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 Herbalife (NYSE:HLF) and the rest of the personal care stocks fared in Q1.
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 0.8%. while next quarter's revenue guidance was 7.5% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the personal care stocks have fared somewhat better than others, they collectively declined, with share prices falling 1.6% on average since the previous earnings results.
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, in line with analysts' expectations. Overall, it was an ok quarter for the company with an impressive beat of analysts' earnings estimates but a miss of analysts' organic revenue growth estimates.
“We achieved our second consecutive quarter of year-over-year net sales growth. We are laser focused on cost reductions, which drove outperformance of our Adjusted EBITDA1 guidance,” said Michael Johnson, Chairman and CEO.
The stock is up 36.1% since reporting and currently trades at $11.83.
Is now the time to buy Herbalife? 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' earnings estimates.
The market seems happy with the results as the stock is up 37.1% since reporting. It currently trades at $4.03.
Is now the time to buy The Honest Company? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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%. It was a weak quarter for the company with underwhelming earnings guidance for the full year and a miss of analysts' earnings estimates.
USANA posted the weakest performance against analyst estimates in the group. As expected, the stock is down 8.7% since the results and currently trades at $41.85.
Read our full analysis of USANA's results here.
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 $417.3 million, down 13.3% year on year, falling short of analysts' expectations by 3.5%. Zooming out, it was a slower quarter for the company with full-year revenue guidance missing analysts' expectations and a miss of analysts' gross margin estimates.
The stock is down 13.4% since reporting and currently trades at $10.75.
Read our full, actionable report on Nu Skin here, it's free.
Olaplex (NASDAQ:OLPX)
Rising to fame on TikTok because of its “bond building" hair products, Olaplex (NASDAQ:OLPX) offers products and treatments that repair the damage caused by traditional heat and chemical-based styling goods.
Olaplex reported revenues of $98.91 million, down 13.1% year on year, surpassing analysts' expectations by 3.9%. More broadly, it was a mixed quarter for the company with a decent beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.
The stock is up 53.6% since reporting and currently trades at $2.15.
Read our full, actionable report on Olaplex here, it's free.
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