Market Spotlight: Cosmetic Companies

While Chang acknowledges the sector is worried about domestic economic conditions, she notes that the industry is pretty resilient, and consumers are still likely to make a "tiny splurge" on cosmetics.

Latest earnings results have provided investors with some assurance. Revlon, which is controlled by financier Ron Perelman, said Friday it narrowed its first-quarter loss partly on cost control efforts, while Estee Lauder's second-quarter earnings climbed in February on international sales growth.

Even Avon, which unveiled a multiyear restructuring plan in November 2005 after global sales dropped, reported better-than-expected results. The company's fourth-quarter profit fell in February, but managed to top Wall Street's expectations.

The news hasn't gone unnoticed, as Estee Lauder's stock has climbed nearly 23 percent since hitting a 12-month low of $37.03 in January, while Avon's stock is up about 26 percent since its 52-week low of $31.95 in September.