling segment. This leadership change signals a commitment to re-evaluate product development, marketing approaches, and distribution channels to better align with current consumer demands. Furthermore, the pivot towards higher-margin extensions like fragrance mists, as discussed earlier, serves as a dual strategy: it capitalizes on the strength of the fragrance category while potentially offsetting some of the revenue declines from mass color cosmetics. This demonstrates a pragmatic approach to portfolio management, reallocating resources to areas of stronger growth potential.

Moreover, the mass color cosmetics market is also grappling with the rise of ingredient-conscious consumers. There is an increasing demand for "clean beauty" products, free from certain chemicals, and transparency regarding sourcing and production. While mass-market brands are adapting, it requires significant investment in reformulation and supply chain adjustments, which can be challenging for large organizations with vast product lines. The shift towards greater sustainability in packaging and production also adds another layer of complexity and cost pressure. The challenge for companies like Coty is to innovate and adapt within this segment while maintaining the affordability that is central to the mass-market appeal.

Estée Lauder’s Restructuring and Regional Headwinds

The Estée Lauder Companies (ELC) faced an even more challenging fiscal 2025, with net sales declining by eight percent and a significant drop in net earnings. Stéphane de La Faverie, ELC's chief executive officer, explicitly attributed these pressures to ongoing headwinds, particularly in Asia travel retail and mainland China. These regions, once powerful engines of growth for luxury beauty, have experienced considerable turbulence due to a confluence of factors, including lingering impacts of pandemic-related travel restrictions, shifts in consumer spending habits within China, and increased geopolitical uncertainties.

The travel retail sector, which encompasses duty-free shops in airports and on cruise ships, historically represented a significant portion of ELC's revenue, particularly for prestige skincare and makeup brands like Estée Lauder and La Mer. The prolonged disruptions to international travel profoundly impacted this channel. While travel has largely resumed, the pattern of consumer spending in travel retail has not fully normalized, with some consumers opting to purchase products closer to home or through e-commerce channels. Moreover, the fierce competition for tourist dollars and changes in regulatory environments in key travel hubs have added further pressure.

Mainland China, a critical market for prestige beauty globally, has also presented significant challenges. Economic slowdowns, changes in consumer confidence, and heightened competition from domestic beauty brands have contributed to a more difficult operating environment. Chinese consumers are increasingly sophisticated, demanding personalized experiences, engaging digital content, and products tailored to their specific needs. They are also becoming more nationalistic in their consumption patterns, often favoring local brands that resonate with their cultural identity. ELC, despite its strong brand equity, has had to contend with these evolving dynamics, which require substantial investment in localized marketing, product development, and supply chain optimization. The closure of some retail stores and a greater emphasis on online channels, including popular livestreaming platforms, reflect this adaptation.

In response to these pervasive pressures, ELC has embarked on a comprehensive restructuring program. This program is multi-faceted, designed to streamline operations, enhance agility, and reallocate resources more effectively. Key components include optimizing the organizational structure, which often involves reductions in force and consolidation of departments, and divesting non-core assets or brands that no longer align with the company's strategic priorities. The objective is to strip away inefficiencies and create a leaner, more responsive organization capable of navigating future market fluctuations.

Beyond operational streamlining, the restructuring program also involves strategic investments in priority brands and markets. This means identifying high-growth potential brands within its portfolio, such as certain prestige skincare lines or specific fragrance brands, and channeling significant resources into their marketing, innovation, and distribution. Similarly, ELC is focusing on key geographic markets where it anticipates strong future growth, such as emerging markets in Southeast Asia or certain mature markets demonstrating resilience. This selective investment approach ensures that capital is deployed where it can yield the highest returns and contribute most effectively to long-term growth.

De La Faverie emphasized that these moves are intended to "better position the Company for long-term, sustainable growth." This long-term perspective is crucial, as immediate financial gains from restructuring can be offset by upfront costs, but the ultimate goal is to build a more robust and resilient business model. The forecast for fiscal 2026, which anticipates a modest return to growth (net sales up 0 to 3 percent) and an adjusted diluted EPS range of $1.90 to $2.10, reflects a cautious but optimistic outlook, indicating that the benefits of the restructuring are expected to materialize over time. The emphasis on rebuilding operating profitability in pursuit of a solid double-digit adjusted operating margin over the next few years underscores this commitment to financial discipline and efficiency.

Operational Discipline: A Shared Strategic Imperative

The financial reports of both Coty and The Estée Lauder Companies reveal a shared strategic imperative: a heightened focus on operational discipline. This is not merely a reactive measure to challenging market conditions but a proactive stance designed to build more resilient and profitable business models for the future. While their specific approaches differ, the underlying goal of enhancing efficiency and optimizing resource allocation remains consistent.

For Coty, operational discipline manifests through a rigorous focus on cost savings and strategic digital investment. CEO Sue Nabi’s statement about "operating from a position of reinvigorated strength after five years of transformation and proven execution" highlights a sustained effort to streamline processes and reduce unnecessary expenditures. This can include optimizing supply chains to reduce logistics costs, renegotiating supplier contracts, enhancing manufacturing efficiency, and optimizing marketing spend by shifting towards more data-driven, digitally focused campaigns. The goal is to improve the bottom line even amidst revenue fluctuations. The reported improvement in adjusted EBITDA margins to 18.4 percent, despite a slight revenue decline, directly reflects the success of these cost management initiatives.

Digital investment is another critical component of Coty's operational discipline. This isn't just about e-commerce; it encompasses leveraging data analytics to better understand consumer behavior, investing in artificial intelligence (AI) for personalized marketing and product recommendations, and optimizing online customer experiences. A robust digital infrastructure can lead to greater operational efficiency by automating processes, improving inventory management, and enhancing direct consumer engagement, which often yields higher margins than traditional wholesale channels. For instance, advanced analytics can help forecast demand more accurately, reducing waste and optimizing production schedules. Enhanced digital touchpoints, such as virtual try-on tools for makeup or personalized fragrance recommendation quizzes, can also improve conversion rates and customer satisfaction.

The Estée Lauder Companies, in turn, are pursuing operational discipline through a more sweeping restructuring program. As discussed, this includes streamlining operations, which often involves rightsizing the workforce, consolidating administrative functions, and optimizing regional operational hubs. Such initiatives aim to reduce fixed costs and improve the company's overall cost structure. The emphasis on "better positioning the Company for long-term, sustainable growth" signals that these measures are not just about short-term fixes but about building a more agile and efficient enterprise capable of adapting to future market shifts. This deep structural change is indicative of a profound re-evaluation of how the company operates across all its divisions and geographies.

The combined results from both companies send clear signals to the broader beauty industry. First, a market defined by selective consumer spending necessitates a re-evaluation of product portfolios and pricing strategies. Consumers are increasingly discerning, seeking value, efficacy, and emotional connection from their beauty purchases. This means companies must be more strategic about which categories they invest in and how they position their products. The divergence between the growth of fragrances and the struggles of mass color cosmetics is a prime example of this selective spending.

Second, the ongoing adjustments in mass cosmetics and global distribution channels highlight the need for flexibility and adaptation. The traditional retail landscape is constantly evolving, with e-commerce continuing its ascendancy and new distribution models emerging. Companies must be willing to experiment with different retail formats, invest in omnichannel capabilities, and develop sophisticated direct-to-consumer strategies to reach customers where they are. For mass cosmetics, this might mean a greater focus on online sales, targeted promotions, and collaborations with digital influencers to drive demand.

Finally, the emphasis on indulgent categories, particularly fragrance, underscores a fundamental consumer need for moments of pleasure and self-care. In an uncertain world, beauty products, especially those with strong sensory appeal, offer an accessible form of luxury. This trend, combined with the focus on operational discipline, suggests that the beauty industry’s future will be characterized by a dual emphasis: innovating in areas of strong consumer demand while relentlessly pursuing efficiency and agility in all aspects of the business. Companies that master this balance will be best positioned for sustained success.

The Shifting Sands of Consumer Behavior and Market Dynamics

Understanding the financial performance of beauty giants like Coty and ELC requires a deeper dive into the underlying shifts in consumer behavior and broader market dynamics. The beauty consumer of today is more informed, more discerning, and more fragmented in their preferences than ever before. This evolving landscape poses both challenges and opportunities for established players.

One significant shift is the increased prioritization of wellness and holistic beauty. Consumers are increasingly viewing beauty not just as superficial enhancement but as an integral part of their overall well-being. This has led to a boom in skincare, hair care, and even nutritional supplements that promise beauty from within. The focus on "skinimalism" and natural beauty trends means that intricate makeup routines are being replaced by simpler, more functional approaches. This directly impacts the demand for mass color cosmetics, where the focus has historically been on a wide array of shades and finishes for every occasion. Brands that can seamlessly integrate skincare benefits into their color cosmetics or offer more minimalist, multi-functional products are likely to gain traction.

Social media and influencer culture continue to exert an unparalleled influence on beauty trends and purchasing decisions. TikTok, Instagram, and YouTube have become primary discovery platforms for new products and brands. This democratizes beauty, allowing small, niche brands to gain massive exposure overnight, often challenging the dominance of traditional beauty conglomerates. For larger companies, this necessitates a shift from traditional advertising models to more authentic, influencer-led marketing campaigns and agile content creation strategies. The viral success of a single product can drive unprecedented demand, but conversely, negative reviews or perceptions can quickly spread and damage brand reputation.

The concept of value has also undergone a transformation. Value is no longer solely about price; it encompasses efficacy, ethical sourcing, sustainability, and brand purpose. Consumers are increasingly willing to pay a premium for brands that align with their personal values, whether it's cruelty-free practices, sustainable packaging, or transparent ingredient lists. This trend has fueled the growth of "clean beauty" and ethical brands, pushing traditional players to reformulate products, audit supply chains, and communicate their social and environmental commitments more effectively. Both Coty and ELC have made strides in this area, but the demands for transparency and sustainability continue to escalate.

Regional market dynamics also play a crucial role. While China and Asia travel retail presented challenges for ELC, other regions may offer different opportunities. Emerging markets, particularly in Southeast Asia, Latin America, and Africa, are experiencing rising disposable incomes and a growing middle class, leading to increased demand for beauty products. However, these markets often require localized product development, distribution strategies, and marketing approaches that cater to specific cultural nuances and consumer preferences. Companies must navigate diverse regulatory landscapes and adapt their business models to succeed in these varied environments.

Furthermore, the retail landscape itself is undergoing a dramatic transformation. Brick-and-mortar stores are evolving from mere transaction points to experiential destinations. Concepts like beauty playgrounds, personalized consultation services, and immersive brand experiences are becoming crucial for attracting and retaining customers. Concurrently, the rise of quick commerce and accelerated delivery options is reshaping consumer expectations for convenience and immediacy in online shopping. Companies must invest in omnichannel strategies that seamlessly integrate online and offline experiences, allowing consumers to discover, purchase, and engage with brands across multiple touchpoints.

The competitive landscape is also intensified by the convergence of categories. Fashion brands are launching beauty lines, skincare brands are venturing into color cosmetics, and even technology companies are exploring beauty-tech innovations. This blurring of lines creates more choices for consumers but also increases the pressure on traditional beauty companies to innovate and differentiate. The agility to respond to these rapid changes, coupled with a deep understanding of evolving consumer psyche, will be paramount for sustained success in the beauty industry.

Innovation as a Catalyst for Future Growth

In a market characterized by volatility and intense competition, innovation remains a critical catalyst for future growth for Coty and Estée Lauder. Innovation is not just about new product launches but also encompasses advancements in technology, sustainable practices, and novel consumer engagement strategies.

For fragrance, the innovation focus extends beyond new scent profiles to advanced delivery systems and personalized experiences. Micro-encapsulation technology can allow fragrances to be released gradually throughout the day, extending wear. AI-powered tools can analyze consumer preferences to recommend bespoke scent combinations, while virtual try-on experiences for fragrances can help consumers sample scents remotely. Brands are also exploring the use of synthetic biology and biotechnology to create sustainable fragrance ingredients, reducing reliance on traditional, sometimes resource-intensive, natural sources. The development of fragrance mists, as Coty is pursuing, is an example of product innovation that taps into new usage occasions and price points.

In skincare, innovation is often driven by scientific breakthroughs in ingredients and formulations. The discovery of new active compounds, advancements in delivery mechanisms (like liposomal encapsulation for better absorption), and the development of highly specialized products for specific skin concerns (e.g., microbiome-balancing serums, anti-pollution treatments) are key. ELC, with its strong heritage in advanced skincare, continuously invests in R&D to bring cutting-edge solutions to market, such as its iconic Advanced Night Repair serum, which undergoes continuous scientific upgrades. The trend towards personalized skincare, leveraging AI and genetic data, also presents a significant area for future innovation, allowing brands to offer customized formulations to individual consumers.

For color cosmetics, despite current softness, innovation is crucial for revitalization. This includes developing hybrid products that combine makeup with skincare benefits (e.g., foundations with SPF and anti-aging ingredients, lipsticks with hydrating properties). The demand for "clean" and sustainable makeup formulations, along with refillable packaging solutions, is also driving innovation. Brands are experimenting with new textures, long-wearing formulas, and inclusive shade ranges that cater to a wider spectrum of skin tones. Digital innovation, such as augmented reality (AR) virtual try-on tools, can also significantly enhance the consumer experience and drive sales in this category. Coty's efforts to reinvigorate its mass color cosmetics division will undoubtedly involve such product and digital innovations to regain market share.

Beyond product innovation, process innovation is equally vital. This includes optimizing manufacturing processes to reduce energy consumption and waste, implementing advanced analytics for demand forecasting and inventory management, and utilizing automation in warehouses and distribution centers to improve efficiency. Digital transformation across the entire value chain, from R&D to marketing and sales, can unlock significant competitive advantages. Both Coty and ELC’s focus on digital investment and operational streamlining points to this broader view of innovation.

Finally, innovation in consumer engagement is paramount. This involves creating compelling brand narratives, building strong online communities, and offering personalized experiences both online and offline. Experiential retail, interactive digital campaigns, and subscription models that offer curated beauty boxes are examples of how brands are innovating to connect with consumers on a deeper level. The ability to quickly identify emerging trends, rapidly develop and launch new products, and effectively communicate their value proposition to a diverse global consumer base will determine the future success of these beauty powerhouses.

FAQ:

Q1: What is "treatonomics" and how does it impact the beauty industry?

A1: "Treatonomics" refers to the consumer behavior of seeking out affordable, smaller luxuries that provide an immediate mood boost or sense of indulgence, especially during periods of economic uncertainty. In the beauty industry, this trend significantly benefits categories like fragrance, where consumers are willing to purchase perfumes or fragrance mists as a relatively inexpensive way to feel good and uplift their spirits, even when larger, more significant purchases might be deferred. It explains the sustained growth in fragrance sales across various price points.

Q2: Why are mass color cosmetics struggling in the U.S. market?

A2: Mass color cosmetics in the U.S. market face several challenges. These include a shift in consumer preferences towards more minimalist beauty routines focusing on skincare and natural aesthetics, intense competition from agile direct-to-consumer (DTC) brands, and a greater consumer demand for "clean" and sustainable formulations which require significant reformulation efforts. The economic environment also influences selective spending, where consumers might prioritize other categories or seek more multi-functional products.

Q3: What specific challenges did The Estée Lauder Companies (ELC) face in fiscal 2025?

A3: ELC faced significant challenges in fiscal 2025, primarily due to ongoing headwinds in Asia travel retail and mainland China. Travel restrictions and reduced international travel impacted the duty-free sector, a key revenue stream. In mainland China, economic slowdowns, shifting consumer confidence, and increased competition from local beauty brands contributed to a difficult operating environment, leading to a decline in net sales and earnings for the company.

Q4: How are Coty and Estée Lauder responding to these market pressures?

A4: Both Coty and Estée Lauder are implementing extensive restructuring and operational discipline programs. Coty is leveraging its strength in fragrances, pushing into fragrance mists, and focusing on cost savings and digital investments to improve profitability. Estée Lauder is undertaking a sweeping restructuring to streamline operations, reduce costs, and strategically invest in priority brands and markets to position itself for long-term sustainable growth, aiming to rebuild operating profitability.

Q5: What does the term "impairment charge" mean in the context of Coty's financial report?

A5: An impairment charge is an accounting adjustment that occurs when the fair value of an asset declines below its carrying value on a company's balance sheet. For Coty, the $212.8 million impairment charge related to its Consumer Beauty's color cosmetics indicates that the company estimates the future profitability or recoverable amount from this specific business segment to be significantly lower than its current book value, reflecting a pessimistic outlook on that category's performance.

Q6: How is innovation contributing to the future growth strategies of these beauty companies?

A6: Innovation is crucial for future growth. In fragrance, this includes new scent profiles, advanced delivery systems, and personalized AI-driven recommendations. Skincare innovation focuses on scientific breakthroughs in ingredients and personalized formulations. For color cosmetics, it involves hybrid products with skincare benefits, "clean" formulations, refillable packaging, and digital tools like AR try-on. Beyond products, both companies are investing in process innovation (e.g., supply chain optimization, advanced analytics) and consumer engagement innovation (e.g., experiential retail, digital campaigns) to stay competitive.

Q7: What is the long-term outlook for the beauty industry based on these reports?

A7: The long-term outlook suggests a beauty industry defined by selective consumer spending, continued strength in indulgent categories like fragrance, and ongoing adjustments in mass cosmetics and global distribution. Companies that prioritize operational discipline, leverage digital transformation, and remain agile in adapting to evolving consumer behaviors and regional market dynamics will be best positioned for sustained success. The focus on rebuilding profitability and achieving solid operating margins indicates a push for greater efficiency and financial health across the sector.