As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the personal care industry, including Medifast (NYSE: MED) 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 12 personal care stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 6.9% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $105.6 million, down 37.4% year on year. This print exceeded analysts’ expectations by 3.7%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
“We are working diligently to transform our business as we look to help more people achieve optimal metabolic health,” said Dan Chard, CEO of Medifast.
Medifast delivered the slowest revenue growth of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $13.57.
Is now the time to buy Medifast? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $235.8 million, up 10.8% year on year, outperforming analysts’ expectations by 4.7%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
USANA pulled off the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.9% since reporting. It currently trades at $30.63.
Is now the time to buy USANA? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $627.2 million, down 3.2% year on year, falling short of analysts’ expectations by 4.2%. It was a disappointing quarter as it posted a significant miss of analysts’ organic revenue estimates and a significant miss of analysts’ EBITDA estimates.
Edgewell Personal Care delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 6.6% since the results and currently trades at $23.36.
Read our full analysis of Edgewell Personal Care’s results here.
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 $106.3 million, up 2.3% year on year. This print beat analysts’ expectations by 5%. It was a strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
Olaplex pulled off the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is down 3.6% since reporting and currently trades at $1.35.
Read our full, actionable report on Olaplex here, it’s free.
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 $78.19 million, down 13.7% year on year. This result surpassed analysts’ expectations by 4.6%. Overall, it was a very strong quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is up 26.9% since reporting and currently trades at $2.03.
Read our full, actionable report on BeautyHealth here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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