The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how personal care stocks fared in Q2, starting with USANA (NYSE:USNA).
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 weaker Q2; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 14.6% 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 7.4% on average since the previous earnings results.
Weakest Q2: USANA (NYSE:USNA) 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 $212.9 million, down 10.6% year on year, falling short of analysts' expectations by 3.7%. Overall, it was a weak quarter for the company with underwhelming earnings guidance for the full year and a miss of analysts' earnings estimates.
“Second quarter operating results were below our expectations,” said Jim Brown, President and Chief Executive Officer.
The stock is down 15% since reporting and currently trades at $38.96.
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Best Q2: 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 $93.05 million, up 10.1% year on year, outperforming analysts' expectations by 6.8%. It was a stunning quarter for the company with an impressive beat of analysts' gross margin estimates and a solid beat of analysts' earnings estimates.
The Honest Company pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 15.6% since reporting. It currently trades at $3.75.
Herbalife (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 $1.28 billion, down 2.5% year on year, falling short of analysts' expectations by 3.6%. It was a weak quarter for the company with a miss of analysts' organic revenue growth and gross margin estimates.
As expected, the stock is down 28% since the results and currently trades at $8.83.
Nu Skin (NYSE:NYSE:NUS) With person-to-person marketing and sales rather than selling through retail stores, Nu Skin (NYSE:NUS) is a personal care and dietary supplements company that engages in direct selling.
Nu Skin reported revenues of $439.1 million, down 12.2% year on year, surpassing analysts' expectations by 1.7%. Overall, it was a weaker quarter for the company with underwhelming earnings guidance for the next quarter and a miss of analysts' gross margin estimates.
Nu Skin pulled off the highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $10.30.
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 $324.5 million, up 50% year on year, surpassing analysts' expectations by 6.6%. Overall, it was a solid quarter for the company with an impressive beat of analysts' earnings estimates and a narrow beat of analysts' gross margin estimates .
e.l.f. scored the fastest revenue growth among its peers. The stock is down 14.7% since reporting and currently trades at $160.38.
This content was originally published on Stock Story
