Home / Business and Economy / Lipstick Effect: Beauty Brands Defy Economic Downturn
Lipstick Effect: Beauty Brands Defy Economic Downturn
25 Nov
Summary
- Consumers maintain beauty spending during economic slowdowns.
- Inter Parfums' Q3 revenue met expectations, but margins missed.
- Nature's Sunshine reported strong Q3 growth, stock surged.
The personal care sector demonstrates resilience, with consumers continuing to invest in affordable luxuries like beauty products even during economic downturns, a trend termed the "lipstick effect." This Q3, the companies tracked reported revenues in line with expectations, with forward guidance slightly exceeding estimates.
Inter Parfums, known for its luxury fragrances, reported Q3 revenues of $429.6 million, a 1.2% increase year-over-year, matching analyst predictions. However, the company experienced a mixed quarter with a strong EBITDA beat but a notable miss on gross margin estimates. The stock has seen a decline of 12.8% since its earnings release.
Conversely, Nature's Sunshine showcased a stellar Q3 performance. The company's revenues rose 12% to $128.3 million, outpacing analyst expectations by 6.7%. With impressive beats on EPS and EBITDA estimates, Nature's Sunshine recorded the most significant analyst estimate beat among its peers, resulting in a 52.6% stock price surge.
