1. Fragrance remains the industry’s growth engine
If one category confirmed its dominance this summer, it was fragrance. At The Estée Lauder Companies, fragrance delivered 10% organic growth in the fourth quarter, driven notably by Le Labo and Tom Ford, and played a decisive role in the group’s return to growth, with organic sales rising 3% for the full fiscal year. At Ulta Beauty, prestige fragrances also played a central role in driving sales momentum during the first half, helping lift both sales and full-year guidance
The picture is more nuanced for Interparfums. While Interparfums SA now expects a decline in 2026 after a challenging first half (-7.3%), the setback is largely attributable to adverse currency effects linked to its significant exposure to North America, compounded by weaker demand in Europe and Asia. By contrast, Interparfums Inc., the group’s mother company, proved more resilient, posting 2% revenue growth in the first six months of the year.
The launch pipeline also remained exceptionally active throughout the summer, from both major groups (Glimmer by Estée Lauder, Coco Mademoiselle Crush Absolu by Chanel, or Sea Salt & Bergamot by Jo Malone) and niche players (Demon Dancer by Ex Nihilo—supported by a Paris pop-up — or Dirty Rice by BornToStandOut).
Meanwhile, the success of events such as ScentFest SF highlighted consumers’ growing appetite for more immersive and community-driven fragrance experiences. More than ever, fragrance is emerging as a strategic lever for innovation, customer acquisition, and premiumization — a trend that will be high on the agenda at the upcoming Fragrance Innovation Summit in Paris, France.
The category’s strength is also reverberating across the supply chain. DSM-Firmenich reported 5% organic growth in the first half, fueled by double-digit gains in both Fine Fragrances and Consumer Fragrances, while its Beauty & Care Ingredients business remained stable. Robertet also benefited from strong momentum in perfumery, whereas Givaudan saw currency headwinds — particularly the strength of the Swiss franc — temper otherwise positive sales growth.
2. Premium beauty delivers a mixed picture
The summer also challenged some of the more pessimistic assumptions about consumer spending. Ulta Beauty posted an 8.9% increase in second-quarter revenue and raised its full-year guidance. The retailer notably highlighted strong sales of premium makeup and fragrances in North America.
The retailer also revealed that nearly half of its sales now come from exclusive brands and products, underscoring a broader shift in competitive dynamics: differentiation, desirability, and social-media-driven discovery are becoming more decisive than price alone.
However, Europe tells a different story. Douglas reported a 2% decline in third-quarter sales, with Germany, France, and the Netherlands remaining under pressure amid cautious consumer spending and intensified promotional activity. In response, the retailer is accelerating investments in e-commerce, reviewing its store footprint, and adjusting its pricing strategy. Although it has lowered its outlook for European beauty market growth — from 4-6% to 2-3% — Douglas is maintaining its full-year targets, betting that its omnichannel model will support a return to more profitable growth.
3. Streamlining, refocusing, and targeted acquisitions
After years of aggressive expansion, several beauty giants are entering a new phase of strategic discipline. Coty epitomizes this shift. Following a 5% decline in sales in fiscal 2025/2026, the group is sharpening its focus on its most strategic brands, strengthening consumer engagement, and streamlining its portfolio. The planned transfer of the Gucci Beauty license to Kering and L’Oréal has only accelerated this broader strategic reset.
Meanwhile, Avon is moving toward a unified management structure for its U.S. and international businesses under Regent’s ownership. However, Natura, which retains control of the brand in South America, continues to grapple with the challenge of restoring sustainable long-term growth.
In the fragrance sector, Symrise is set to acquire Floral Concept, a French specialist in natural ingredients. The deal will combine Floral Concept’s expertise with that of Lautier 1795, the German group’s recently relaunched subsidiary.
4. International growth is being rewritten
Global expansion remains a strategic priority for many companies, but the playbook is evolving. K-beauty continues to gain momentum, while Western brands are increasingly looking to Asia, the Middle East, and North America for their next growth opportunities.
Japanese companies are also stepping up their international ambitions, with Kao expanding Curél across Europe and Ci Flavors turning to KKR to accelerate its global development. At the same time, American and European groups are reinforcing their presence in faster-growing markets.
But the international equation is becoming more complex. Trade tensions continue to reshape the industry’s operating environment, with the latest escalation between the United States and Canada highlighting how tariff decisions can ripple through an industry built on tightly interconnected cross-border supply chains.
5. Sustainability moves from compliance to strategy
Summer 2026 confirmed that sustainability is becoming a strategic issue. The Packaging and Packaging Waste Regulation (PPWR) entered into force in the European Union on 12 August, marking the beginning of a profound overhaul of packaging rules, with increasingly stringent obligations set to take effect from 2030. Rather than waiting, brands are already adapting their innovation roadmaps. Kanebo, for example, selected Eastman’s Cristal One IM812 specialty PET resin for the thick-walled cap of its Generating Essentials Treatment Lotion, while Firn opted for Cosmogen & Asquan’s Stick ReUse platform for its new refillable sunscreen.
Climate-related disruptions, mounting pressure on natural resources — including the supply of Breton seaweed — and growing scrutiny of sourcing practices are forcing companies to rethink resilience alongside sustainability. Yet progress remains uneven. Negotiations on a global treaty to curb plastic pollution continue to face significant resistance.
