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 Inter Parfums (NASDAQ: IPAR) 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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.5% while next quarter’s revenue guidance was 10.6% below.
Thankfully, share prices of the companies have been resilient as they are up 8.4% on average since the latest earnings results.
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 exceeded analysts’ expectations by 2.7%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.
Interestingly, the stock is up 4.1% since reporting and currently trades at $133.41.
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, outperforming analysts’ expectations by 6.9%. The business had an incredible quarter with a solid beat of analysts’ EPS and EBITDA estimates.
The Honest Company pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 46.9% since reporting. It currently trades at $7.05.
Is now the time to buy The Honest Company? 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 13.4% since the results and currently trades at $7.30.
Read our full analysis of Nu Skin’s results here.
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. This print surpassed analysts’ expectations by 5.2%. It was an exceptional quarter as it also produced a solid beat of analysts’ EPS and EBITDA estimates.
Nature's Sunshine scored the highest full-year guidance raise among its peers. The stock is up 13.4% since reporting and currently trades at $15.65.
Read our full, actionable report on Nature's Sunshine 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 $78.8 million, down 19.1% year on year. This result beat analysts’ expectations by 2.6%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is down 2.9% since reporting and currently trades at $1.65.
Read our full, actionable report on BeautyHealth here, it’s free.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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