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US beauty shoppers are becoming more price conscious, even as overall spending continues to increase. The lipstick effect may have lost some of its punch, but it continues to support steady beauty sales. We expect US cosmetics and beauty sales to grow a relatively sedate 2.4% this year on strength in the hair and skincare categories.

North America was a bright spot for L鈥橭r茅al鈥檚 otherwise mixed Q2. Like-for-like sales in the region rose 8.3% YoY, more than twice the consensus estimate of 4%. L鈥橭r茅al鈥檚 bullishness about the health of the beauty sector is decidedly at odds with some of its peers. That doesn鈥檛 mean its optimism is entirely misplaced: L鈥橭r茅al is better positioned than its peers to capitalize on the beauty ecommerce boom, while its local manufacturing model significantly reduces its exposure to tariffs.

As consumers trade traditional search engines for social feeds, brands are approaching these platforms as drivers of brand awareness and conversion. TikTok Shop has rapidly become the eighth-largest beauty retailer in the United States, according to a February report from NielsenIQ. 41% of Gen Z turns to social platforms first for finding information, ahead of search engines (32%), AI chatbots (11%), and friends and family (9%), according to a May Sprout Social survey.

The Q2 performances of Amazon, Walmart, and Target illustrate the retailers鈥� diverging fortunes as shoppers reassess their spending priorities. While uncertainty is funneling more dollars toward Amazon and Walmart, customers are steering clear of Target鈥攄ue both to a lackluster assortment and frustration over its diversity, equity, and inclusion (DEI) flip-flopping. Walmart and Amazon are pulling ahead as their relentless focus on value鈥攊n the form of speed, selection, and convenience鈥攎ake them the first stop for shoppers buying everything from essentials like groceries to discretionary items like beauty and apparel. That leaves Target鈥檚 new CEO, Michael Fiddelke, with the unenviable task of having to turn the retailer around just as tariffs threaten its bottom line and undermine its core discretionary business.

Louis Vuitton鈥檚 forthcoming beauty launch will test its pricing power. The brand is betting that premium packaging and high-quality products designed by makeup maven Pat McGrath will convince shoppers to spend $160 on a single lipstick鈥攁 risky assumption given the headwinds plaguing the luxury industry. In order for La Beaut茅 Louis Vuitton to succeed, the brand will have to prove to customers that its products are worth the hefty price tag. That鈥檚 easier said than done, given waning enthusiasm for premium beauty and the growing popularity of low-cost dupes.

The news: Save A Lot introduced a new Hispanic-focused store format鈥攊ts second鈥攊n partnership with Leevers Supermarket as it explores ways to build deeper connections with Hispanic consumers. The takeaway: The rationale for opening these stores is clear: Hispanic consumers wield increasing buying power and account for an outsize share of growth in categories like CPG, beauty, and food and beverage. By targeting these shoppers with formats and products best suited to their needs, grocers can win lasting loyalty.

E.l.f. Beauty strikes $1 billion deal to acquire Hailey Bieber鈥檚 Rhode: The move could reignite slowing growth and boost its appeal to Gen Z and more affluent shoppers.

A lot happens in a week, so every Friday we're going to analyze all the new data and provide you with some of the key takeaways. Welcome to the Friday 5. This week, the economic blackout day made an impact, ecommerce buoys beauty, and luxury spending continues.