The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how The Honest Company (NASDAQ:HNST) and the rest of the personal care stocks fared in Q3.
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 16.1% below.
Thankfully, share prices of the companies have been resilient as they are up 6.7% on average since the latest earnings results.
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. This print exceeded analysts’ expectations by 6.9%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
“Our strong third quarter results are a clear reflection of the power of the Honest brand and the strength of the Honest team that has executed our strategy and Transformation Initiative with discipline and excellence. Our ability to grow profitably is evidenced in our results -- with double digit revenue growth reaching an all-time high, significant expansion in gross margin, and positive net income for the period,” said Chief Executive Officer, Carla Vernón.
The Honest Company achieved the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 58.1% since reporting and currently trades at $7.59.
Is now the time to buy The Honest Company? 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, outperforming analysts’ expectations by 5.2%. The business had a very strong quarter with a solid beat of analysts’ EPS and EBITDA estimates.
Nature's Sunshine achieved the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 15.7% since reporting. It currently trades at $15.97.
Is now the time to buy Nature's Sunshine? 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 17.9% since the results and currently trades at $7.59.
Read our full analysis of Nu Skin’s results here.
Inter Parfums (NASDAQ:IPAR)
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 $424.6 million, up 15.4% year on year. This print topped analysts’ expectations by 2.7%. Aside from that, it was a satisfactory quarter as it also recorded a solid beat of analysts’ EBITDA estimates.
The stock is down 1.1% since reporting and currently trades at $126.74.
Read our full, actionable report on Inter Parfums here, it’s free.
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 print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also produced an impressive beat of analysts’ EPS estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
The stock is down 25.3% since reporting and currently trades at $65.10.
Read our full, actionable report on Estée Lauder here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September, a quarter in November) have kept 2024 stock markets frothy, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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