Despite record-high inflation, recession fears and rising rates of interest, the sweetness sector is cautiously optimistic a couple of successful holiday season within the U.S.

As has been seen in previous downturns, resembling the 2008 financial crisis, while there was trade down, generally nobody leaves beauty — and thus far major beauty firms haven’t yet reported evidence of trade down, with the prestige sector booming.

“Looking ahead, we see some but not much downside risk to the sweetness segment; indeed, we predict the category shall be one among the winners over the lucrative holiday period,” Neil Saunders, managing director of GlobalData, said.

He noted that while the “lipstick effect” — the speculation coined by beauty mogul Leonard A. Lauder that beauty sales increase during tough economic times — looks as if a cliché, it relies on a truth that remains to be relevant. “Namely that buyers are very reluctant to present up little beauty treats and indulgences and, indeed, feel like these are deserved rewards for living through a harder time. Outside of indulgences, it’s also the case that many beauty and skincare routines are very much embedded into people’s lives so there’s great reluctance to reduce on any of the products related to them.”

Olivia Tong, an analyst at Raymond James, added that retailers generally seem like optimistic in regards to the holiday season, but are being prudent in a few of their guidance as “it shouldn’t be the simplest of times right away.”

As for the businesses themselves, the Estée Lauder Cos. Inc.’s executive vp and chief financial officer Tracey Travis told WWD, “We feel really good going into the vacation season,” adding that it’s going to have some great holiday promotions and holiday gift sets.

Its recent full-year sales forecast got here in below analysts’ estimates, but much of that was right down to COVID-19 lockdowns in China.

Ulta Beauty, meanwhile, raised its outlook for fiscal 2022, now expecting net sales within the region of $9.65 billion to $9.75 billion, up from $9.35 billion to $9.55 billion. Diluted earnings per share are expected to be $20.70 to $21.20, up from $19.20 to $20.10.

The corporate noted, nonetheless, that it expects the environment to be more competitive and more promotional this holiday season than it was a yr earlier.

During a call with analysts, chief executive officer Dave Kimbell said: “As we glance to the longer term, we all know there shall be challenges, particularly with the wide-ranging impact of rising inflation, each on our business and our guests. But we remain confident within the resilience of the sweetness category and our ability to guide the sweetness category and drive long-term profitable growth.”