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Estee Lauder (
EL) has built a $26.5 billion business by selling makeup and fragrances around the world. And in 2013, this stock has been enjoying some stiff tailwinds at the hands of upped consumer discretionary spending. Estee Lauder owns a full 25% share of the world's high-end cosmetics market thanks to a portfolio of brands that includes popular names like Clinique, M-A-C, Aveda and Origins.
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Makeup benefits from fat margins and very high customer stickiness -- consumers aren't likely to just jump to an untested brand, which makes EL's massive market share very defensible. Today, around 60 cents out of every dollar that Estee Lauder generates comes from overseas. While that's a strong number, it leaves a whole lot of room for improvement, especially as a burgeoning new middle class of women in emerging markets boosts demand for pricier makeup and fragrance products.
Consumer tailwinds aren't showing any signs of dying down in 2013. As mall traffic trends higher in the U.S. and abroad, EL should continue to churn out strong fundamentals. Look out for earnings on Aug. 15.