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Reflecting On Personal Care Stocks’ Q1 Earnings: Edgewell Personal Care (NYSE:EPC)


Radek Strnad /
2024/05/31 5:03 am EDT

Wrapping up Q1 earnings, we look at the numbers and key takeaways for the personal care stocks, including Edgewell Personal Care (NYSE:EPC) 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. 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 while some of the personal care stocks have fared somewhat better than others, they collectively declined, with share prices falling 3.9% on average since the previous earnings results.

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.

"In a challenging and somewhat volatile operating environment, our second quarter results reflect strong gross margin expansion that fueled significant adjusted EBITDA and earnings per share growth. Organic net sales growth included a double-digit increase in our Right-to-Win portfolio, driven by our market-leading Sun Care and Grooming businesses. Our International markets continued to deliver accelerated growth, with a healthy combination of both price and volume gains. Importantly, we delivered over 300-basis points of adjusted gross margin expansion, underpinned by disciplined execution of both our cost productivity and strategic revenue management efforts," said Rod Little, Edgewell's President and Chief Executive Officer.

Edgewell Personal Care Total Revenue

The stock is up 0.4% since the results and currently trades at $37.76.

Is now the time to buy Edgewell Personal Care? 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' revenue and earnings estimates.

The Honest Company Total Revenue

The stock is down 6.5% since the results and currently trades at $2.75.

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 25.4% since the results and currently trades at $26.5.

Read our full analysis of Medifast's results here.

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 solid quarter for the company, with an impressive beat of analysts' earnings estimates.

The stock is down 17% since the results and currently trades at $121.79.

Read our full, actionable report on Estée Lauder here, it's free.

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 $227.8 million, down 8.3% year on year, in line with analysts' expectations. It was a mixed quarter for the company, with a solid beat of analysts' operating margin estimates but full-year revenue guidance missing analysts' expectations.

The stock is up 12.6% since the results and currently trades at $46.73.

Read our full, actionable report on USANA here, it's free.

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