Top Cosmetics Stocks

ULTA, OLPX, and ELF are top for value, growth, and performance, respectively

The cosmetics industry makes consumer beauty products such as makeup, lotions, shampoos, perfumes, hair colors, and accessories. Companies in this group include Revlon Inc., Inter Parfums Inc., and South Korea-based Amorepacific Corp. Cosmetics stocks can be found in both the consumer staples and consumer discretionary sectors, with the former including consumer staples companies that also sell cosmetics and the latter including dedicated high-end cosmetics companies.

Over the last year, the S&P 500 Consumer Staples Sector Index has provided investors with a total return of 3.6%, while the S&P 500 Consumer Discretionary Sector Index has returned -14.1% over the past 12 months. By comparison, the Russell 1000 has returned -12.5%. Note that these sectors are not benchmarks for the cosmetics industry, but they can be used to get an idea of cosmetics stocks' performance. Both sectors include a much wider array of stocks than just cosmetics names. These market performance numbers and the statistics in the tables below are as of Sept. 19, 2022.

Here are the top 3 cosmetics stocks with the best value, fastest growth, and the best performance.

Best Value Cosmetics Stocks

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
Ulta Beauty Inc. (ULTA) 421.47 21.6 19.7
Beiersdorf AG (BDRFY) 20.41 23.1 28.8
Olaplex Holdings Inc. (OLPX) 11.81 7.7 29.5

Source: YCharts

  • 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. on On Aug. 25, Ulta reported financial results for Q2 FY 2022. Net income climbed by 17.8% on rising sales year-over-year (YOY). Ulta said that strong consumer demand and momentum across its businesses helped to fuel gains for the quarter.
  • Beiersdorf AG: Beiersdorf is a German-based beauty company that focuses primarily on developing, manufacturing, and marketing skin and personal care products. Its major skin-care product brands are Nivea, Eucerin, and La Prairie.
  • Olaplex Holdings Inc.: Olaplex Holdings is a beauty company providing premium hair-care products. The company sells its products to salons, individual consumers, and retailers. Olaplex reported Q2 2022 earnings on Aug. 9. Net income surged by 77.7% on strong revenue growth YOY. Olaplex saw strong growth in both domestic and international revenue and across all channels, with it Specialty Retail business growing at the fastest pace.

Fastest Growing Cosmetics Stocks

These are the top cosmetics stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general.

Fastest Growing Cosmetics Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Olaplex Holdings Inc. (OLPX) 11.81 7.7 70.7 38.6
e.l.f. Beauty Inc. (ELF) 39.51 2.1 80.0 26.3
Ulta Beauty Inc. (ULTA) 421.47 21.6 25.0 16.8

Source: YCharts

  • Olaplex Holdings Inc.: See company description above.
  • 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. On Aug. 4, e.l.f. announced the launch of the new Protect Your Light Daily Moisturizer, designed protect the skin against the sun's rays. The product is the first SPF skincare offering of the Keys Soulcare brand. Keys Soulcare is e.l.f.'s brand created by artist and author Alicia Keys.
  • Ulta Beauty Inc.: See company description above.

Cosmetics Stocks with the Best Performance

These are the cosmetic stocks that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at.

Cosmetics Stocks with the Best Performance
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
e.l.f. Beauty Inc. (ELF) 39.51 2.1 31.8
Ulta Beauty Inc. (ULTA) 421.47 21.6 11.2
Coty Inc. (COTY) 7.82 6.6 -6.4
Russell 1000 N/A N/A -12.5
S&P 500 Consumer Staples Sector Index N/A N/A 3.6
S&P 500 Consumer Discretionary Sector Index N/A N/A -14.1

Source: YCharts

  • e.l.f. Beauty Inc.: See company description above.
  • Ulta Beauty Inc.: See company description above.
  • Coty Inc.: Coty is a beauty company offering fragrances, color cosmetics, and skin and body care products. It sells its products in over 130 countries and territories. Coty announced on Sept. 21 that it plans to double skincare sales to between $500 million and $600 million by FY 2025. As part of the plan, Coty will launch new products and expand existing skincare brands.

Impact of COVID-19 on the Cosmetics Industry

The COVID-19 pandemic had a significant impact on the cosmetics industry. With in-person events and shopping largely curtailed early in the pandemic, consumers turned increasingly to purchasing cosmetics products online. This trend has continued even as pandemic-related restrictions have eased. For some global consumers, the pandemic has caused a major shift in how they use beauty products. A survey by market research firm Kantar found that many British women wear less make-up since the onset of the COVID-19 pandemic. In addition to falling store traffic, cosmetics companies have been affected negatively by supply chain disruptions due to the pandemic and its lingering after-effects.

Risks of Cosmetics Stocks

The COVID-19 pandemic demonstrated that beauty trends can change quickly. Even without the impact of the pandemic, many cosmetics consumers expect manufacturers to offer a robust and constantly-improving line of products. This places significant pressure on cosmetics companies to continue to innovate and to accurately assess and predict trends. Because creating and marketing new products is expensive, companies often must take big risks in an effort to keep up with the competition.

The creation and production of cosmetics products also exposes companies to a myriad of risks. Sourcing raw materials can be difficult, for example. And cosmetics companies face a broad range of potential liabilities, such as from possible environmental damage caused by manufacturing products and processes, and if customers experience a safety issue related to a product. Consumers may not think of these risks, but they can impact the earnings, revenue and stock performance of a cosmetics company.

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  1. YCharts. "Financial Data."

  2. Ulta Beauty Inc. "Ulta Beauty Announces Second Quarter Fiscal 2022 Results."

  3. Olaplex Holdings Inc. "OLAPLEX Reports Second Quarter 2022 Results."

  4. e.l.f. Beauty Inc. "Keys Soulcare Introduces its First Daily Moisturizer with SPF30 to Protect Your Light."

  5. Coty Inc. "Coty Sets Out Comprehensive Strategy to Double Skincare Sales by FY25."

  6. National Library of Medicine. "Changes in purchasing patterns in the beauty market due to Post–COVID‐19: Literature review."

  7. BBC News. "Women wear less make-up since the pandemic."

  8. Nasdaq. "4 Cosmetics Stocks Worth Watching on Robust Industry Trends."

  9. Axis. "6 Exposures and Risks That Cosmetics Manufacturers Need to Be Aware Of."

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