Top Beauty and Cosmetics Stocks That May Drive Long-Term Growth

An updated edition of the June 2, 2025 article.

The beauty and cosmetics industry has come a long way — from ancient natural remedies to today’s advanced, science-backed skincare and makeup products. Influenced by shifting beauty standards, cultural trends, technological advancements and evolving consumer values, the industry has continually adapted to changing demands. Now a multi-billion-dollar global market, the beauty sector encompasses a broad range of offerings, including skincare, makeup, fragrances and wellness solutions. As innovation fuels product development and consumer preferences continue to evolve, the beauty industry remains a powerful and ever-changing force in the world of personal care and self-expression.

In recent years, skincare has emerged as a dominant trend in the global beauty industry, with consumers increasingly prioritizing healthy, glowing skin over cosmetic coverage. This growing demand has led to a surge in skincare products featuring natural ingredients, clean beauty formulations and dermatologist-recommended solutions. 

Influences from K-beauty and J-beauty — celebrated for their focus on hydration, layered skincare routines and effective sun protection — have further shaped consumer preferences. To stay ahead, beauty brands are investing in advanced, science-backed innovations, such as probiotic skincare, blue light defense creams and skin barrier-strengthening treatments. As skincare continues to drive growth, it remains at the forefront of beauty trends worldwide.

Sustainability is playing an increasingly critical role in shaping the future of the beauty industry. As eco-conscious consumers demand greater accountability, there is a rising focus on ethically sourced ingredients, sustainable packaging and transparent business practices. 

Beauty brands that embrace cruelty-free testing, carbon-neutral operations and clean-label formulations are gaining customer trust and loyalty. Leading the charge, Johnson & Johnson JNJ has made notable progress through initiatives, such as reducing plastic usage, improving recyclability, and sourcing ingredients responsibly across its skincare and personal care lines.

Technology is transforming the way consumers use beauty products, ushering in a new era of innovation and personalization. From Artificial Intelligence-powered skincare diagnostics and augmented reality virtual try-ons to biotech-driven formulations, tech is transforming both the shopping experience and product performance. 

One rapidly growing category is dermocosmetics, which combines pharmaceutical research with skincare to deliver clinically validated results. Unilever PLC UL is at the forefront of this transformation, integrating advanced technologies into its skincare and personal care brands to enhance product efficacy, tailor solutions to individual needs and elevate the overall user experience.

As digital innovation continues to accelerate, tech-enabled beauty is becoming a key driver of growth and differentiation in the industry. To that end, we have identified three standout stocks from our Beauty & Cosmetics Screen that are well-positioned to capitalize on these transformative trends. These include The Estee Lauder Companies Inc. EL, Coty Inc. COTY and Ulta Beauty, Inc. ULTA.

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3 Beauty and Cosmetics Stocks to Watch

In today’s fast-changing beauty landscape, The Estee Lauder Companies is undergoing a bold transformation under its forward-looking “Beauty Reimagined” initiative. This strategic evolution centers on consumer-centricity, digital agility and cutting-edge innovation. With a clear goal to reclaim its leadership in the global beauty market, EL is aligning its diverse brand portfolio with shifting consumer behaviors, expanding into high-growth markets and enhancing its digital presence to drive long-term, sustainable growth.

A cornerstone of this transformation is its aggressive expansion into digital commerce. The company has launched nine of its prestige beauty brands on Amazon’s U.S. Premium Beauty Store, marking a milestone in reaching consumers through high-demand e-commerce channels. Most recently, the flagship Estee Lauder brand debuted on Amazon.ca, offering premium skincare, makeup, and fragrances to Canadian consumers via one of the country’s most trusted online platforms. These moves reinforce The Estee Lauder Companies’ commitment to omnichannel retail strategy and digital consumer engagement.

EL also uses AI for demand forecasting, inventory optimization, product development and supply-chain planning, resulting in faster time-to-market and improved accuracy. Strategic collaborations are accelerating this digital transformation, such as a partnership with Adobe, integrating Adobe Firefly, a generative AI tool, to enhance creative content and marketing. Furthering its tech leadership, EL has partnered with Microsoft to launch an AI Innovation Lab, leveraging generative AI to fast-track product innovation, identify emerging trends and enrich customer experiences. 

Beyond digital innovation, EL is strengthening its R&D capabilities with the launch of a BioTech Hub in Oevel, Belgium. This cutting-edge facility focuses on the fermentation and production of bio-based ingredients for its luxury skincare brands, enhancing the company’s sustainability efforts and reinforcing its leadership in biotechnology-driven beauty solutions. By investing in digital transformation, AI integration and sustainable product innovation, this Zacks Rank #1 (Strong Buy) company is actively shaping its future. You can see the complete list of today’s Zacks #1 Rank stocks here.

The global beauty industry is undergoing a rapid change, and Coty is emerging as a forward-thinking leader, strategically navigating this transformation. Through a clear focus on innovation, consumer-centric growth and digital acceleration, it is redefining its position in the modern beauty landscape. The company continues to strengthen its core business across prestige fragrances, skincare, and mass-market beauty, while optimizing its product portfolio to align with evolving consumer preferences. By enhancing operational agility — especially in the critical U.S. market — Coty is reinforcing its competitive edge and paving the way for long-term, sustainable growth.

Prestige fragrances remain a core growth engine for Coty, with the company expanding into new consumer segments and markets. By introducing entry-level luxury formats such as body mists and pen sprays, Coty is making premium scents more accessible to younger, multicultural and male demographics — particularly in underpenetrated regions. These offerings are not only boosting volume but also strengthening brand relevance. With a robust Prestige fragrance pipeline planned for fiscal 2026 — hailed as Coty’s strongest in five years — the company is well-positioned to lead the next wave of fragrance innovation and accelerate top-line revenue growth.

Coty’s commitment to digital transformation and e-commerce expansion is central to its growth strategy. Online sales now contribute nearly 20% to total revenues, supported by a longstanding partnership with Amazon and strategic initiatives on emerging platforms like TikTok Shop. The company’s “Agile Beauty” model enables rapid product innovation in response to viral beauty trends, helping brands like CoverGirl stay relevant in the competitive mass cosmetics space. With continued investments in AI, automation and a successful S4HANA migration, the Zacks Rank #2 (Buy) company is streamlining operations and building scalable digital infrastructure. 

Ulta Beauty continues to dominate the U.S. beauty retail landscape by seamlessly blending brand curation, digital innovation and experiential shopping. At the core of this momentum is the retailer’s transformative strategy, “Ulta Beauty Unleashed,” which is focused on strengthening core operations, accelerating digital capabilities and enhancing the overall customer experience. From exclusive beauty launches to immersive activations like the Ulta Beauty World event, the company is evolving from a traditional retailer into a full-fledged lifestyle and wellness destination, appealing to beauty lovers across all demographics.

Driven by a strong multi-category growth strategy, Ulta Beauty is seeing impressive performance across key segments, including fragrance, skincare and wellness. Fragrance remains the company’s fastest-growing category. The skincare category continues to thrive with the addition of in-demand brands such as Tatcha, Naturium and Anua, while consumer interest in K-beauty and body care is on the rise. Simultaneously, it is scaling its wellness offering with the introduction of new lifestyle-focused brands, including Garden of Life and HATCH Mama, aligning beauty with holistic well-being.

A cornerstone of Ulta Beauty’s success is its powerful loyalty ecosystem and cutting-edge digital infrastructure. With more than 45 million active Ulta Beauty Rewards members, the brand fosters deep customer engagement and long-term loyalty. ULTA continues to advance its omnichannel strategy with mobile-first innovations like GLAMlab 2.0 for virtual try-ons, as well as AI-powered skin and hair analysis tools for hyper-personalized beauty experiences. 

The introduction of UB Community further deepens customer interaction, while Adobe-powered segmentation and real-time content delivery fuel its highly targeted marketing campaigns. As competition in the beauty sector intensifies, this Zacks Rank #3 (Hold) company remains focused on expanding its product assortment, elevating digital experience and delivering seamless, tech-driven beauty solutions tailored to modern consumers.

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This article originally published on Zacks Investment Research (zacks.com).

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