Top Cosmetic Stocks

Beauty products may seem like one of the trappings of modern life, but they are thousands of years old, dating back to ancient Egypt. For millennia, humans have used products to moisturize their skin or improve their appearance. Over time, cosmetics have gone from being largely homemade products to big business.

Global brands and online startups vie for market share in an industry that benefits from being recession-resistant as a subsector of consumer staples -- products such as groceries or cleaning supplies that consumers purchase regardless of the state of the overall economy. Since many cosmetics brands are luxury products as well, the sector functions as something of a hybrid between consumer staples and luxury, offering the benefits of each one.

The hybrid nature of cosmetics, along with a fast-growing market in China and the accelerating effect of social media platforms such as Instagram on the demand for beauty products, makes cosmetics an appealing space for investors.

Estée Lauder (EL -1.51%) is an industry stalwart and historically a top performer. The company dates back to the postwar era, but it has evolved to become an industry powerhouse with a wide range of attractive brands.

Estée Lauder's brands include La Mer, Bumble and Bumble, and Aveda. The company has found a booming market for its high-end skincare products, though more recently, it's struggled with a slowdown in China and was forced to cut its dividend.

In fiscal 2025, which ended in June 2025, revenue fell 8%, and adjusted earnings per share declined from $2.59 to $1.51. However, its turnaround efforts under new CEO Stephane de La Faverie seem to be paying off to start fiscal 2026 as sales and EPS rose.

The company announced a plan to improve gross margin, lower costs, and accelerate growth, which is starting to yield results. It's also growing again in China, a key market for the company.

2. Coty

Coty (COTY +1.82%) has struggled since its $12.5 billion acquisition of Procter & Gamble's (PG +0.86%) beauty business in 2015, which included Cover Girl and dozens of other mass-market brands. However, consumer demand has drifted away from the mass market and toward the prestige segment, making Coty a loser over the past several years.

The company is now in the midst of a turnaround. It sold off its professional hair care business, Wella, to raise money to pay down debt incurred from the P&G deal. The deal helped to make the company more profitable and financially nimble. It also cut 700 jobs.

German conglomerate JAB Holdings now has a majority stake in the company at around 60%, indicating it thinks the stock will be a winner. It's brought in a new CEO and has looked to social media to fuel its growth. Coty also bought a 51% stake in Kylie Jenner's beauty company, Kylie Cosmetics, forming a strategic partnership with the Kardashian family member.

However, its momentum stalled in 2025 as organic sales were down 2% and adjusted EPS fell 41% to $0.22. Management is focused on turning the company into a prestige brand, but that seems like it's going to take longer than expected.

3. Ulta Beauty

Ulta Beauty (ULTA +0.66%) offers a unique opportunity among cosmetics stocks. The company is a retailer of beauty products, with stores found in strip malls across the country. Its hair salons also help drive traffic into its stores, giving the company an advantage over other brick-and-mortar retailers.

The company has put up steady comparable sales growth over its history, and the stock has been a winner, bouncing back from earlier challenges under new CEO Kecia Steelman with the help of a new loyalty program. Ulta also signed a deal with Target (TGT +1.50%) to open 100 stores inside Target locations over the coming years, providing another avenue for growth for the company.

It seems to be recovering from the worst of its 2024 headwinds, with comparable sales improving and the stock recovering. Considering the broader tailwinds in cosmetics and the company's unique business model, Ulta seems poised for continued growth.

By far the biggest cosmetics company in the world, L'Oreal (LRLCY -0.85%) has a global reach and a diverse array of brands, including licensing deals with brands such as Diesel, Giorgio Armani, and Yves Saint Laurent.

L'Oreal has been aggressively investing in e-commerce, a channel that has been gaining share in the overall cosmetics market. It has introduced tech tools such as virtual try-on, shifted marketing spending to social media, and tapped into social commerce, enabling shopping directly on social media platforms. It's seen a continued shift to online sales, especially in emerging markets.

Sales rose 3% on a comparable basis in the first half of 2025, gaining market share in fragrances and hair care, reporting double-digit growth in emerging markets, and continuing to grow in the third quarter.

L'Oreal posted an operating margin of 21.1% in the first half of 2025, a testament to the strengths of its brands, smart management, and balanced diversification strategy.

5. E.l.f Beauty

E.l.f. Beauty (ELF +0.76%) was a breakout winner for much of 2024 as the company posted dramatic growth, capitalizing on a new Gen Z customer base that's looking for quality at an affordable price. The company's commitment to vegan and cruelty-free products also resonates with the younger generation.

Its growth has moderated, but the company is still gaining market share and has done so for 27 quarters in a row. E.l.f. also enjoys wide gross margins, though it spends aggressively on marketing and digital expenses.

E.l.f. stock is expensive at a price-to-earnings (P/E) ratio of 62, but the numbers above show why it's the most exciting growth story in the cosmetics industry today.

6. Interparfums

Interparfums (IPAR +0.89%) has one of the more unique business models in the cosmetics industry.

The company partners with luxury brands, licenses their brands, and develops fragrances under their names. It also benefits from an asset-light model since it doesn't own any manufacturing facilities and relies on independent suppliers to make its products.

The model has delivered huge returns for early investors, and the company expects to deliver steady growth over the next decade, forecasting a compound annual growth rate (CAGR) of 6%.

Through the first three quarters of 205, revenue increased 1%, and EPS was flat, though it's still generating strong operating margins of 22%.