We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Companies within the Zacks Cosmetics industry are facing a rapidly shifting macroeconomic environment, marked by rising external pressure that is dampening consumer demand and weighing on overall sector performance. Weak sales trends are being further affected by escalating production and operational costs, which continue to strain profitability and efficiency.
Despite these headwinds, industry leaders such as The Estee Lauder Companies Inc. (EL - Free Report) , Coty Inc. (COTY - Free Report) and European Wax Center, Inc. (EWCZ - Free Report) are leveraging strategic investments in digital transformation, product innovation and omnichannel engagement.
About the Industry
The Zacks Cosmetics industry includes companies that provide beauty and personal care products. Players in the industry manufacture, distribute, sell and market skincare, fragrance, makeup and hair care products. Many firms in the market sell products via sales representatives, whereas some do the same through retailers, independent and chain drug stores and pharmacies, upscale perfumeries, department stores and beauty salons. These companies also operate through retailer websites, third-party distributors and in-flight and duty-free shops. Some products offered by industry participants include moisturizers, serums, toners and cleansers under skincare; perfume sprays, candles and soaps under fragrance; lipsticks, mascaras, powders, eye shadows, foundation and nail polishes under makeup; and shampoos, conditioners and hair color products under hair care.
Trends Shaping the Future of the Cosmetics Industry
Challenging Economic Conditions: The cosmetic industry is grappling with rising challenges due to an increasingly uncertain economic environment. Ongoing trade tensions, reduced consumer spending and inconsistent retail restocking cycles are reshaping the beauty market. As living costs rise and household savings decline, consumers are prioritizing essential purchases and pulling back on discretionary spending, including cosmetics. This shift in consumer behavior is weakening demand across many beauty brands. At the same time, operational costs are climbing due to higher prices for packaging materials, ingredients, logistics and promotional activities. These rising expenses are putting pressure on profit margins and heightening competition within the industry. Additionally, the potential imposition of new tariffs may further disrupt global supply chains, leading to increased product pricing and additional strain on cosmetic companies already navigating a volatile and competitive landscape.
International Risk Factors: Cosmetic companies with a global presence are exposed to international risk factors, including unfavorable foreign currency fluctuations that can affect revenues and profitability. Geopolitical tensions and political instability may disrupt market access, hinder supply-chain efficiency and affect overall operational continuity. Ongoing geopolitical tensions, trade wars and potential new tariffs, sanctions and regulatory restrictions pose significant challenges. This, in turn, may increase costs and affect product availability across key international markets.
Innovation & Digitization: Innovation and digitization are key growth drivers in the beauty and skincare market. Consumers are increasingly seeking unique products that combine advanced technology with expert scientific formulations. In response to these evolving preferences, cosmetic companies are continuously innovating and introducing new products. The rising consumer interest in organic and clean beauty products has fueled market growth. Enhancing e-commerce capabilities is a key priority, with advancements like virtual try-on tools, seamless digital payment systems and enhanced online marketing strategies gaining traction. In addition, many beauty brands are expanding their product portfolios through strategic acquisitions and partnerships to stay competitive in this rapidly changing industry.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Cosmetics industry is housed within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #165, which places it in the bottom 32% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries leads to a negative aggregate earnings outlook for the constituent companies. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since the beginning of April 2025, the industry’s consensus estimate for current financial year earnings has decreased 6.7%.
Before we present a few stocks that you may want to consider for your portfolio, let’s look at the industry’s recent stock market performance and valuation picture.
Industry vs. Broader Market
The Zacks Cosmetics industry has underperformed the Zacks S&P 500 composite and the broader Zacks Consumer Staples sector over the past year.
The industry has declined 39.6% over this period against the S&P 500’s and the broader sector’s growth of 9.4% and 1.7%, respectively.
One-Year Price Performance
Industry's Current Valuation
Based on forward 12-month Price-to-earnings (P/E), which is commonly used to value consumer staples stocks, the industry is currently trading at 25.69X, compared with the S&P 500’s 21.71X and the sector’s 17.4X.
In the past five years, the industry has traded as high as 41.34X and as low as 20.21X, with the median being 32.17X, as the chart below shows.
Price-to-Earnings Ratio (Past Five Years)
3 Cosmetic Stocks Worth Considering
European Wax Center: The largest and fastest-growing franchisor and operator of out-of-home waxing services in the United States, EWCZ holds a Zacks Rank #1 (Strong Buy) at present. European Wax Center is strategically positioned for long-term growth, supported by a dedicated network of franchise partners and a robust expansion model. The company is focused on increasing guest acquisition, maximizing average ticket value through effective customer retention and reactivation, and enhancing operational efficiency across locations. You can see the complete list of today’s Zacks #1 Rank stocks here.
By implementing innovative marketing campaigns and leveraging advanced technology solutions, European Wax Center is successfully attracting new clients while deepening engagement with existing ones. These efforts are strengthening customer relationships, improving brand loyalty and aiding sustainable long-term growth. The Zacks Consensus Estimate for European Wax’s current fiscal year earnings per share (EPS) has remained unchanged in the past 30 days at 61 cents. EWCZ stock has gained 8.3% in the past six months.
Price and Consensus: EWCZ
The Estee Lauder Companies: This Zacks Rank #3 (Hold) company, a global leader in prestige beauty, develops and markets a diverse portfolio of skincare, makeup, fragrance, and hair care products. The company is actively focused on revitalizing profitability and accelerating long-term growth through its enhanced Profit Recovery and Growth Plan. As part of its forward-looking Beauty Reimagined vision, The Estee Lauder Companies is enhancing product innovation, expanding its presence in high-growth international markets, and strengthening digital and e-commerce channels. The company’s streamlined operations, combined with rising AI integration and successful brand launches, are positioning it as a more agile, consumer-centric brand in the competitive beauty landscape.
The Zacks Consensus Estimate for EL’s current fiscal year EPS has remained unchanged in the past 30 days at $1.47. EL’s shares have gained 5% in the past six months.
Price and Consensus: EL
Coty: A leading manufacturer, marketer, and distributor of beauty products, Coty holds a Zacks Rank #3 at present and is leveraging its brand equity, accelerating digital transformation, and implementing cost optimization initiatives to boost overall performance. The six core pillars of Coty’s growth strategy are stabilizing its Consumer Beauty segment, expanding Prestige fragrances and makeup, building a strong skincare portfolio, and enhancing its e-commerce and Direct-to-Consumer (DTC) channels. The fragrance business remains a key revenue driver, supported by strong consumer demand and innovative product launches. Additionally, Coty’s “All In to Win” cost-saving program is delivering tangible improvements in margin expansion and operational efficiency.
The Zacks Consensus Estimate for COTY’s current fiscal year EPS has remained unchanged in the past 30 days at 29 cents. Coty’s shares have lost 31.5% in the past six months.
Price and Consensus: COTY
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Cosmetic Stocks Holding Steady Despite Market Challenges
Companies within the Zacks Cosmetics industry are facing a rapidly shifting macroeconomic environment, marked by rising external pressure that is dampening consumer demand and weighing on overall sector performance. Weak sales trends are being further affected by escalating production and operational costs, which continue to strain profitability and efficiency.
Despite these headwinds, industry leaders such as The Estee Lauder Companies Inc. (EL - Free Report) , Coty Inc. (COTY - Free Report) and European Wax Center, Inc. (EWCZ - Free Report) are leveraging strategic investments in digital transformation, product innovation and omnichannel engagement.
About the Industry
The Zacks Cosmetics industry includes companies that provide beauty and personal care products. Players in the industry manufacture, distribute, sell and market skincare, fragrance, makeup and hair care products. Many firms in the market sell products via sales representatives, whereas some do the same through retailers, independent and chain drug stores and pharmacies, upscale perfumeries, department stores and beauty salons. These companies also operate through retailer websites, third-party distributors and in-flight and duty-free shops. Some products offered by industry participants include moisturizers, serums, toners and cleansers under skincare; perfume sprays, candles and soaps under fragrance; lipsticks, mascaras, powders, eye shadows, foundation and nail polishes under makeup; and shampoos, conditioners and hair color products under hair care.
Trends Shaping the Future of the Cosmetics Industry
Challenging Economic Conditions: The cosmetic industry is grappling with rising challenges due to an increasingly uncertain economic environment. Ongoing trade tensions, reduced consumer spending and inconsistent retail restocking cycles are reshaping the beauty market. As living costs rise and household savings decline, consumers are prioritizing essential purchases and pulling back on discretionary spending, including cosmetics. This shift in consumer behavior is weakening demand across many beauty brands. At the same time, operational costs are climbing due to higher prices for packaging materials, ingredients, logistics and promotional activities. These rising expenses are putting pressure on profit margins and heightening competition within the industry. Additionally, the potential imposition of new tariffs may further disrupt global supply chains, leading to increased product pricing and additional strain on cosmetic companies already navigating a volatile and competitive landscape.
International Risk Factors: Cosmetic companies with a global presence are exposed to international risk factors, including unfavorable foreign currency fluctuations that can affect revenues and profitability. Geopolitical tensions and political instability may disrupt market access, hinder supply-chain efficiency and affect overall operational continuity. Ongoing geopolitical tensions, trade wars and potential new tariffs, sanctions and regulatory restrictions pose significant challenges. This, in turn, may increase costs and affect product availability across key international markets.
Innovation & Digitization: Innovation and digitization are key growth drivers in the beauty and skincare market. Consumers are increasingly seeking unique products that combine advanced technology with expert scientific formulations. In response to these evolving preferences, cosmetic companies are continuously innovating and introducing new products. The rising consumer interest in organic and clean beauty products has fueled market growth. Enhancing e-commerce capabilities is a key priority, with advancements like virtual try-on tools, seamless digital payment systems and enhanced online marketing strategies gaining traction. In addition, many beauty brands are expanding their product portfolios through strategic acquisitions and partnerships to stay competitive in this rapidly changing industry.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Cosmetics industry is housed within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #165, which places it in the bottom 32% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries leads to a negative aggregate earnings outlook for the constituent companies. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since the beginning of April 2025, the industry’s consensus estimate for current financial year earnings has decreased 6.7%.
Before we present a few stocks that you may want to consider for your portfolio, let’s look at the industry’s recent stock market performance and valuation picture.
Industry vs. Broader Market
The Zacks Cosmetics industry has underperformed the Zacks S&P 500 composite and the broader Zacks Consumer Staples sector over the past year.
The industry has declined 39.6% over this period against the S&P 500’s and the broader sector’s growth of 9.4% and 1.7%, respectively.
One-Year Price Performance
Industry's Current Valuation
Based on forward 12-month Price-to-earnings (P/E), which is commonly used to value consumer staples stocks, the industry is currently trading at 25.69X, compared with the S&P 500’s 21.71X and the sector’s 17.4X.
In the past five years, the industry has traded as high as 41.34X and as low as 20.21X, with the median being 32.17X, as the chart below shows.
Price-to-Earnings Ratio (Past Five Years)
3 Cosmetic Stocks Worth Considering
European Wax Center: The largest and fastest-growing franchisor and operator of out-of-home waxing services in the United States, EWCZ holds a Zacks Rank #1 (Strong Buy) at present. European Wax Center is strategically positioned for long-term growth, supported by a dedicated network of franchise partners and a robust expansion model. The company is focused on increasing guest acquisition, maximizing average ticket value through effective customer retention and reactivation, and enhancing operational efficiency across locations. You can see the complete list of today’s Zacks #1 Rank stocks here.
By implementing innovative marketing campaigns and leveraging advanced technology solutions, European Wax Center is successfully attracting new clients while deepening engagement with existing ones. These efforts are strengthening customer relationships, improving brand loyalty and aiding sustainable long-term growth. The Zacks Consensus Estimate for European Wax’s current fiscal year earnings per share (EPS) has remained unchanged in the past 30 days at 61 cents. EWCZ stock has gained 8.3% in the past six months.
Price and Consensus: EWCZ
The Estee Lauder Companies: This Zacks Rank #3 (Hold) company, a global leader in prestige beauty, develops and markets a diverse portfolio of skincare, makeup, fragrance, and hair care products. The company is actively focused on revitalizing profitability and accelerating long-term growth through its enhanced Profit Recovery and Growth Plan. As part of its forward-looking Beauty Reimagined vision, The Estee Lauder Companies is enhancing product innovation, expanding its presence in high-growth international markets, and strengthening digital and e-commerce channels. The company’s streamlined operations, combined with rising AI integration and successful brand launches, are positioning it as a more agile, consumer-centric brand in the competitive beauty landscape.
The Zacks Consensus Estimate for EL’s current fiscal year EPS has remained unchanged in the past 30 days at $1.47. EL’s shares have gained 5% in the past six months.
Price and Consensus: EL
Coty: A leading manufacturer, marketer, and distributor of beauty products, Coty holds a Zacks Rank #3 at present and is leveraging its brand equity, accelerating digital transformation, and implementing cost optimization initiatives to boost overall performance. The six core pillars of Coty’s growth strategy are stabilizing its Consumer Beauty segment, expanding Prestige fragrances and makeup, building a strong skincare portfolio, and enhancing its e-commerce and Direct-to-Consumer (DTC) channels. The fragrance business remains a key revenue driver, supported by strong consumer demand and innovative product launches. Additionally, Coty’s “All In to Win” cost-saving program is delivering tangible improvements in margin expansion and operational efficiency.
The Zacks Consensus Estimate for COTY’s current fiscal year EPS has remained unchanged in the past 30 days at 29 cents. Coty’s shares have lost 31.5% in the past six months.
Price and Consensus: COTY