Q2 Earnings Outperformers: Reynolds (NASDAQ:REYN) And The Rest Of The Household Products Stocks
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 Reynolds (NASDAQ:REYN) and the rest of the household products stocks fared in Q2.
Household products stocks are generally stable investments, as many of the industry's products are essential for a comfortable and functional living space. Recently, there's been a growing emphasis on eco-friendly and sustainable offerings, reflecting the evolving consumer preferences for environmentally conscious options. These trends can be double-edged swords that benefit companies who innovate quickly to take advantage of them and hurt companies that don't invest enough to meet consumers where they want to be with regards to trends.
The 10 household products stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 0.5% above.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Thankfully, household products stocks have been resilient with share prices up 5% on average since the latest earnings results.
Reynolds (NASDAQ:REYN)
Best known for its aluminum foil, Reynolds (NASDAQ:REYN) is a household products company whose products focus on food storage, cooking, and waste.
Reynolds reported revenues of $930 million, down 1.1% year on year. This print exceeded analysts’ expectations by 4.2%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ gross margin and organic revenue growth estimates.
“Strong retail revenue performance in each of our business units resulted in RCP outperforming our categories during the quarter,” said Lance Mitchell, CEO and President of Reynolds Consumer Products.
Reynolds Total Revenue
Reynolds delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 3.3% since reporting and currently trades at $29.53.
A leader in multiple consumer product categories, Spectrum Brands (NYSE:SPB) is a diversified company with a portfolio of trusted brands spanning home appliances, garden care, personal care, and pet care.
Spectrum Brands reported revenues of $779.4 million, up 6% year on year, outperforming analysts’ expectations by 3.8%. The business had a very strong quarter with an impressive beat of analysts’ organic revenue growth estimates.
Spectrum Brands Total Revenue
The market seems happy with the results as the stock is up 13.1% since reporting. It currently trades at $92.57.
Originally founded as a Wisconsin paper mill in 1872, Kimberly-Clark (NYSE:KMB) is now a household products powerhouse known for personal care and tissue products.
Kimberly-Clark reported revenues of $5.03 billion, down 2% year on year, falling short of analysts’ expectations by 1.3%. It was a slower quarter as it posted a miss of analysts’ organic revenue growth estimates and a miss of analysts’ gross margin estimates.
As expected, the stock is down 3.1% since the results and currently trades at $139.62.
Best known for its Arm & Hammer baking soda, Church & Dwight (NYSE:CHD) is a household and personal care products company with a vast portfolio that spans laundry detergent to toothbrushes to hair removal creams.
Church & Dwight reported revenues of $1.51 billion, up 3.9% year on year. This number was in line with analysts’ expectations. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ organic revenue growth estimates but underwhelming earnings guidance for the full year.
The stock is up 1% since reporting and currently trades at $101.04.
Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.
Clorox reported revenues of $1.90 billion, down 5.7% year on year. This result missed analysts’ expectations by 2.4%. Aside from that, it was a strong quarter as it produced an impressive beat of analysts’ organic revenue growth estimates.
Clorox had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 20.3% since reporting and currently trades at $161.30.
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