Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Coty (NYSE:COTY) 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 13 personal care stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 1.1%. while next quarter's revenue guidance was 7.5% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and personal care stocks have had a rough stretch, with share prices down 6.5% on average since the previous earnings results.
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 $1.39 billion, up 7.5% year on year, in line with analysts' expectations. It was a mixed quarter for the company: Coty narrowly topped analysts' revenue and gross margin expectations. On the other hand, its operating margin missed analysts' expectations and its EPS missed Wall Street's estimates.
The stock is down 12.9% since the results and currently trades at $10.03.
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Best Q1: The Honest Company (NASDAQ:HNST) 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 $86.22 million, up 3.4% year on year, outperforming analysts' expectations by 3.5%. It was a stunning quarter for the company, with an impressive beat of analysts' revenue and earnings estimates.
The stock is down 0.7% since the results and currently trades at $2.92.
Weakest Q1: Medifast (NYSE:NYSE:MED) 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 $174.7 million, down 49.9% year on year, in line with analysts' expectations. It was a weak quarter for the company, with revenue guidance for next quarter missing analysts' expectations and a miss of analysts' operating margin estimates.
Medifast had the slowest revenue growth in the group. The stock is down 38.6% since the results and currently trades at $21.79.
Herbalife (NYSE:NYSE:HLF) With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE:HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Herbalife reported revenues of $1.26 billion, flat year on year, falling short of analysts' expectations by 0.1%. It was a slower quarter for the company, with a miss of analysts' organic revenue growth estimates.
The stock is up 19.6% since the results and currently trades at $10.39.
e.l.f. (NYSE:ELF) e.l.f. Beauty (NYSE:NYSE:ELF), which stands for ‘eyes, lips, face’, offers high-quality beauty products at accessible price points.
e.l.f. reported revenues of $321.1 million, up 71.4% year on year, surpassing analysts' expectations by 9.8%. It was a slower quarter for the company, with a miss of analysts' operating margin estimates and underwhelming earnings guidance for the full year.
e.l.f. delivered the biggest analyst estimates beat and fastest revenue growth, but had the weakest full-year guidance update among its peers. The stock is up 36.9% since the results and currently trades at $212.98.
