As the Q3 earnings season wraps, let’s dig into 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 Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1.2% above.
Thankfully, share prices of the companies have been resilient as they are up 9.1% on average 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 $89.41 million, down 36.2% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.
Medifast delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 2.4% since reporting and currently trades at $12.17.
Is now the time to buy Medifast? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Nature's Sunshine (NASDAQ:NATR)
Started on a kitchen table in Utah, Nature’s Sunshine (NASDAQ:NATR) manufactures and sells nutritional and personal care products.
Nature's Sunshine reported revenues of $128.3 million, up 12% year on year, outperforming analysts’ expectations by 6.7%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates.
Nature's Sunshine delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 60.4% since reporting. It currently trades at $21.98.
Is now the time to buy Nature's Sunshine? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 $537.2 million, up 3.8% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a disappointing quarter as it posted a significant miss of analysts’ organic revenue and adjusted operating income estimates.
As expected, the stock is down 4% since the results and currently trades at $18.15.
Read our full analysis of Edgewell Personal Care’s results here.
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 $70.66 million, down 10.3% year on year. This result topped analysts’ expectations by 2.5%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
BeautyHealth delivered the highest full-year guidance raise among its peers. The stock is up 15.5% since reporting and currently trades at $1.49.
Read our full, actionable report on BeautyHealth here, it’s free for active Edge members.
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 $3.48 billion, up 3.5% year on year. This number surpassed analysts’ expectations by 2.9%. It was a very strong quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 8.2% since reporting and currently trades at $105.34.
Read our full, actionable report on Estée Lauder here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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