Top 12 Luxury Stocks According to Hedge Funds

3. The Estee Lauder Companies Inc. (NYSE:EL)

Number of Hedge Fund Holders: 49

Estee Lauder (NYSE:EL) manufactures, markets, and sells skincare, makeup, hair care products, and fragrances. It sells its products in more than 150 countries and territories under various brand names, including Estee Lauder, Clinique, Aramis, M.A.C., Bobbi Brown Cosmetics, TOM FORD, La Mer, Too Faced, and several others. It also operates the DECIEM family of brands, including The Ordinary and NIOD. In addition, Estee Lauder is a licensee of cosmetics, fragrances, and related items for Dr. Andrew Weil, BALMAIN, and AERIN.

The company’s organic sales decreased by 5% in fiscal Q1 2025, driven by declines in mainland China and global travel retail primarily owned to Hong Kong SAR and Asia. Apart from these three areas, sales in the rest of the company’s global business grew by 1% both on an organic and reported basis. Sales growth also accelerated sequentially from 2% to 3%. A number of Estee Lauder’s (NYSE:EL) markets delivered organic sales growth in fiscal Q1 2025, including Japan and EMEA.

The company’s primary focus is rebalancing its regional growth in the face of market volatility in China. Its strategic reset for fiscal 2025 is based on five core priorities. These include capitalizing on multiple growth drivers of high-end fragrance, advancing in skin care, leveraging winning channels, launching accretive innovation, and driving modernized precision marketing by employing AI and data.

ClearBridge Large Cap Growth Strategy made the following comment about The Estée Lauder Companies Inc. (NYSE:EL) in its second quarter 2023 investor letter:

“We have refreshed our whiteboard and will look to take advantage of such downside earnings revisions among early cycle recovery plays in industrials and consumer discretionary. We are targeting quality themes in the consumer space where estimates have been partly de-risked, similar to the scenario that prompted the purchase of The Estée Lauder Companies Inc. (NYSE:EL) in the fourth quarter. Such names should be well-positioned to deliver improved earnings on the other side of an eventual recession.”