Best european beauty stocks to invest in 2026

European beauty stocks represent some of the world's most prestigious luxury and personal care companies, combining heritage brands with innovative beauty solutions. This article explores top European beauty companies that offer investors exposure to the global luxury goods market and resilient consumer demand for premium beauty products.

Hermès International stands as a pinnacle of French luxury, renowned for its iconic leather goods, silk scarves, and expanding beauty division that maintains exceptional brand exclusivity and pricing power. L'Oréal dominates the global cosmetics market with an extensive portfolio of beauty brands spanning luxury, professional, and consumer segments, benefiting from diversified geographic exposure and strong research capabilities. Pandora has transformed from a Danish jewelry company into a global accessible luxury brand, focusing on sustainable materials and digital innovation to drive growth in the competitive fashion jewelry market.

These European beauty stocks offer investors compelling opportunities to participate in the luxury goods sector's resilience and growth potential. Consider adding these companies to your portfolio in 2025 to capitalize on the enduring appeal of European luxury brands and the beauty industry's innovation-driven expansion.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in stocks mentioned in this article.

Now, let`s take a closer look at each of the companies:

  • Hermès International (PA:RMS)

    Hermès International S.A. is a distinguished luxury goods manufacturer renowned for its high-quality craftsmanship and exclusive products worldwide. The company was founded in 1837 by Thierry Hermès in Paris, France, and offers a wide range of luxury items including leather goods, silk scarves, ties, perfumes, watches, and home furnishings. Operating approximately 300 stores globally as of 2024, this strong global presence maintains the brand`s position in key luxury markets worldwide.

    Hermès` core business is structured around several key segments: Leather Goods and Saddlery, which accounts for around 40% of revenue; Ready-to-Wear and Accessories representing 29% of sales; and Silk and Textiles contributing 7% of revenues. The brand is particularly celebrated for its iconic products like the Birkin and Kelly bags, which have become symbols of luxury and exclusivity. The company`s commitment to traditional craftsmanship and limited production maintains its position as one of the world`s most prestigious luxury brands.

    Hermès International financial statements

    Analysts recommendation: N/A

    Financial Health

    • Return on assets (ROA): 19.09%
    • Return on equity (ROE): 28.55%
    • Return on investment (ROI): N/A

    Profitability

    • Gross margin: 70.31%
    • Operating margin: 42.28%
    • Net profit margin: 28.54%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): 42.74
    • EPS estimate (next quarter): N/A
    • EPS growth (this year): -5.3%
    • EPS growth (next year): N/A
    • EPS growth (next 5 years): N/A
    • EPS growth (quarter-over-quarter): N/A
    • Sales growth (past 5 years): N/A
    • Sales growth (quarter-over-quarter): 7.1%

    💡 Why invest in Hermès International?

    Like exquisite handcrafted leather goods that appreciate in value over time, Hermès demonstrates compelling strengths for luxury-focused investors:

    • Revenue Growth Achievement: Hermès reported consolidated revenue of €15.2 billion in 2024, representing a 15% increase at constant exchange rates, with recurring operating income reaching €6.2 billion and exceptional margins.
    • Brand Exclusivity Strategy: Hermès maintains a strategy of limited production and high-quality craftsmanship, leading to demand consistently exceeding supply for iconic products, resulting in sustained desirability and pricing power.
    • Market Resilience Strength: The company`s focus on timeless designs and avoidance of rapid fashion trends contributes to its ability to withstand economic fluctuations better than many competitors in the luxury sector.
    • Pricing Power Advantage: Hermès has successfully implemented reasonable price increases, ensuring high perceived value of its products without alienating its customer base, maintaining premium positioning and profitability.

    🐌 Key considerations before investing in Hermès International

    However, like exclusive boutiques that serve only the most affluent clientele, Hermès faces significant challenges that luxury investors must evaluate:

    • Valuation Metrics Concern: Hermès shares trade at a price-to-earnings multiple of 48x, significantly higher than the luxury industry median P/E ratio of 21x, indicating a premium valuation that may deter some investors.
    • Tariff Exposure Risk: The imposition of tariffs, such as the 20% U.S. tariff on EU imports, poses potential challenges to Hermès` profitability and pricing strategies in affected markets, impacting international operations.
    • Client Dependence Vulnerability: While targeting affluent customers has been a strength, it also means the company`s performance is closely tied to the spending habits of a niche market segment, which could be impacted by shifts.
    • Production Capacity Limitation: The deliberate strategy of limited production, while enhancing exclusivity, may also cap potential revenue growth opportunities in the face of increasing demand, constraining expansion possibilities.

    Final thoughts on Hermès International

    Hermès International stands as a premier luxury brand with exceptional financial performance and strong market positioning in the global luxury goods sector. The company`s strategy of maintaining exclusivity through limited production has created sustained demand and pricing power across its product portfolio. While the premium valuation and dependence on ultra-wealthy clients present risks, Hermès` proven resilience and timeless appeal make it an attractive investment for those seeking exposure to the luxury goods market.

  • L`Oréal (PA:OR)

    L`Oréal S.A. is the world`s largest cosmetics and beauty company, headquartered in Clichy, France. Founded in 1909 by Eugène Schueller, L`Oréal has grown into a global leader in beauty, with a presence in over 150 countries worldwide. The company`s portfolio encompasses a wide array of brands, including Lancôme, Maybelline, Kiehl`s, and Garnier, catering to diverse consumer needs across skincare, makeup, haircare, and fragrances.

    L`Oréal specializes in developing innovative beauty products that combine science, technology, and sustainability initiatives. The company invests heavily in research and development, with dedicated facilities focused on advancements in beauty and personal care technologies. Guided by its commitment to inclusivity and environmental responsibility, L`Oréal continues to set industry standards while delivering high-quality products that empower consumers worldwide.

    L`Oréal financial statements

    Analysts recommendation: 1.91

    Financial Health

    • Return on assets (ROA): 10.24%
    • Return on equity (ROE): 20.16%
    • Return on investment (ROI): 5.9%

    Profitability

    • Gross margin: 74.11%
    • Operating margin: 21.09%
    • Net profit margin: 13.96%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): 11.42
    • EPS estimate (next quarter): 0.21
    • EPS growth (this year): -7.8%
    • EPS growth (next year): 35.01%
    • EPS growth (next 5 years): 30.44%
    • EPS growth (quarter-over-quarter): 306.39%
    • Sales growth (past 5 years): -8.37%
    • Sales growth (quarter-over-quarter): 1.6%

    💡 Why invest in L`Oréal?

    Like a master perfumer creating signature fragrances that captivate global audiences, L`Oréal demonstrates compelling strengths for beauty-focused investors:

    • Beauty Leadership Excellence: L`Oréal maintains dominant positions across skincare, makeup, haircare, and fragrance segments with iconic brands like Lancôme and Maybelline, creating substantial competitive advantages and market barriers.
    • Innovation Excellence Strategy: The company invests heavily in research and development with cutting-edge laboratories and scientific expertise, consistently launching breakthrough products that drive premium pricing and market share growth.
    • Global Diversification Strength: Operations spanning over 150 countries provide geographic revenue diversification, reducing dependence on single markets while accessing emerging economies with growing beauty demand and purchasing power.
    • Digital Transformation Leadership: L`Oréal leads beauty industry digitalization through e-commerce platforms, virtual try-on technologies, and personalized beauty solutions, capturing younger consumers and online market growth opportunities.

    🐌 Key considerations before investing in L`Oréal

    However, like navigating shifting beauty trends where consumer preferences evolve rapidly, L`Oréal faces significant challenges that investors must evaluate:

    • Competitive Landscape Challenges: Intense competition from established players like Unilever and emerging indie brands pressures market share, margins, and innovation cycles while requiring continuous investment in brand differentiation.
    • Economic Sensitivity Risk: Beauty spending can decline during economic downturns as consumers prioritize essential purchases over discretionary cosmetics, affecting revenue growth and profitability across product categories.
    • Regulatory Complexity Challenge: Operating across diverse global markets subjects L`Oréal to varying cosmetic regulations, ingredient restrictions, and safety standards that can increase compliance costs and limit product launches.
    • Sustainability Pressure Demands: Growing consumer demand for sustainable packaging and clean beauty ingredients requires significant investment in eco-friendly formulations and supply chain modifications affecting operational costs.

    Final thoughts on L`Oréal

    L`Oréal`s global beauty leadership, innovation excellence, geographic diversification, and digital transformation capabilities create compelling opportunities for investors seeking exposure to the beauty industry. However, intense market competition, economic sensitivity, regulatory complexity, and sustainability pressures warrant careful evaluation of beauty sector dynamics. Like a timeless fragrance that adapts to changing preferences while maintaining its essential appeal, L`Oréal combines heritage expertise with modern innovation to capture evolving beauty trends while navigating the competitive landscape of global cosmetics markets.

  • Pandora (CO:PNDORA)

    Pandora A/S, founded in 1982 by Per Enevoldsen in Copenhagen, Denmark, has grown into the world`s largest jewellery brand. The company specializes in designing, manufacturing, and marketing hand-finished, contemporary jewellery made from high-quality materials at accessible prices. Pandora`s products are available in more than 100 countries through approximately 6,800 points of sale, including over 2,700 concept stores.

    Pandora`s core offerings include customizable charm bracelets, rings, earrings, necklaces, and pendants. The brand is renowned for its charm bracelets, allowing customers to personalize their jewellery to reflect individual stories and styles. In recent years, Pandora has embraced sustainability by committing to using only recycled gold and silver by 2025 and introducing lab-grown diamonds to provide affordable and environmentally friendly alternatives to mined stones.

    Pandora financial statements

    Analysts recommendation: N/A

    Financial Health

    • Return on assets (ROA): 18.43%
    • Return on equity (ROE): 163.52%
    • Return on investment (ROI): N/A

    Profitability

    • Gross margin: 79.71%
    • Operating margin: 14.02%
    • Net profit margin: 16.11%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): 66.37
    • EPS estimate (next quarter): N/A
    • EPS growth (this year): -13.7%
    • EPS growth (next year): N/A
    • EPS growth (next 5 years): N/A
    • EPS growth (quarter-over-quarter): N/A
    • Sales growth (past 5 years): N/A
    • Sales growth (quarter-over-quarter): 2.7%

    💡 Why invest in Pandora?

    Like exquisite charm bracelets that tell personal stories through carefully curated pieces, Pandora demonstrates compelling strengths for jewelry-focused investors:

    • Financial Performance Excellence: In 2024, Pandora reported a 13% organic growth, with revenues reaching DKK 31.7 billion and an EBIT margin of 25.2%, demonstrating strong operational efficiency and market positioning globally.
    • Global Market Dominance: With a vast international footprint spanning over 100 countries, Pandora benefits from diversified revenue streams across various regions while maintaining its position as the world`s largest jewelry brand.
    • Sustainability Innovation Leadership: The company`s commitment to using recycled materials and lab-grown diamonds aligns with growing consumer preferences for environmentally responsible products, creating competitive advantages.
    • Product Customization Strategy: Pandora`s customizable jewelry offerings cater to consumers seeking personalized accessories, enhancing customer engagement and loyalty while driving higher margins through premium positioning.

    🐌 Key considerations before investing in Pandora

    However, like delicate jewelry that requires careful handling in challenging market conditions, Pandora faces significant challenges that retail investors must evaluate:

    • Market Competition Pressure: The jewelry industry is highly competitive, with numerous brands vying for market share, which could impact Pandora`s growth and profitability while requiring continuous innovation and marketing investments.
    • Economic Sensitivity Exposure: As a retailer of discretionary goods, Pandora`s sales may be affected by economic downturns that influence consumer spending habits, particularly impacting luxury and non-essential purchases significantly.
    • European Market Challenges: Recent reports indicate sluggish demand in key European markets, which could pose challenges to Pandora`s overall growth trajectory while requiring strategic adjustments and market diversification efforts.
    • Supply Chain Vulnerability: Dependence on manufacturing facilities in specific regions may expose the company to operational risks related to supply chain disruptions, affecting production capacity and delivery schedules globally.

    Final thoughts on Pandora

    Pandora A/S stands out as a leading player in the global jewellery market, bolstered by strong financial performance, a broad international presence, and a commitment to sustainability. However, potential investors should consider the competitive landscape, economic sensitivity, regional market challenges, and supply chain dependencies when evaluating investment opportunities with Pandora. Like a personalized charm bracelet assembled thoughtfully over time, Pandora offers enduring appeal for investors who value brand strength balanced against retail cycle dynamics.