As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at personal care stocks, starting with Coty (NYSE:COTY).
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 mixed Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 16.1% below.
In light of this news, share prices of the companies have held steady as they are up 4% on average since the latest earnings results.
Weakest Q3: Coty (NYSE:COTY)
With a portfolio boasting many household brands, Coty (NYSE:COTY) is a beauty products powerhouse with offerings in cosmetics, fragrances, and skincare.
Coty reported revenues of $1.67 billion, up 1.8% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ earnings estimates and underwhelming earnings guidance for the full year.
Unsurprisingly, the stock is down 1.7% since reporting and currently trades at $7.30.
Read our full report on Coty here, it’s free.
Best Q3: e.l.f. (NYSE:ELF)
e.l.f. Beauty (NYSE:ELF), which stands for ‘eyes, lips, face’, offers high-quality beauty products at accessible price points.
e.l.f. reported revenues of $301.1 million, up 39.7% year on year, outperforming analysts’ expectations by 4%. The business had a very strong quarter with an impressive beat of analysts’ earnings and EBITDA estimates.
e.l.f. delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 13.3% since reporting. It currently trades at $118.10.
Is now the time to buy e.l.f.? Access our full analysis of the earnings results here, it’s free.
Nature's Sunshine (NASDAQ:NATR)
Started on a kitchen table in Utah, Nature’s Sunshine Products (NASDAQ:NATR) manufactures and sells nutritional and personal care products.
Nature's Sunshine reported revenues of $114.6 million, up 3.1% year on year, exceeding analysts’ expectations by 5.2%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ earnings and EBITDA estimates.
Interestingly, the stock is up 1.9% since the results and currently trades at $14.06.
Read our full analysis of Nature's Sunshine’s results here.
Estée Lauder (NYSE:EL)
Named after its founder, who was an entrepreneurial woman from New York with a passion for skincare, Estée Lauder (NYSE:EL) is a one-stop beauty shop with products in skincare, fragrance, makeup, sun protection, and men’s grooming.
Estée Lauder reported revenues of $3.36 billion, down 4.5% year on year. This result was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also produced an impressive beat of analysts’ earnings estimates but revenue guidance for next quarter missing analysts’ expectations.
The stock is down 23.5% since reporting and currently trades at $66.70.
Read our full, actionable report on Estée Lauder here, it’s free.
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 $517.6 million, down 3.1% year on year. This print missed analysts’ expectations by 3.3%. It was a softer quarter as it also produced a miss of analysts’ organic revenue growth and EBITDA estimates.
The stock is flat since reporting and currently trades at $36.41.
Read our full, actionable report on Edgewell Personal Care here, it’s free.
Market Update
As expected, the Federal Reserve cut its policy rate by 25bps (a quarter of a percent) in November 2024 after Donald Trump triumphed in the US Presidential election. This marks the central bank's second easing of monetary policy after a large 50bps rate cut two months earlier. Going forward, the markets will debate whether these rate cuts (and more potential ones in 2025) are perfect timing to support the economy or a bit too late for a macro that has already cooled too much. Adding to the degree of difficulty is a new Republican administration that could make large changes to corporate taxes and prior efforts such as the Inflation Reduction Act.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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