There's a theory that in recessions, women will still splurge on lipstick, even as they forgo more expensive luxuries. Of course, many people are wondering if this recession is different in many ways, and news today from Elizabeth Arden (NASDAQ:RDEN) and Estee Lauder (NYSE:EL) may cause investors to wonder if even a tube of lipstick is too decadent these days.

Elizabeth Arden and Estee Lauder shares are getting whacked today after both companies cut expectations. Of course, it's not surprising that the weak holiday season that ravaged retailers has also left some consumer goods companies in the lurch.

Estee Lauder now expects fiscal 2009 earnings of $1.30 per share to $1.60 per share; that's painful, considering its previous forecast was for earnings of $2.20 per share to $2.50 per share.

Elizabeth Arden cut its fiscal 2009 guidance to $0.94 per share to $1.07 per share (not taking into account a hit of $0.23 per share related to currency). It had previously forecast earnings of $1.50 per share to $1.75 per share (excluding $0.08 per share for currency impact).

The cosmetics industry faces extreme rivalry and trendiness in good times, but of course it can also suffer in bad times, and it looks like the suffering has begun. Relative newcomer Bare Escentuals (NASDAQ:BARE) has plunged over recent months, as growth hasn't been quite as heady as people expected, especially with the recessionary environment at work.

Could Estee Lauder and Elizabeth Arden be good stock opportunities right now, given today's drubbing? (As of this writing, Elizabeth Arden shares are down nearly 40%.) Personally, I'd look elsewhere.

While Estee Lauder does strike me as a formidable industry leader, given its stable of quality brands, its debt levels turn me off. Its total debt-to-equity ratio is 83%, and lately I find myself pretty adverse to investing in heavily indebted companies.

Meanwhile, I view Elizabeth Arden as a secondary player in a crowded field -- after all, there's not only Estee and Bare Escentuals, but also everybody from Revlon (NYSE:REV) to Avon (NYSE:AVP) to Mary Kay. Elizabeth Arden may be a heck of a lot cheaper than it was yesterday, but its debt-to-equity ratio is also high -- 135%.

The lipstick-in-a-recession theory (which, interestingly enough, was observed by Estee Lauder's Leonard Lauder in 2001) may not apply now -- after all, the consumer spending frenzy was all about the bubble, so that probably means ladies were already buying way too much lipstick ... and foundation ... and mascara ... and eyeshadow ... you get the picture. Thus, I don't think shares of Estee Lauder and Elizabeth Arden will enhance your portfolio anytime soon.

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.