Given slow drip inflation, a worrisome jobs market, and student loan repayments, we were pleasantly surprised that trends for both Lux and mass beauty have recently improved after a soft ’24 and 1H’25 per the Q3 results from L’Oréal, LVMH, Estée Lauder, and Procter & Gamble. Encouragingly, we also see the improvement in observed traffic and spend at Ulta. What’s going on? And what does it mean for the category’s big season ahead?

Chili’s outstanding market share gains continues with FQ1 comp-traffic gaining +13% which drove a similar gain QoQ in the 3-year comp CAGR (+4.2%). (Brinker’s fiscal quarter ended September 24th.) Price and mix each added 4 pts, taking the comp-sales increase to 21.4%. As a reminder, industry sales growth is only +4% range*, and so, Chili’s is 5X that. FQ1’s strong comps also drove robust increases in margins and earnings, with Chili’s restaurant operating margin hitting 17.

Well, Starbucks’ US comp-sales were not down -1% as investors feared, but flat for the quarter, which was a +200bps QoQ improvement. Additionally, the comp was not driven by more pricing as average check decelerated -100bps QoQ to only contribute +100bps YoY. Comp-traffic/transaction was the driver, improving from -4% to -1%, or around +300bps QoQ. That 300bps increase was ahead of observed traffic (Advan), which strengthened by +80bps. (Others were suggesting a -160bps QoQ deterioration.

With Tesla’s earnings call, we got a better understanding of why production has remained firm despite the lapse in the $7500 EV tax credit. (See our prior reports on Q3 production / demand here and here .) Elon Musk, “I think that Tesla has the highest intelligence density of any AI out there in the car, and that is only going to get better. And we’re really just at the beginning of scaling at quite massively full self-driving and Robotaxi and fundamentally changing the nature of transport.

Tractor Supply (TSCO) reported solid top- and bottom-line results for Q3. (TSCO’s Q3 ended on September 27th.) Comp-sales increased +3.9%, driven by comp-transactions +2.7%. Adding in the contribution from new stores, sales increased +7.2%. That increase, plus slightly higher margins, lifted gross profits by +7.7%. The mid-point of guidance puts the Q4 comp in the range of +3.0%. In terms of the quarter cadence, CEO Hal Lawton shared, “We saw a strong start to the quarter with spending trends moderating into September.

Last week, we had the opportunity to present our views and data on the US consumer at the National Association for Business Economics’ Annual Meeting (the Chair Jerome Powell event). We shared that the “right upward arm” of our K-shaped economy had picked up sharply since early August (presentation here ) and we expected that to continue through year-end should the stock market carry on strongly. (Our loyal readers will know that the high-end is why we believe that September retail sales were stronger as well.

The 6th issue of The Advan Buysider is now available. We’ve changed up what we are presenting and approaching it more as sector coverage. #6 added packaging (AMCOR / SEE / AVY), metals (NUE / STLD), and food distribution (SYY / USFD). As a reminder, The Buysider is designed to provide timely, novel, and impactful insights on specific names and topics using Advan’s data. The takeaways from all the updates:

Two developments of importance this week to the eating / food industry that we wanted to weigh in on, Albertsons’ quarterly results and General Mills’ investor day. The net-net is that the underlying cyclical and secular headwinds are intensifying for both the grocery and the limited-service restaurant industries. Albertsons Companies delivered a +2.3% comp-sales increase for all its banners. However, excluding inflation and GLP drugs (weight loss), grocery sales on a “real” basis fell -2.

As we previewed last week, high-end consumer spending in the US accelerated during Q3, which drove better retail sales for September and which we see in LVMH’s much better organic revenue growth for the quarter. Moreover, we also take Dollar Tree’s reiteration of its guidance and **Domino’**s very strong Q3 US Comps (+5.2%) as added evidence that there has not been a material degradation in spending by the less-affluent (despite market fears that there was and some data pointing to degradation).

Download deck