To The Moon

Balck Friday is coming! The lipstick index has returned to people's horizons.

What is the lipstick index?

The lipstick index was proposed by the former president of Estée Lauder$Estee Lauder(EL)$ , who analyzed Estée Lauder's actual revenue figures, and found that lipstick sales went against the trend during the recession.

Lipstick, as a cheap non-essential, can comfort consumers. In the economic downturn, people will still have a strong desire to spend.

But during the COVID-19 pandemic, demand for makeups fell because there was little need to use, while lipstick sales were the hardest hit, and the lipstick index disappeared at one point.

As the global economy slows and many countries relax restrictions on pandemic prevention, the lipstick index once again has a place in the economy.

Extraordinary performance of the makeup sector

Of the 14 non-essential categories tracked by market research firm NPD Group,

the makeup industry is the only non-essential retail category with sales growth so far this year.

Lipstick sales rose 37% year-on-year in the year to October.

NPD Group pointed out that among the high-end makeup products, Lipstick is the only category whose sales have increased compared with those before the pandemic.

According to Jensen, makeup products are one of the few that respond to consumers' emotional needs, which makes them feel good.

Can Black Friday boost the makeup/retail industry?

L'Oreal$L'Oreal Co.(LRLCY)$ 's third-quarter sales were 9.575 billion euros, up 9.1% from a year earlier.

Nicolas Hieronimus, chief executive of L'Oreal, pointed out in an earnings call in October that a high-end lipstick or mascara of 30 euros was an "affordable enjoyment".

Coty Inc.$Coty(COTY)$ , the world's largest perfume company, released its earnings report for the first quarter of fiscal 2023, which ended September 30, showing that the global popular beauty category is growing at a moderate rate. Koty continued to outperform the market, and expand its global market share for 10 months in a row.

Retailer Target$Target(TGT)$ pointed out that Beauty products sales rose about 15% in the third quarter from a year earlier, with ULTA Beauty Target's total sales tripling from a year earlier.

Same-store sales of Bluemercury, a chain of cosmetics products featured by Macy's$Macy's(M)$ , rose 14% in the third quarter from a year earlier. Kohl's$Kohl's(KSS)$ , which works with Sephora, also outperformed other chain department stores.

Do you think the retail sector will be lifted by Black Friday?

Which company are you bullish most?

Do you have plan to buy cosmetics on this Black Friday?

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