A Strong Liptstick Indicator 12/23/25 - Your Money Minute

Summary3 min read

Podcast Summary:

Podcast: Your Money Minute
Episode: A Strong Lipstick Indicator (12/23/25)
Host: Jessica Ettinger (CNBC)
Expert Guests: Courtney Garcia (Pain Capital), Melissa Lee (CNBC)

Episode Overview

In this concise, one-minute episode, Jessica Ettinger explores the "lipstick indicator"—a theory that, even during economic uncertainty, consumers indulge in smaller luxuries like cosmetics. The conversation focuses on recent trends in the beauty retail market, specifically Ulta Beauty's strong performance, and discusses the looming question of how tariff-driven price hikes may impact consumer behavior in the near future.

Key Discussion Points & Insights

1. The Lipstick Indicator and Consumer Behavior

Definition and Context:
- Jessica opens by referencing the lipstick indicator: “When consumers are feeling pinched in the pocketbook, they still spend on something small to feel good, like a lipstick.” [00:04]
- This suggests that even in tighter economic times, consumers find comfort in affordable luxuries.

2. State of the Consumer Market

Current Uncertainty:
- Courtney Garcia observes:
  
  “We have a consumer that everybody’s questioning, right? Like we don't know, is the consumer doing well? Are they not doing well? People are having to choose where they're spending money.” [00:14]
- The consumer outlook is unclear; caution and selectivity are prevailing themes.

3. Ulta Beauty’s Strong Performance

Retail Standout:
- Jessica notes: “Ulta beauty shares hit a record high earlier this month as its customers are shopping. Even if they're only buying little goodies.” [00:21]
- Courtney adds optimism:
  
  “They’re optimistic people are going to keep spending there. And I think all of that is actually a really positive sign for Ulta companies specifically, as we look forward, that's Ulta.” [00:32]
- Ulta is outperforming, likely benefiting from the lipstick effect.

4. Headwinds: Cautious Consumers and Future Price Hikes

Increasing Caution:
- Jessica shares: “Other retailers are saying consumers are being cautious heading into these final days before Christmas, and Ulta may actually have to start raising its prices pretty soon.” [00:40]
- The mood is mixed; some retailers are still worried about spending trends.

5. The Impact of Tariffs on Beauty Products

Tariff Concerns:
- Melissa Lee weighs in:
  
  “They did talk about how beauty brands are going to start raising prices to account for tariff effects. And so you got to wonder, like what, what that impact will be on a tube of lipstick or a jar of cream and what that impact will be on the consumer.” [00:51]
- The full impact of new tariffs has not yet manifested, adding uncertainty.
- Jessica concludes: “The full effect of the tariffs has not hit many American consumer products yet.” [01:04]

Notable Quotes & Memorable Moments

On Consumer Uncertainty:

“We have a consumer that everybody’s questioning, right? Like we don't know, is the consumer doing well? Are they not doing well? People are having to choose where they're spending money.”
— Courtney Garcia [00:14]
On the Lipstick Effect:

“Ulta beauty shares hit a record high earlier this month as its customers are shopping. Even if they're only buying little goodies.”
— Jessica Ettinger [00:21]
On Price Hikes:

“Beauty brands are going to start raising prices to account for tariff effects. And so you got to wonder, like what, what that impact will be on a tube of lipstick or a jar of cream and what that impact will be on the consumer.”
— Melissa Lee [00:51]
On Uncertain Future Impact:

“The full effect of the tariffs has not hit many American consumer products yet.”
— Jessica Ettinger [01:04]

Important Timestamps

00:00 – Jessica introduces the lipstick indicator and frames the discussion
00:14 – Courtney Garcia on consumer uncertainty
00:21 – Ulta Beauty’s record share price, lipstick effect in action
00:32 – Garcia’s optimistic outlook for Ulta
00:40 – Rising consumer caution; retailers eyeing potential price hikes
00:51 – Melissa Lee discusses pending tariff-driven price increases
01:04 – Jessica notes the delayed impact of tariffs

Summary Takeaway

In just one minute, the episode distills the lingering question of U.S. consumer health and highlights how the beauty sector (and Ulta Beauty specifically) is serving as an informal economic bellwether. With tariffs on the horizon, questions about whether the desire for affordable luxuries like lipstick will hold strong—or be tested by higher prices—remain open as 2025 closes.

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Transcript8 lines

[00:00]
Jessica Ettinger
With a CNBC YOUR Money minute. I'm Jessica Ettinger. You've heard of the lipstick indicator. When consumers are feeling pinched in the pocketbook, they still spend on something small to feel good, like a lipstick.
[00:15]
Courtney Garcia
We have a consumer that everybody's questioning, right? Like we don't know, is the consumer doing well? Are they not doing well? People are having to choose where they're spending money.
[00:22]
Jessica Ettinger
Pain Capital's Courtney Garcia on cnbc. Ulta beauty shares hit a record high earlier this month as its customers are shopping. Even if they're only buying little goodies.
[00:33]
Courtney Garcia
They'Re optimistic people are going to keep spending there. And I think all of that is actually a really positive sign for Ulta companies specifically, as we look forward, that's Ulta.
[00:41]
Jessica Ettinger
But other retailers are saying consumers are being cautious heading into these final days before Christmas and Ulta may actually have to start raising its prices pretty soon.
[00:51]
Melissa Lee
They did talk about how beauty brands are going to start raising prices to account for tariff effects. And so you got to wonder, like what, what that impact will be on a tube of lipstick or a jar of cream and what that impact will be on the consumer.
[01:04]
Jessica Ettinger
That's CNBC's Melissa Lee. The full effect of the tariffs has not hit many American consumer products yet. I'm Jessica Ettinger.
[01:13]
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