E.l.f. Beauty CFO says the lipstick index is alive and well

Reports of the death of the lipstick index are greatly exaggerated—at least for some beauty companies.

The tried-and-true economic indicator isn’t going away, according to e.l.f. Beauty CFO Mandy Fields, but it might be changing slightly in 2026.

First coined by Estée Lauder chair Leonard Lauder in the 2000s, the “lipstick index,” which posits that consumers will continue to spend on affordable luxuries like lipstick even amid economic downturns, was increasingly called into question last year, particularly as sales slumped at some bigger companies.

“Beauty generally is a resilient category,” Fields told CFO Brew. “It’s not going anywhere. It is one of those categories that has had consistent growth.”

But that doesn’t mean the lipstick index will mean exactly the same thing in 2026.

“We just saw the ADP labor data, [and it’s] just kind of a stagnant labor market right now—not so much firing, not too much hiring,” Fields explained. “If people are not feeling like there are a lot of opportunities for additional income to come in, they’re going to be more choiceful with their dollars.”

That will translate to changes in beauty spending, too, she continued. “Are you going to be spending on prestige [brands]? Are you spending at mass [market stores]? Are you going to the dollar channel? Where people buy will vary depending on their income, and their sentiment on where things are going.”

Value add. Fields said the cosmetics and skincare company “stand[s] to benefit from that,” thanks to an intentional emphasis on value.

Three quarters of e.l.f.’s portfolio costs $10 or less, according to Fields. “We really sit in a great position to be there for the consumer when they have to make choices with their dollars,” she said, touting a new $5 concealer as a “key innovation,” considering that “a prestige product is over 30 bucks.”

Fields cites the brand’s value proposition as one of three key factors that has helped e.l.f. increase its market share. The company’s Q3 2026 earnings report cited “130 basis points of market share gains,” marking the 28th straight quarter of market share gains for the company.

Fields also cited innovation and community engagement, which keeps “our ear to the ground” to ensure e.l.f. is “introducing the right innovation,” as well as a well-oiled “marketing engine,” as key ingredients in the company’s ability to gain market share.

Acquired taste. e.l.f. Beauty’s careful acquisition strategy also benefited the company in its most recent quarter.

In 2025, e.l.f. acquired Rhode, the popular skincare brand spearheaded by Hailey Bieber, and in Q3, Fields said the company was “seeing the payoff everywhere.”

“We are raising our guidance for the year behind the strength that we’ve seen overall, really primarily driven by Rhode,” Fields noted. “Previously, we thought Rhode would be about $200 million of contribution to the year, and now we’ve raised that to $260 million to $265 million for the year. On an annualized basis, that would be a 70% growth rate on Rhode.”

Yet for all the payoff, Fields stresses that e.l.f plans to stay “thoughtful on the acquisition front.” Besides Rhode in 2025 and skin care brand Naturium in 2023, e.l.f. hasn’t “been very active,” and plans to stay that way, Fields said.

“If we find things that fit in our criteria, that are high growth, profitable, have a lot of white space ahead of them, fit culturally—that’s one of the most important things—then perhaps we’ll go after it,” she said. “But we’re really not actively looking. We’ll evaluate things as they come through.”