Conflicting news reports abound about the state of the luxury market in 2012, and the jury is still out on where the year will end up for the cosmetics and toiletries industry as a whole. Some reports show luxury companies like Ralph Lauren missing revenue goals and lowering EPS in the second quarter of 2012, and a cluster of such reports in August point to skittish high-end consumers putting down their credit cards.
However, other reports show positive news. Estée Lauder’s latest quarterly earnings report on August 14 showed better than expected revenues and EPS, with growth in the United States being high single digits compared to the previous year. Elizabeth Arden shows similar favorable signs of beating expectations, even though Arden’s growth was stronger outside of North America.
Meanwhile, some specialty brands also seem to be faring well in 2012, as they did in 2011. The closely-watched Bath & Body Works’ comparable sales growth was 7% in the second quarter of 2012. The domestic growth in Bath & Body Works was driven by Limited’s Signature Collection product line, and its soap and sanitizer business.
Professional brands are expanding distribution in order to maintain market share. Kline also observes that retailers are upping the ante, transforming once again the shopping experience for beauty products. Walgreen’s dermatological skin care kiosk officially opens on August 20 in the Chicago suburb of Deer Park, Illinois. Walgreens heralds a shift of U.S. drug stores becoming more like European pharmacies, where the beauty brands have the gravitas of a professional aura while being available to any drug store shopper that wants to pay the slightly premium price for a solid brand with clinical results.
Kline & Company will give all the data for every important cosmetics and toiletries brand in every channel, including its heralded analysis into the “whys and wherefore” of the market, based on many interviews with industry players to get behind the numbers.
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