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 Q3, starting with BeautyHealth (NASDAQ:SKIN).
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 Q3. As a group, revenues beat analysts’ consensus estimates by 0.5% while next quarter’s revenue guidance was 10.6% below.
Luckily, personal care stocks have performed well with share prices up 13.6% on average since the latest earnings results.
BeautyHealth (NASDAQ:SKIN)
Operating in the emerging beauty health category, the appropriately named BeautyHealth (NASDAQ:SKIN) is a skincare company best known for its Hydrafacial product that cleanses and hydrates skin.
BeautyHealth reported revenues of $78.8 million, down 19.1% year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but full-year revenue guidance missing analysts’ expectations significantly.
“We delivered revenue above the midpoint of our guidance, with growth in consumables sales driven by sustained demand for Hydrafacial treatments and the successful launch of the Hydralock HA Booster,” said BeautyHealth Chief Executive Officer Marla Beck.
Unsurprisingly, the stock is down 17.1% since reporting and currently trades at $1.41.
Is now the time to buy BeautyHealth? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $99.24 million, up 15.2% year on year, outperforming analysts’ expectations by 6.9%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA 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 77.1% since reporting. It currently trades at $8.50.
Is now the time to buy The Honest Company? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Nu Skin (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 $430.1 million, down 13.8% year on year, falling short of analysts’ expectations by 2.5%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Interestingly, the stock is up 17.2% since the results and currently trades at $7.55.
Read our full analysis of Nu Skin’s results here.
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 $1.24 billion, down 3.2% year on year. This print missed analysts’ expectations by 1%. More broadly, it was actually a strong quarter as it recorded an impressive beat of analysts’ EPS and EBITDA estimates.
The stock is up 26.2% since reporting and currently trades at $8.63.
Read our full, actionable report on Herbalife here, it’s free.
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. This number surpassed analysts’ expectations by 4%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
e.l.f. scored the fastest revenue growth among its peers. The stock is up 23.5% since reporting and currently trades at $128.70.
Read our full, actionable report on e.l.f. here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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