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.

2. Coty

Coty (COTY -1.86%) has struggled since its $12.5 billion acquisition of Procter & Gamble's (PG -0.77%) 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

By far the biggest cosmetics company in the world, L'Oreal (LRLCY +0.21%) 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