The weak U.S. dollar, which already negatively impacted international beauty companies’ sales in 2025, looks likely to erode further in the new year, to possible serious effect.
Last year the currency, which represents big business for strategics and indies alike, registered the weakest performance among all major currencies worldwide. The euro, for instance, gained about 13.7 percent in the year against the dollar.
The United States is a massive trading ground for many beauty companies. North America is for L’Oréal — the world’s biggest beauty maker — its second-largest geographic market.
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In the first nine months of 2025, currency fluctuations had a negative impact of 2.8 percent for the company, which said that if the exchange rates on Sept. 30 (1 euro to $1.173) was extrapolated until Dec. 31, forex’s hit on sales would be at around minus 3.8 percent for the entirety of 2025.
Interparfums SA, meanwhile, in July adjusted its full-year sales guidance downward to the lower end of the initial range due to the euro’s appreciation against the dollar since spring. In mid-November, the company readjusted them downward again, and said its sales in 2026 are likely to be impacted by a probable adverse economic and geopolitical environment, and a negative euro-dollar exchange rate to the tune of around 20 million euros, among other factors.
The dollar’s weakening spurs inflation in the U.S., as imported goods become more expensive for consumers and business there. Concurrently, most consumers’ income is not increasing at pace as product prices rise.
Many beauty companies increased their product pricing during 2025. Spain’s Puig, for one, upped prices in August 2025 by midsingle-digits.
But it’s not just European beauty companies affected by the weak dollar. Many groups based in Latin America, the Middle East and Africa, as well as parts of Asia, invoice in dollars. So they, too, could be obliged to raise product prices further, while consumers are already showing price resistance. This is a challenge for brands overall.
“The pressure is mounting across all price tiers to justify pricing: 83 percent of consumers surveyed feel hair care is affordable, but that figure drops to 67 percent for fragrances,” wrote McKinsey in its “State of Beauty 2025” report.
“To cut through the noise, brands will need to increase their investments in consumer segmentation, emphasize their unique value drivers in marketing campaigns, and create entry points for aspirational and increasingly discerning beauty shoppers alike,” McKinsey added.
Simultaneously, the weak dollar makes brands made in the U.S. more competitive with their international counterparts, which is part of President Donald Trump’s America First agenda.
“The impact of the weakness of the dollar will be higher than the impact of the [import] tax,” said Eric Henry, founder of EH4B consultancy.
Looking ahead, the dollar’s softening shows no sign of stopping, according to some experts.
“The U.S. dollar has another difficult year ahead of it,” wrote Georgette Boele, senior FX and precious metals strategist at Bethmann Bank, ABN Amro’s private banking arm, in a recent report. “Our forecast is that U.S. monetary policy and the U.S. budget and current account deficits will weaken the dollar.”
Others wonder whether there might be a shift in U.S. fiscal policy, with interest rates increasing, over the next six months, spurring the dollar to recover. That would help ease beauty business’ forex woes.