The stock price of cosmetics and personal care products retailer Ulta Beauty (NASDAQ: ULTA) roared ahead 24% last week after a stellar earnings report that showed the so-called "lipstick effect" is still at play.
Coined by Estée Lauder's Leonard Lauder, the Lipstick Effect theorizes why some companies, and beauty brands in particular, perform better than expected in times of trouble. The idea was first introduced during the market collapse precipitated by the dot-com bubble and 9/11, and hinged on the idea that consumers who were unable to buy truly upscale products would instead continue to purchase smaller indulgences.
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Source Fool.com