The cosmetics company makes a name for itself by making consumer beauty products such as makeups, hair colours, shampoos, lotions, and perfumes. The cosmetics industry has companies which are divided into two main sectors, the consumer staples sector and the consumer discretionary. In fact, the Consumer Discretionary Select Sector SPDR ETF has managed to outperform the broader market last year with a trailing one-year total return of 31.2%. Self-care is high on the list of people’s activities ever since they have been shut in their homes since the start of the pandemic and influencers and beauty gurus have been seeking to grow their makeup portfolio during the pandemic.
Estee Lauder Companies Inc (NYSE: EL)
Estee Lauder Companies Inc (EL) is a New York based multinational manufacturing company which produces fragrances, make up, skin care, and hair care products. It was founded in 1946 under Mrs. Estee Lauder who created her personal range of beauty products and the group now has brands such as Tommy Hilfiger, Michael Kors, Bobby Brown, Aramis, and Clinique in its portfolio which give it a large economic moat.
43 per cent of its revenue is brought in by products distributed to Africa, Europe, and the Middle East. North America and South America bring in a revenue of 31 per cent while a 25 per cent of revenue is brought in by 25 per cent. In the fourth quarter of last year, EL faced a 32 per cent decline which pushed its shared down by 6 per cent in premarket trading but it still a substantial figure when compared with the unfavorable situation created by the pandemic.
e.l.f. Beauty Inc (NYSE: ELF)
e.l.f. Beauty Inc (ELF) is a California based manufacturing company which specializes in selling completely vegan and cruelty-free make up and skin care products. While it was established in 2004, the company went public in 2016. It sells its products in retail stores such as Target and Walmart, and online as well.
Due to the pandemic the company did see a marked decline in retail sales but the loss was somewhat offset due to the increasing amount of online sales and the stock went up by 20 per cent in 2020. In 2020, ELF saw four quarters worth of net sales growth and in the fourth quarter they saw a 16 per cent increase from the past year.
Beiersdorf Aktiengesellschaft (BEI)
Beiersdorf Aktiengesellschaft is a Hamburg, Germany, based company which manufactures and distributes consumer goods to Australia, Europe, Asia, America, and Africa. Its consumer business segment offers body care and skin care products. It even has its own research and development department and more than 150 active subsidiaries all over the world. Its brand portfolio consists of brands such as NIVEA and La Prairie and other local and regional companies such as Hansaplast and Hidrofugal.
In the third quarter of last year, BEI reported an 8.5 per cent year over year decline in sale due to the difficult situation created by the pandemic which led to its stores being closed. But it still managed to maintain a market cap at $25.3 billion with a 38.5 per cent 12 month trailing P/E ratio.