10 Best Skincare Stocks to Buy According to Hedge Funds

5. The Estée Lauder Companies Inc. (NYSE:EL)

Number of Hedge Fund Investors: 45  

The Estée Lauder Companies Inc. (NYSE:EL) is a staple of the industry, historically one of the top performers and Best Beauty Stocks to consider. Although the company was founded in the postwar era, it has since developed into a dominant force in the market with a variety of appealing brands. Among its brands are Aveda, Bumble & Bumble, and La Mer. Although the company’s luxury skincare products have found a thriving market, it has recently had to reduce its dividend due to a slowdown in China.

In Q2 of 2025, Skin care segment net sales dropped 12% YoY as a result of weakening travel and Asia/Pacific retail, with Estee Lauder and La Mer experiencing drops as a result of dampened Chinese consumer sentiment. Although it was somewhat compensated by lower expenditures and stricter spending control, the operating income also dropped.

Nonetheless, The Estée Lauder Companies Inc. (NYSE:EL) revealed its revolutionary strategic strategy, “Beauty Reimagined,” which focuses on greater agility and improved consumer focus to restore sustainable sales growth and achieve strong double-digit adjusted operating margins over the coming years. Over 60% of the company’s fiscal 2025 goals have already been met in the first half of the year due to the Profit Recovery and Growth Plan, which has been expanded to address new issues and improve operational effectiveness.

The Estée Lauder Companies Inc. (NYSE:EL) is also growing its investments in consumer-facing initiatives, such as more visible advertising and better-targeted marketing campaigns, and tripling the proportion of innovation introduced in a year. Significant gains in market share have also been fueled by successful brand launches and expansions, such as Clinique and The Ordinary’s entry into Amazon’s U.S. Premium Beauty stores. The firm is incorporating AI into several operations, such as marketing optimization and demand forecasting, to improve decision-making and expedite procedures.