Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Bath and Body Works (NYSE: BBWI) and its peers.
Beauty and cosmetics retailers understand that beauty is in the eye of the beholder, but a little lipstick, nail polish, and glowing skin also help the cause. These stores—which mostly cater to consumers but can also garner the attention of salon pros—aim to be a one-stop personal care and beauty products shop with many brands across many categories. E-commerce is changing how consumers buy cosmetics, so these retailers are constantly evolving to meet the customer where and how they want to shop.
The 4 beauty and cosmetics retailer stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 5.7% on average since the latest earnings results.
Weakest Q2: Bath and Body Works (NYSE: BBWI)
Spun off from L Brands in 2020, Bath & Body Works (NYSE: BBWI) is a personal care and home fragrance retailer where consumers can find specialty shower gels, scented candles for the home, and lotions.
Bath and Body Works reported revenues of $1.55 billion, up 1.5% year on year. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with EPS guidance for next quarter missing analysts’ expectations significantly and a miss of analysts’ EBITDA estimates.
Bath and Body Works delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 17.1% since reporting and currently trades at $26.14.
Read our full report on Bath and Body Works here, it’s free for active Edge members.
Best Q2: Ulta (NASDAQ: ULTA)
Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.
Ulta reported revenues of $2.79 billion, up 9.3% year on year, outperforming analysts’ expectations by 4.2%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.
Ulta delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.3% since reporting. It currently trades at $518.30.
Is now the time to buy Ulta? Access our full analysis of the earnings results here, it’s free for active Edge members.
Warby Parker (NYSE: WRBY)
Founded in 2010, Warby Parker (NYSE: WRBY) designs, manufactures, and sells eyewear, including prescription glasses, sunglasses, and contact lenses, through its e-commerce platform and physical retail locations.
Warby Parker reported revenues of $214.5 million, up 13.9% year on year, exceeding analysts’ expectations by 0.7%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Warby Parker delivered the fastest revenue growth but had the weakest full-year guidance update in the group. As expected, the stock is down 12.7% since the results and currently trades at $21.21.
Read our full analysis of Warby Parker’s results here.
Sally Beauty (NYSE: SBH)
Catering to both everyday consumers as well as salon professionals, Sally Beauty (NYSE: SBH) is a retailer that sells salon-quality beauty products such as makeup and haircare products.
Sally Beauty reported revenues of $933.3 million, flat year on year. This result was in line with analysts’ expectations. It was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
Sally Beauty had the slowest revenue growth among its peers. The stock is up 54.7% since reporting and currently trades at $15.42.
Read our full, actionable report on Sally Beauty here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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