The cosmetics industry makes consumer beauty products such as makeup, lotions, shampoos, perfumes, hair colors, and accessories. Companies in this group include Revlon Inc. (REV), Inter Parfums Inc. (IPAR), and South Korea-based Amorepacific Corp. (090430). Although there is no direct benchmark for the cosmetics industry, most cosmetics companies are considered part of the consumer staples sector.
Cosmetics stocks, represented by the Consumer Staples Select Sector SPDR ETF (XLP), have dramatically underperformed the broader market. XLP has provided investors with a total return of 13.4% over the past 12 months, well below the Russell 1000's total return of 46.9%. These market performance numbers and the statistics in the tables below are as of March 9, 2021.
Here are the top 3 cosmetics stocks with the best value, fastest growth, and the most momentum.
These are the cosmetics stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Cosmetics Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Kao Corp. ( KAOOY)||13.33||32.1||26.5|
|Beiersdorf AG ( BDRFY)||20.35||23.1||36.0|
|L'Oréal SA ( LRLCY)||74.20||207.7||51.1|
- Kao Corp.: Kao is a Japan-based manufacturer of household and chemical products. In addition to cosmetics, the company also sells laundry and cleaning products, hygiene, fatty chemicals, and edible oils. Kao announced in early February financial results for its 2020 fiscal year (FY), which ended December 31, 2020. Annual net income fell 14.8% as net sales declined 8.0%. The company said that its business was impacted by temporary store closures and government restrictions due to the COVID-19 pandemic.
- Beiersdorf AG: Beiersdorf is a Germany-based company focused on personal care products and cosmetics. It sells skin and hair care products, deodorants, shampoos, bandages, sunblock lotions, and more.
- L'Oréal SA: L'Oréal manufactures cosmetics, including mascara, lip gloss, lipstick, foundation, eyeshadow, nail polish, as well as skin, hair, and body care products. The company announced in early February financial results for FY 2020, which ended December 31, 2020. Operating profit fell 6.1% as sales declined 6.3%. The company's net profit after non-controlling interests fell 5.0%. L'Oréal said that the pandemic caused a temporary decline in demand for beauty products.
These are the cosmetics stocks with the highest year-over-year (YOY) earnings per share (EPS) growth or lowest EPS decline for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model.
|Cosmetics Stocks with the Most Profit Growth or Least Profit Decline|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|The Estée Lauder Companies Inc. ( EL)||280.02||101.6||55.9|
|Kao Corp. (KAOOY)||13.33||32.1||-22.8|
|Ulta Beauty Inc. ( ULTA)||339.05||19.1||-41.3|
- The Estée Lauder Companies Inc.: Estée Lauder is engaged in the manufacture and marketing of a wide range of skin care, makeup, fragrance, and hair care products. The company announced in early February financial results for Q2 FY 2021, which ended December 31, 2020. Quarterly net earnings rose 56.3% as net sales grew 5.0%. Earnings were boosted by lower total operating expenses compared to the year-ago quarter. Estée Lauder said that the pandemic continued to cause disruptions, including by affecting retail traffic and consumer preferences for certain products.
- Kao Corp.: See above for company description.
- Ulta Beauty Inc.: Ulta Beauty operates a chain of beauty stores throughout the U.S. The company sells cosmetics, skin and hair care products, fragrances, and salon services.
These are the cosmetics stocks that had the highest total return over the last 12 months.
|Cosmetics Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|e.l.f. Beauty Inc. ( ELF)||26.33||1.3||87.5|
|The Estée Lauder Companies Inc. (EL)||280.02||101.6||58.4|
|Ulta Beauty Inc. (ULTA)||339.05||19.1||43.9|
|Consumer Staples Select Sector SPDR ETF (XLP)||N/A||N/A||13.4|
- e.l.f. Beauty Inc.: e.l.f. Beauty provides mainly low-priced cosmetics products for the eyes, lips, and face. It offers eyeliners, lipsticks, powder, skin care products, and more. The company announced in early February financial results for Q3 FY 2021, which ended December 31, 2020. Net income fell 46.3% despite net sales rising 9.7%. Earnings were adversely impacted by selling, general and administrative expenses rising at a much faster rate than net sales.
- The Estée Lauder Companies Inc.: See company description above.
- Ulta Beauty Inc.: See company description above.
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YCharts. "Financial Data." Accessed Mar. 10, 2021.
Kao Corp. "Consolidated Financial Results for the Fiscal Year Ended December 31, 2020 [IFRS]," Pages 1 & 4 (PDF). Accessed Mar. 10, 2021.
L'Oréal SA. "2020 Annual Report." Accessed Mar. 10, 2021.
The Estée Lauder Companies Inc. "The Estée Lauder Companies Reports Outstanding Fiscal 2021 Second Quarter Results." Accessed Mar. 10, 2021.
e.l.f. Beauty Inc. "e.l.f. Beauty Announces Third Quarter Fiscal 2021 Results." Accessed Mar. 10, 2021.