As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the personal care industry, including Edgewell Personal Care (NYSE:EPC) and its peers.
While personal care products products may seem more discretionary than food, consumers tend to maintain or even boost their spending on the category during tough times. This phenomenon is known as "the lipstick effect" by economists, which states that consumers still want some semblance of affordable luxuries like beauty and wellness when the economy is sputtering. Consumer tastes are constantly changing, and personal care companies are currently responding to the public’s increased desire for ethically produced goods by featuring natural ingredients in their products.
The 11 personal care stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 5.5% below.
Thankfully, share prices of the companies have been resilient as they are up 9.7% on average since the latest earnings results.
Weakest Q1: Edgewell Personal Care (NYSE:EPC)
Boasting brands such as Banana Boat, Schick, and Skintimate, Edgewell Personal Care (NYSE:EPC) sells personal care products in the skin and sun care, shave, and feminine care categories.
Edgewell Personal Care reported revenues of $580.7 million, down 3.1% year on year. This print fell short of analysts’ expectations by 1.8%. Overall, it was a slower quarter for the company with a miss of analysts’ organic revenue estimates and full-year EBITDA guidance missing analysts’ expectations.
Edgewell Personal Care Total Revenue
Edgewell Personal Care delivered the weakest performance against analyst estimates of the whole group. The stock is down 5.7% since reporting and currently trades at $28.32.
Co-founded by actress Jessica Alba, The Honest Company (NASDAQ:HNST) sells diapers and wipes, skin care products, and household cleaning products.
The Honest Company reported revenues of $97.25 million, up 12.8% year on year, outperforming analysts’ expectations by 5.7%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The Honest Company Total Revenue
The Honest Company achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 9.6% since reporting. It currently trades at $5.25.
Known for its Optavia program that combines portion-controlled meal replacements with coaching, Medifast (NYSE:MED) has a broad product portfolio of bars, snacks, drinks, and desserts for those looking to lose weight or consume healthier foods.
Medifast reported revenues of $115.7 million, down 33.8% year on year, falling short of analysts’ expectations by 0.6%. It was a mixed quarter as it posted an impressive beat of analysts’ EPS estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
Medifast delivered the slowest revenue growth in the group. Interestingly, the stock is up 6.3% since the results and currently trades at $13.37.
With licenses to produce colognes and perfumes under brands such as Kate Spade, Van Cleef & Arpels, and Abercrombie & Fitch, Inter Parfums (NASDAQ:IPAR) manufactures and distributes fragrances worldwide.
Inter Parfums reported revenues of $338.8 million, up 4.6% year on year. This result beat analysts’ expectations by 2.8%. It was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates.
The stock is up 13.3% since reporting and currently trades at $125.08.
Going to market with a direct selling model rather than through traditional retailers, USANA Health Sciences (NYSE:USNA) manufactures and sells nutritional, personal care, and skincare products.
USANA reported revenues of $249.5 million, up 9.5% year on year. This print surpassed analysts’ expectations by 2.7%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and full-year revenue guidance beating analysts’ expectations.
USANA delivered the highest full-year guidance raise among its peers. The stock is up 23.8% since reporting and currently trades at $30.01.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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