For Immediate Release
Chicago, IL – September 4, 2026 – Today, Zacks Equity Research discusses The Estee Lauder Companies Inc. EL, e.l.f. Beauty, Inc. ELF, Coty Inc. COTY and Helen of Troy Ltd. HELE.
Industry: Cosmetics
Link: https://www.zacks.com/commentary/2984187/4-cosmetics-stocks-showing-strength-amid-industry-headwinds
Companies within the Zacks Cosmetics industry are navigating cautious consumer spending, trade uncertainties and supply-chain risks. Although beauty demand remains relatively resilient, consumers are becoming more selective and value conscious. Meanwhile, elevated costs for ingredients, packaging, logistics and promotions, along with evolving tariffs and regulations, continue to pressure margins and complicate pricing decisions.
Despite these challenges, The Estee Lauder Companies Inc., e.l.f. Beauty, Inc., Coty Inc. and Helen of Troy Ltd. appear well positioned. Their focus on innovation, brand building, digital capabilities, consumer engagement and operational efficiency should help them adapt to evolving beauty trends and support long-term growth.
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 cosmetics industry continues to face challenges amid an uncertain macroeconomic environment. Ongoing trade tensions, cautious consumer spending and changing retailer inventory patterns are influencing demand across several markets. While beauty products have generally demonstrated resilience, consumers remain value conscious and are increasingly selective in their discretionary purchases.
At the same time, companies face higher costs related to ingredients, packaging, logistics and promotional activities, which may pressure profit margins. Additionally, evolving trade policies, tariffs and potential supply-chain disruptions could further increase costs and influence pricing strategies, creating a challenging and highly competitive operating environment.
International Risk Factors: Cosmetics companies with global operations face a range of international risks, including unfavorable foreign currency movements that can affect revenues and profitability. Geopolitical tensions and political instability may disrupt market access, supply chains and operational continuity across regions. As companies expand across international markets, managing currency exposure, sourcing networks and changing regulatory frameworks remains important to maintaining consistent growth and profitability.
Innovation and Digitalization Driving Growth: Innovation and digitalization remain key growth drivers in the beauty and skincare market. Consumers are increasingly seeking differentiated products that combine advanced technology with science-backed formulations and proven efficacy, prompting companies to continuously innovate and expand their offerings.
Growing interest in wellness, self-care and high-performance beauty products is further supporting industry growth. Enhancing e-commerce capabilities also remains a major focus, with AI-powered personalization, virtual try-ons, social commerce and data-driven marketing helping brands improve consumer engagement and product discovery. In addition, strategic acquisitions and partnerships are enabling companies to broaden product portfolios and strengthen their competitive positioning.
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 #174, which places it in the bottom 30% of more than 248 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 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.
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 S&P 500 composite and the broader Zacks Consumer Staples sector over the past year.
The industry has moved down 0.8% over this period, against the S&P 500 and the broader sector's increases of 19.7% and 3.7%, respectively.
Industry's Current Valuation
Based on the forward 12-month price-to-earnings (P/E), which is commonly used to value consumer staples stocks, the industry is currently trading at 22.89X compared with the S&P 500's 19.82X and the sector's 17.15X.
In the past five years, the industry has traded as high as 40.46X and as low as 18.48X, with the median being 28.78X.
4 Cosmetic Stocks Worth Considering
The Estee Lauder Companies: This Zacks Rank #3 (Hold) company manufactures and markets skincare, makeup, fragrance and hair care products through a portfolio of prestige beauty brands. Estee Lauder's "Beauty Reimagined" strategy is aimed at strengthening its position as a consumer-centric prestige beauty company by enhancing innovation, broadening consumer reach across markets and channels, and improving operational efficiency. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The company is also transforming its operating model to become faster, more agile and disciplined while directing investments toward brand building and growth opportunities. With a strong digital presence, continued product innovation and investments in technology, data and consumer insights, Estee Lauder remains focused on driving diversified, sustainable long-term growth.
The Zacks Consensus Estimate for EL's current fiscal-year EPS moved up 0.3% in the past seven days to $3.30. The stock has gained 10% in the past year.
e.l.f. Beauty: This Zacks Rank #3 company offers a broad range of cosmetics, skincare and other beauty products, with a strong focus on delivering high-quality offerings at accessible price points. The company has built a differentiated position through its value-driven proposition, combining affordability with innovation and strong consumer engagement.
e.l.f. Beauty continues to support growth through digital capabilities, community-led marketing and a portfolio of complementary beauty brands. It is also expanding internationally, broadening distribution and extending into adjacent beauty categories. With a focus on inclusivity, product innovation and brand-building, e.l.f. Beauty remains well positioned to capitalize on long-term opportunities in the global beauty industry.
The Zacks Consensus Estimate for ELF's current fiscal-year EPS has remained unchanged in the past seven days at $3.63. e.l.f. Beauty stock has fallen 17.5% in the past year.
Coty: A leading manufacturer, marketer and distributor of beauty products, Coty carries a Zacks Rank #3 at present. The company is focused on strengthening its core beauty franchises through disciplined brand investment, product innovation and operational efficiency. Coty's strategy emphasizes improving Consumer Beauty, expanding and supporting its Prestige fragrance and makeup portfolio, sharpening resource allocation and simplifying the business.
Fragrances remain a key part of Coty's portfolio, supported by established global brands, resilient consumer demand and continued innovation. Through its Coty.Curated framework and ongoing productivity initiatives, the company is also working to streamline operations, strengthen consumer engagement and build a more focused and efficient organization.
The Zacks Consensus Estimate for COTY's current fiscal-year EPS has remained unchanged in the past seven days at 31 cents. Coty's shares have lost 33% in the past year.
Helen of Troy: This provider of consumer products across the Home & Outdoor and Beauty & Wellness segments carries a Zacks Rank #3. The company is focused on strengthening its brands through consumer-first innovation, targeted marketing and enhanced consumer engagement. Helen of Troy is also working to improve commercial and operational execution, simplify its operating model and strengthen supply-chain capabilities.
Through a more consumer-centric approach, Helen of Troy aims to restore brand momentum and support consistent long-term growth. The company is also strengthening its presence in priority international markets while enhancing both digital and e-commerce capabilities, positioning the business to respond to evolving consumer preferences and pursue sustainable growth opportunities.
The Zacks Consensus Estimate for Helen of Troy's current fiscal-year EPS has remained unchanged in the past seven days at $3.54. The stock has risen 10.3% in the past year.
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