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Q1 Earnings Highs And Lows: Bath and Body Works (NYSE:BBWI) Vs The Rest Of The Beauty and Cosmetics Retailer Stocks

BBWI Cover Image

As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the beauty and cosmetics retailer industry, including 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 mixed Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

Luckily, beauty and cosmetics retailer stocks have performed well with share prices up 21.4% on average since the latest earnings results.

Weakest Q1: 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 $1.42 billion, up 2.9% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with EPS guidance for next quarter missing analysts’ expectations.

Daniel Heaf, CEO of Bath & Body Works, commented, “I’m honored to join this iconic brand with a deep sense of purpose and a powerful foundation. I have already had the privilege of meeting many associates across the company, and I’m incredibly impressed by the passion, dedication, and talent across our teams. I believe we’re incredibly well positioned to define and lead the home fragrance and beauty categories globally and accelerate growth.”

Bath and Body Works Total Revenue

Interestingly, the stock is up 8.8% since reporting and currently trades at $33.14.

Read our full report on Bath and Body Works here, it’s free.

Best Q1: 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 $2.85 billion, up 4.5% year on year, outperforming analysts’ expectations by 1.9%. The business had a strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.

Ulta Total Revenue

Ulta delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 13.3% since reporting. It currently trades at $478.34.

Is now the time to buy Ulta? Access our full analysis of the earnings results here, it’s free.

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 $883.1 million, down 2.8% year on year, falling short of analysts’ expectations by 2%. It was a mixed quarter as it posted a narrow beat of analysts’ gross margin estimates.

Sally Beauty delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 25.7% since the results and currently trades at $10.28.

Read our full analysis of Sally Beauty’s results here.

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 $223.8 million, up 11.9% year on year. This number missed analysts’ expectations by 0.8%. More broadly, it was actually a strong quarter as it recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Warby Parker scored the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is up 37.8% since reporting and currently trades at $22.24.

Read our full, actionable report on Warby Parker here, it’s free.

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.

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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