Reflecting On Beauty and Cosmetics Retailer Stocks’ Q3 Earnings: Bath and Body Works (NYSE:BBWI)

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 Bath and Body Works and the rest of the beauty and cosmetics retailer stocks fared in Q3.

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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.7%.

Luckily, beauty and cosmetics retailer stocks have performed well with share prices up 15.1% on average since the latest earnings results.

Weakest Q3: Bath and Body Works

Spun off from L Brands in 2020, Bath & Body Works 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 $1.59 billion, flat year on year. This print fell short of analysts’ expectations by 2.7%. Overall, it was a disappointing quarter for the company with full-year EPS guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.

Daniel Heaf, chief executive officer of Bath & Body Works, commented, “Today, we are excited to announce a comprehensive transformation plan to revitalize Bath & Body Works across brand, product, and marketplace. This plan, the Consumer First Formula, focuses our investments in our four largest revenue driving opportunities - creating disruptive and innovative product, reigniting our brand, winning in the marketplace, and operating with speed and efficiency. These initiatives aim to attract new, younger consumers to the brand and unlock our next era of growth.”

Bath and Body Works delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 2.4% since reporting and currently trades at $21.54.

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

Best Q3: Ulta

Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty is an American retailer that sells makeup, skincare, haircare, and fragrance products.

Ulta reported revenues of $2.86 billion, up 12.9% year on year, outperforming analysts’ expectations by 5.2%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ revenue estimates.

Ulta delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.2% since reporting. It currently trades at $636.72.

Warby Parker

Founded in 2010, Warby Parker 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 $221.7 million, up 15.2% year on year, falling short of analysts’ expectations by 1.2%. Still, it was a satisfactory quarter as it posted a beat of analysts’ EPS estimates.

Warby Parker delivered the fastest revenue growth but had the weakest full-year guidance update in the group. The company reported 2.66 million active customers, up 9.5% year on year. Interestingly, the stock is up 36.9% since the results and currently trades at $26.07.

Read our full analysis of Warby Parker’s results here.

Sally Beauty

Catering to both everyday consumers as well as salon professionals, Sally Beauty is a retailer that sells salon-quality beauty products such as makeup and haircare products.

Sally Beauty reported revenues of $947.1 million, up 1.3% year on year. This print topped analysts’ expectations by 1.6%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.

Sally Beauty pulled off the highest full-year guidance raise among its peers. The stock is up 1.8% since reporting and currently trades at $14.95.

Read our full, actionable report on Sally Beauty here, it’s free.