Winners And Losers Of Q3: Reynolds (NASDAQ:REYN) Vs The Rest Of The Household Products Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how household products stocks fared in Q3, starting with Reynolds (NASDAQ:REYN).
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 mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was 1.1% below.
In light of this news, share prices of the companies have held steady as they are up 2.8% 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 $910 million, down 2.7% year on year. This print exceeded analysts’ expectations by 0.8%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ organic revenue estimates but a miss of analysts’ gross margin estimates.
“We are building on our leadership across household products and delivered another quarter of strong financial performance as a result,” said Lance Mitchell, President and Chief Executive Officer of Reynolds Consumer Products.
Reynolds Total Revenue
Reynolds scored the highest full-year guidance raise of the whole group. Still, the market seems discontent with the results. The stock is down 7% since reporting and currently trades at $27.72.
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 $1.76 billion, up 27.1% year on year, outperforming analysts’ expectations by 7.6%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA and organic revenue estimates.
Clorox Total Revenue
Clorox delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 7% since reporting. It currently trades at $167.53.
Enhancing the lives of both pets and homeowners, Central Garden & Pet (NASDAQ:CENT) is a leading producer and distributor of essential products for pet care, lawn and garden maintenance, and pest control.
Central Garden & Pet reported revenues of $669.5 million, down 10.8% year on year, falling short of analysts’ expectations by 5.9%. It was a softer quarter as it posted a significant miss of analysts’ organic revenue and adjusted operating income estimates.
Central Garden & Pet delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 5.1% since the results and currently trades at $40.79.
Founded by candle maker William Procter and soap maker James Gamble, Proctor & Gamble (NYSE:PG) is a consumer products behemoth whose product portfolio spans everything from facial tissues to laundry detergent to feminine care to men’s grooming.
Procter & Gamble reported revenues of $21.74 billion, flat year on year. This result came in 1.1% below analysts' expectations. Taking a step back, it was a mixed quarter as it also recorded a decent beat of analysts’ EPS estimates but gross margin in line with analysts’ estimates.
The stock is up 1.6% since reporting and currently trades at $175.11.
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 $4.95 billion, down 3.5% year on year. This print lagged analysts' expectations by 1.9%. Overall, it was a slower quarter as it also logged a miss of analysts’ organic revenue estimates.
The stock is down 5.3% since reporting and currently trades at $136.69.
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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