As Economy Slides, Cosmetics Sector Looks Beautiful

2008-09-23 | 07:31

But will share prices test "recession-resistant" profile?

Despite economic turmoil, share prices for most beauty companies will never get as ugly as those at financial companies.

Deutsche Bank analyst Bill Schmitz Jr. said the cosmetics industry has recently posted slight sales growth, even though the economy has remained soft.

Sales of color cosmetics rose 0.7 percent from a year ago for the four weeks ended Sept. 7.

Specifically in the sector, Mr. Schmitz said L'Oreal Bare Naturale is losing market share on a year-over-year and sequential basis in categories that include blush and foundation.

On the positive side, Mr. Schmitz said Revlon is gaining market share in foundation, concealer and bronzer.

But yesterday, shares of Estee Lauder Co. declined $1.02 to $49.94, and Elizabeth Arden Inc. slipped $1.53, or 7.4 percent, to $19.10. Shares of Avon Products Inc. declined 36 cents to $40.16, and shares of Revlon Inc. dropped 11 cents to $14.00.