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Reflecting On Personal Care Stocks’ Q1 Earnings: Estée Lauder (NYSE:EL)


Anthony Lee /
2024/07/02 3:42 am EDT

Let's dig into the relative performance of Estée Lauder (NYSE:EL) and its peers as we unravel the now-completed Q1 personal care earnings season.

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. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and personal care stocks have had a rough stretch, with share prices down 7.7% on average since the previous earnings results.

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 $3.94 billion, up 5% year on year, in line with analysts' expectations. It was a mixed quarter for the company, with an impressive beat of analysts' earnings estimates. On the other hand, its revenue and earnings forecast for next quarter missed analysts' expectations. Full-year earnings guidance also missed Wall Street's estimates.

Fabrizio Freda, President and Chief Executive Officer said, “For the third quarter of fiscal 2024, we delivered our organic sales outlook, exceeded expectations for profitability and continued to improve working capital. La Mer, Estée Lauder, Jo Malone London, Le Labo, and The Ordinary led organic sales growth, driven by beloved hero products and highly sought innovation. Asia travel retail returned to organic sales growth, as developed and emerging markets across Asia/Pacific, EMEA, and Latin America further contributed.

Estée Lauder Total Revenue

The stock is down 28.3% since the results and currently trades at $105.2.

Is now the time to buy Estée Lauder? Access our full analysis of the earnings results here, it's free.

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' gross margin estimates.

The Honest Company Total Revenue

The stock is down 3.7% since the results and currently trades at $2.83.

Is now the time to buy The Honest Company? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Medifast (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.

Medifast had the slowest revenue growth in the group. The stock is down 40.8% since the results and currently trades at $21.03.

Read our full analysis of Medifast'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 $1.26 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 18% since the results and currently trades at $10.25.

Read our full, actionable report on Herbalife 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 $599.4 million, flat year on year, falling short of analysts' expectations by 1.2%. It was an ok quarter for the company, with a solid beat of analysts' earnings estimates but a miss of analysts' organic revenue growth estimates.

The stock is up 6.4% since the results and currently trades at $40.02.

Read our full, actionable report on Edgewell Personal Care here, it's free.

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