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 Olaplex (NASDAQ:OLPX) and the rest of the personal care stocks fared in Q4.
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 Q4. As a group, revenues beat analysts’ consensus estimates by 3.7% while next quarter’s revenue guidance was 6.9% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 21.2% since the latest earnings results.
Best Q4: 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 $100.7 million, down 9.8% year on year. This print exceeded analysts’ expectations by 14.4%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Amanda Baldwin, OLAPLEX’s Chief Executive Officer, commented: "I am pleased with our end to the year with our fourth quarter results ahead of the expectations we shared in November. During 2024 we laid a critical foundation for our business and brand transformation and I remain confident and optimistic about the strategies put in place as we step into a meaningful year ahead for the business."
Olaplex Total Revenue
Olaplex achieved the biggest analyst estimates beat and highest full-year guidance raise of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 10.9% since reporting and currently trades at $1.22.
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 $99.84 million, up 10.6% year on year, outperforming analysts’ expectations by 3.1%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The Honest Company Total Revenue
The stock is down 20.7% since reporting. It currently trades at $4.51.
With a portfolio boasting many household brands, Coty (NYSE:COTY) is a beauty products powerhouse spanning cosmetics, fragrances, and skincare.
Coty reported revenues of $1.67 billion, down 3.3% year on year, falling short of analysts’ expectations by 3.1%. It was a softer quarter as it posted a miss of analysts’ EPS and organic revenue estimates.
Coty delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 32.1% since the results and currently trades at $4.60.
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 $445.6 million, down 8.8% year on year. This print beat analysts’ expectations by 2.2%. Aside from that, it was a slower quarter as it logged revenue guidance for next quarter missing analysts’ expectations and a significant miss of analysts’ gross margin estimates.
The stock is down 14.5% since reporting and currently trades at $5.48.
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 $4.00 billion, down 6.4% year on year. This result surpassed analysts’ expectations by 0.7%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is down 34% since reporting and currently trades at $54.62.
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.
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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