The demand in the cosmetic industry has rebounded this year, with the production of high-quality and organic skincare products and the lifting of Covid-19 related travel restrictions. Prominent cosmetic retailers Estée Lauder (EL) and Coty (NYSE:COTY) should benefit from the rising consumer spending this holiday season. But which of these stocks is a better buy now? Read more to find out.The Estée Lauder Companies Inc. (EL) and Coty Inc . (COTY) are two prominent companies in the global cosmetics industry. EL manufactures, markets, and sells a wide range of skincare, makeup, fragrance, and hair care products. The company also sells ancillary products and services. On the other hand, COTY is a beauty company that manufactures, markets, and sells branded beauty products, including prestige fragrances, skin and body care, and color cosmetics products. It also sells hair and nail care products for professionals. Both companies sell their products through department stores, specialty-multi retailers, upscale perfumeries, drug stores and pharmacies, salons and spas, e-retailers, and duty-free shops.
The COVID-19 pandemic-related changes in lifestyle and lockdowns made the cosmetics industry witness an 8% decline in sales last year. However, efforts to produce high-quality skincare products and sales through e-commerce platforms helped the industry stay afloat.
Since stores are witnessing increasing foot traffic ahead of the holiday season due to the easing of restrictions, the cosmetic industry is expected to see solid sales growth. The global cosmetics market size is expected to grow at 5% CAGR and reach $415.29 billion by 2028. So, both EL and COTY should benefit.