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 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.

With one quarter left in fiscal 2025, Estée Lauder expected revenue to fall 8% to 9% for the full year, and adjusted earnings per share of $1.33-$1.58, down from $2.59.

The company has also announced a profit recovery and growth plan intended to improve gross margin, lower costs, and accelerate growth, but it's yet to yield results. A turnaround will be difficult to achieve as long as China is struggling, and trade tensions have added to the company's challenges.

2. Coty

Coty has struggled since its $12.5 billion acquisition of Procter & Gamble's (PG +0.23%) 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, and that has made Coty a loser over the past several years.

The company is now in the midst of a promising turnaround. It sold off a majority stake in Wella, its professional hair care business, 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 as part of its "All in to Win" initiative.

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 also brought in a new CEO and has looked to social media to fuel its growth. Coty bought a 51% stake in Kylie Jenner's beauty company, Kylie Cosmetics, forming a strategic partnership with the Kardashian family member.

The company returned to growth in fiscal 2024 with 11% organic revenue growth, driven by the prestige segment, and it posted solid growth on the bottom line as well. However, its momentum stalled through the first three quarters of 2025 as organic sales were flat.

Investors still seem skeptical of the recovery, but its adjusted operating income improved by 4% through the first three quarters, a positive sign.

3. Ulta Beauty

Ulta Beauty 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 that other brick-and-mortar retailers don't have, as well as an edge over other beauty retailers such as Sephora.

The company has put up steady comparable sales growth over its history, and the stock has been a winner, though 2024 was a challenging year for the company as it faced competition from mass-market retailers like CVS (CVS -0.34%) and Kohl's (KSS -5.61%). Ulta also signed a deal with Target (TGT -0.76%) to open 100 stores inside Target locations over the coming years, providing another avenue for growth for the company. Despite its recent challenges, Ulta still has a number of competitive advantages, including its superstore retail format, loyalty program, wide selection, and hair salons.

It seems to be recovering from the worst of the headwinds in 2024 as comparable sales improved and the stock recovered.

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 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. It's seen a continued shift to the online channel, 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, and reporting double-digit growth in emerging markets.

L'Oreal continues to deliver strong margins as well, with an operating margin of 21.1%, a testament to the strengths of its brands, smart management, and balanced diversification strategy.

5. E.l.f Beauty

E.l.f. Beauty 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 26 quarters in a row. E.l.f. also enjoys wide gross margins, though it spends aggressively on marketing and digital expenses, as well as some other operating expenses.

E.l.f. is expensive, but the numbers above show why it's the most exciting growth story in the cosmetics industry today.

6. Interparfums

Interparfums 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.

That 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%.

Interparfums continues to add new brands, bringing on Lacoste in 2024, and it's set to add Goutal and Off-White in 2026, with Longchamp following in 2027.

Revenue rose 10% to $1.45 billion in 2024, showing the company is outgrowing its peers in the cosmetics industry.