Personal Care Stocks Q2 Teardown: Estée Lauder (NYSE:EL) Vs The Rest

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 Estée Lauder (NYSE:EL) and the rest of the personal care stocks fared in Q2.

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 slower Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 14.6% below.

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. This year has been a different story as mixed inflation signals have led to market volatility. However, personal care stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.

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 $3.87 billion, up 7.3% year on year. This print exceeded analysts’ expectations by 1.8%. Overall, it was a decent quarter for the company with an impressive beat of analysts’ earnings estimates but underwhelming earnings guidance for the next quarter.

Fabrizio Freda, President and CEO said, “In fiscal 2024’s fourth quarter, we achieved our organic sales outlook and exceeded expectations for profitability, closing a difficult year. Organic sales and adjusted EPS returned to growth in the second half.

Unsurprisingly, the stock is down 2.1% since reporting and currently trades at $93.

Is now the time to buy Estée Lauder? Access our full analysis of the earnings results here, it’s free.

Best Q2: 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 $93.05 million, up 10.1% year on year, outperforming analysts’ expectations by 6.8%. It was a very strong quarter for the company with an impressive beat of analysts’ gross margin estimates and a solid beat of analysts’ earnings estimates.

The Honest Company delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 35.6% since reporting. It currently trades at $4.40.

Is now the time to buy The Honest Company? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: 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 $90.6 million, down 22.9% year on year, falling short of analysts’ expectations by 8.1%. It was a weak quarter for the company with revenue guidance for next quarter missing analysts’ expectations.

BeautyHealth had the weakest performance against analyst estimates and weakest full-year guidance update in the group. Interestingly, the stock is up 24.5% since the results and currently trades at $1.61.

Read our full analysis of BeautyHealth’s results here.

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%. More broadly, it was a weak quarter for the company with underwhelming earnings guidance for the full year and a miss of analysts’ earnings estimates.

The stock is down 13.7% since reporting and currently trades at $39.54.

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

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 $110.6 million, down 5.1% year on year, falling short of analysts’ expectations by 1.6%. Overall, it was a weak quarter for the company with full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.

The stock is down 6% since reporting and currently trades at $13.73.

Read our full, actionable report on Nature's Sunshine here, it’s free.

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