Cosmetic companies’ efforts to develop natural and quality cosmetic products and increase market reach via advertising and e-commerce platforms have helped the industry stay afloat amid the pandemic. With the easing of travel restrictions and rising consumer spending, budding small-cap companies in this space, e.l.f. Beauty (NYSE:ELF) and Revlon (REV), are well-positioned to deliver solid returns in the upcoming months. But which of these stocks is a better buy now? Read more to find out.e.l.f. Beauty, Inc. (ELF) and Revlon, Inc. (REV) are two prominent companies in the global cosmetics industry. ELF is a multi-brand beauty company that offers cruelty-free cosmetics and beauty products for eyes, lips, and facial skincare products. It has a market capitalization of $1.61 billion. On the other hand, with a market cap of $611.72 million, REV manufactures, markets, and sells beauty and personal care products that include color cosmetics, hair color, beauty tools, fragrances, skincare, antiperspirant deodorants, and beauty care products. Both the companies sell their products through specialty cosmetics stores, retailers, e-commerce platforms, and independent distributors.
Mask mandates and travel restrictions led to the cosmetics industry witnessing an 8% year-over-year decline in sales last year. However, consumers’ shift to organic products and new beauty trends has been helping the industry rebound this year. Moreover, increased advertising and e-commerce sales are driving the industry’s growth.
Rising consumer spending and increasing foot traffic in brick-and-mortar stores should drive the industry’s sales growth this holiday season. The global cosmetics market is expected to grow at 5.3% CAGR and reach $463.50 billion by 2027. So, both ELF and REV should benefit.