Q4 Earnings Roundup: Estée Lauder (NYSE:EL) And The Rest Of The Personal Care Segment
Earnings results often indicate what direction a company will take in the months ahead. With Q4 behind us, let’s have a look at Estée Lauder (NYSE:EL) 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 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 7% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 20.6% 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 $4.00 billion, down 6.4% year on year. This print exceeded analysts’ expectations by 0.7%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
“Today, we are excited to launch Beauty Reimagined, a bold strategic vision to restore sustainable sales growth and achieve a solid double-digit adjusted operating margin over the next few years as we aim to become the best consumer-centric prestige beauty company,” said Stéphane de La Faverie, President and Chief Executive Officer.
Estée Lauder Total Revenue
The stock is down 38.6% since reporting and currently trades at $50.88.
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, outperforming analysts’ expectations by 14.4%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Olaplex Total Revenue
Olaplex pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 24.1% since reporting. It currently trades at $1.04.
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 significant miss of analysts’ EPS estimates and a miss of analysts’ organic revenue estimates.
Coty delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 30.1% since the results and currently trades at $4.73.
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. This result surpassed analysts’ expectations by 3.1%. It was a stunning quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is down 22.8% since reporting and currently trades at $4.39.
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 $213.6 million, down 3.4% year on year. This number topped analysts’ expectations by 2.3%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
The stock is down 25.5% since reporting and currently trades at $23.81.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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