- A woman applies a cosmetic product to her lips. Credits: Andres Hernandez / Wikimedia Commons, CC BY 2.0.*
In the first half of 2026, prestige beauty sales increased in Europe and the Americas, according to Circana, cited by AFP on September 30. Luxury cosmetics allow houses to offer a lower-cost first purchase than a handbag. But this driver remains uneven: depending on the category, growth comes from more products or higher prices, with a risk of discouraging customers.
A Contrast With Fashion, With Some Nuance
According to Circana, cited by AFP, high-end cosmetics sales rose 7% in North America, 5% in Europe, and 10% in Latin America in the first half of 2026. These rates point to resilience in several regions, without providing a uniform measure of the global market as a whole.
Over the same period, the fashion and leather goods divisions of LVMH and Kering each posted a 5% decline in revenue on a reported basis, according to their half-year results. After adjusting for currency and scope effects, however, the decline is limited to 1% in both cases. At LVMH, this business even returned to 1% growth in the second quarter on this adjusted, or organic, basis.
The comparison also pits regional retail sales against the global activities of conglomerates. It points to different trajectories, without proving that budgets are moving directly from fashion stores to beauty aisles.
How Is The Beauty Market Evolving?
The trend predates 2026. In its B Book 2026, Circana places 2025 as the fifth consecutive year of prestige growth in most of the regions it tracks. The firm then measures a 4% increase in North America, in the United States and Canada, and 4% across five European markets: France, the United Kingdom, Germany, Italy, and Spain. In Latin America, the 12% figure covers five countries and the period from January to November 2025. These time frames do not match the half-year described by AFP.
Prestige beauty covers several categories, including fragrances, makeup, skincare, and hair products. Their drivers differ. In its August 11 report on the United States, Circana puts sector sales at $17.1 billion in the first half of 2026, up 7%. This U.S. figure does not replace the rate for all of North America.
The breakdown makes it possible to distinguish value from volume. For U.S. prestige fragrances, revenue rose 6%, with average prices up 5% and units sold flat. Skincare, meanwhile, gained 9% in value, with double-digit unit growth. Makeup rose 3% in value despite a slight decline in quantities. Growth can therefore reflect additional demand, higher prices, or purchases shifting toward more expensive items.
What Trends Are Supporting Beauty In 2026?
For luxury houses, a lipstick or a fragrance offers a lower-commitment trial purchase than a leather goods item. Mathilde Lion, Circana’s beauty specialist interviewed by AFP, highlights makeup’s appeal for consumers who want a treat while keeping spending in check. The agency’s report from the Louis Vuitton corner at Galeries Lafayette in Paris illustrates the expansion of the houses’ universe.
Circana also links beauty’s appeal to the search for well-being and self-expression. Its B Book stresses the importance of these uses among younger generations. That reading, however, is not enough to show that Gen Z as a whole now prefers cosmetics to clothes, or that it is giving up handbags to fund its skincare routines.
These products can also create repeat-purchase opportunities as they are used up. The business challenge therefore goes beyond the first sale: keeping the customer when the bottle or jar needs replacing. That depends on the available budget and satisfaction with the product, not just the appeal of the name on the package.
Different Strategies And Margins
Market growth does not benefit all groups equally. At LVMH, fragrances and cosmetics showed flat organic sales in the first half of 2026 and a 4% decline on a reported basis. The group, however, reported strong growth at Sephora. Making products under one’s own brands and distributing those of multiple brands expose companies to very different dynamics.
Higher revenue does not tell the full story about profitability either. Based on the amounts published by LVMH, current operating profit represents about 10.7% of fragrances and cosmetics revenue, compared with 34.1% for fashion and leather goods. These ratios, calculated for the half-year, show what remains of sales after ongoing operating expenses. They show why beauty does not mechanically replace fashion’s profit engine.
Kering chose a different setup. Its half-year release says the sale of Kering Beauté to L’Oréal was completed on March 31, 2026, for 4 billion euros. It also reports a 50-year Gucci beauty licensing agreement signed with L’Oréal in July, set to take effect in mid-2027. A license allows a brand’s business in a given category to be handed to a partner: developing beauty does not always mean producing it in-house.
More Accessible, But At What Cost?
The prices posted on October 1 in the brands’ French online stores show the limits of this relative accessibility. At La Prairie, the Swiss Pristine Serum costs 300 euros for 30 ml, or 10 euros per milliliter. The equivalent of 10,000 euros per liter reflects a unit price, not a retail package offered for sale.
At La Mer, the Crème Régénération Intense is listed at 115 euros for 15 ml and 2,970 euros for 500 ml. The smaller size lowers the amount needed upfront, but works out to about 7.67 euros per milliliter, versus 5.94 euros for the larger one. These examples shed light on pricing positioning; they are neither an industry average nor a measure of formula effectiveness.
Éric Briones, a luxury expert interviewed by AFP, sees the price escalation as a risk of customer loss. He points to the use of less conspicuous brands or “dupes,” cheaper products inspired by major-brand references. For luxury houses, attracting a first-time buyer with a price lower than a handbag does not guarantee they will be able to spend again. The next purchase will test the value they place on the product.