Bare Escentuals Is Well-Positioned in a Weak Economy

Despite softening consumer spending, natural cosmetics company Bare Escentuals is somewhat insulated as demand for cosmetics continues to remain relatively strong, an analyst said Tuesday.

Lazard Capital Markets analyst Jacklyn S. Rider, who rates the stock “Buy,” said cosmetics are still selling at department stores.

“We continue to believe that the cosmetics category is more resilient than others,” Ms. Rider said in a client note.

Ms. Rider also thinks Bare Escentuals will gain from low inventory and new products, such as its RareMinerals moisturizer. A gift card may also give holiday sales a boost, Rider added.

“We continue to see demand for the product,” she said.

The company’s business will likely be pressured for several quarters, but 2009 will be the “low-water mark” for earnings and sales, Ms. Rider said.

Last month, Bare Escentuals said fiscal third-quarter profit rose 12 percent, but results missed Wall Street expectations.

Shares of the company have fallen 82.8% so far this year.