CITIC Securities Overseas Beauty Leader 2026Q2 Performance Review: High-end, Effective, and Fragrance Comprehensive Capabilities Win

The Zhitong Finance App learned that CITIC Securities released a research report saying that judging from the selected sample of listed international beauty care companies, 2026H1 global beauty demand showed signs of recovery. Leading international brands and Korean foundries performed well, and the growth momentum and profit recovery pace are still diverging. Focusing on China, the growth rate of international beauty leaders such as L'Oréal and Estée Lauder has improved, and the growth rate of international personal care leaders such as P&G and Unilever has gradually picked up. Some Japanese and South Korean brands are still under pressure due to channel adjustments.

In the short term, the good performance of high-end and effective products in the Chinese market shows opportunities for structural growth, while international brand operations resume or place higher demands on domestic products; in the medium term, the operational differentiation of international beauty care companies and the overseas expansion of Korean cosmetics further indicate that the continued growth of the beauty care industry requires the support of multi-dimensional comprehensive capabilities such as organization, R&D, products, channels and marketing. Continue to be optimistic that domestic cosmetics will continue to improve their competitiveness based on organizational evolution, product improvement, and marketing and operation advantages. Maintain the beauty industry's “better than the market” rating.

CITIC Securities's main views are as follows:

Global demand for beauty care has recovered, and leading brands and Korean supply chain companies have performed well.

Since this year, global demand for beauty care has gradually recovered, and sales growth of some companies has accelerated, but there are still differences in operating and profit performance. Among brand companies, L'Oréal continued to outperform the market, Estée Lauder's business gradually recovered, and APR achieved high growth through product potential and European and American channel expansion; Unilever and APR raised annual revenue expectations, and Kao and Ulta raised revenue and profit related guidelines. Among supply chain companies, Cosmès and Kolmar Korea have benefited from the expansion of Korean cosmetics exports and increased customer orders to achieve accelerated revenue growth, but the pace of profit recovery still varies from region to region. Brands owned by Coty and Beiersdorf are in a period of adjustment, and performance is still under pressure.

The high-end Chinese market is strong, Korean cosmetics are growing rapidly in the European and American markets, and there is still room for growth in emerging markets.

① The sales growth rate of international leaders in the Chinese market, especially high-end brands, has rebounded: According to L'Oréal/Estée Lauder management, the 26H1 Chinese beauty market has grown by about 1% to 2%. Among them, the high-end market is expected to reach a high order growth rate, while the mass market is weak; L'Oréal and Estée Lauder have increased their online channel layout since 26Q1, all achieved high to low growth rates. Among them, L'Oréal Jakarta Douyin and expanded low line penetration; Furthermore, since 2Q26, the integration of domestic duty-free operators has gradually been completed, and Estée Lauder brands such as Estée Lauder, Gauss, and Coty have all received feedback The restoration of the travel retail channel brought growth.

② Korean cosmetics and effective skincare performance is strong in the European and American markets: APR's revenue in North America and Europe increased by 261% and 363% respectively, and L'Oréal's dermatology and beauty business is growing faster in North America and Europe.

③ Emerging markets: In South Korea and Japan, Shiseido and Amorepacific have improved their local growth rates, L'Oréal/Unilever has maintained a single to low growth rate in Latin America, India, etc., and consumer demand in the Middle East is weak due to geographical conflicts.

The efficacy rate is leading, and the high-end is superior to the public; the growth rate of perfume is excellent, skin care repair, makeup and personal care differentiation:

1) Sub-positioning: Since this year, efficacy products have continued to perform well. L'Oréal and Beiersdorf's efficacy business is leading the growth rate; at the same time, high-end businesses are superior to VW. L'Oréal and Estée Lauder's high-end businesses have achieved medium unit growth and Q2 is faster than Q1, while the growth rate of Volkswagen cosmetics lines under pressure under pressure from NIVEA and Coty.

2) By category: Perfume led the growth rate among all categories, with Estée Lauder and ULTA perfumes growing in double digits and faster than other categories; the Q2 growth rate of various companies in the skincare category rebounded from Q1; while the Q2 growth rate of makeup and personal care foundries recovered sequentially, but the Q2 growth rate of companies such as Procter & Gamble slowed.

Leading brands strengthen brand launch and improve management efficiency to keep SG&A stable.

Since this year, sales rates for international beauty companies have been declining steadily and cost structures have been optimized. Among them, the L'Oréal/Shiseido/Coty 26H1 brand and advertising-related rates were +0.7/+0.5/+1.2ppts, respectively, reaching the highest level in recent years. Estée Lauder's FY26 consumer investment increased 7%; at the same time, companies reduced personnel and improved organizational efficiency, and L'Oréal's IT and AI organizations improved efficiency. Shiseido 26H1 achieved personnel-related SG&A rates through structural reforms/natural staff reduction/outsourcing fee reduction, etc. 2.0 ppts

Risk factors:

Optional consumption is greatly affected by residents' spending power; the increase in product power and brand power of local brands falls short of expectations; the risk of concentrated sales on e-commerce platforms; major changes in marketing channels; the risk of continuing increases in online sales expenses; and industry competition increases the risk.