Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Spectrum Brands (NYSE:SPB) and the best and worst performers in the household products industry.
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 slower Q1. As a group, revenues missed analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.
While some household products stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2% since the latest earnings results.
Weakest Q1: Spectrum Brands (NYSE:SPB)
A leader in multiple consumer product categories, Spectrum Brands (NYSE:SPB) is a diversified company with a portfolio of trusted brands spanning home appliances, garden care, personal care, and pet care.
Spectrum Brands reported revenues of $675.7 million, down 6% year on year. This print fell short of analysts’ expectations by 2.2%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
“In response to the most recent tariff pressures, we pivoted our operating strategy to maximize cash. In addition, we have paused the import of virtually all finished goods purchases from China until the tariff levels decline to an amount where we can maintain our profitability and margins. I am happy to report that the transition of supply for the U.S. market out of China for our H&G and GPC businesses is happening relatively quickly. For H&G, we expect to have virtually eliminated this exposure by fiscal year-end. For GPC, after beginning the fiscal year with approximately $100 million of U.S. bound product purchases from China, we expect to reduce that exposure to approximately $20 million by fiscal year-end. Our HPC business faces more of a challenge, and our teams are accelerating plans to supply appliances from lower-tariffed countries. On the positive front, HPC is our most globalized business and historically approximately 80% of its profits come from outside of the U.S. market. Our best in class operations teams are hard at work securing new sources from outside of China. We believe that our long-standing relationships with suppliers and strong financial position will result in suppliers prioritizing our products in the transition out of China,” said David Maura, Chairman and Chief Executive Officer of Spectrum Brands.
Unsurprisingly, the stock is down 2.8% since reporting and currently trades at $60.12.
Read our full report on Spectrum Brands here, it’s free.
Best Q1: Colgate-Palmolive (NYSE:CL)
Formed after the 1928 combination between toothpaste maker Colgate and soap maker Palmolive-Peet, Colgate-Palmolive (NYSE:CL) is a consumer products company that focuses on personal, household, and pet products.
Colgate-Palmolive reported revenues of $4.91 billion, down 3.1% year on year, outperforming analysts’ expectations by 0.6%. The business had a satisfactory quarter with a solid beat of analysts’ EBITDA estimates but a miss of analysts’ organic revenue estimates.
Colgate-Palmolive pulled off the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.8% since reporting. It currently trades at $91.
Is now the time to buy Colgate-Palmolive? Access our full analysis of the earnings results here, it’s free.
Clorox (NYSE:CLX)
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 $1.67 billion, down 8% year on year, falling short of analysts’ expectations by 3.3%. It was a softer quarter as it posted a miss of analysts’ adjusted operating income and organic revenue estimates.
Clorox delivered the slowest revenue growth in the group. As expected, the stock is down 4.4% since the results and currently trades at $132.30.
Read our full analysis of Clorox’s results here.
Procter & Gamble (NYSE:PG)
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 $19.78 billion, down 2.1% year on year. This print lagged analysts' expectations by 1.9%. More broadly, it was a mixed quarter as it also logged a decent beat of analysts’ EBITDA estimates but full-year EPS guidance slightly missing analysts’ expectations.
The stock is flat since reporting and currently trades at $165.01.
Read our full, actionable report on Procter & Gamble here, it’s free.
Central Garden & Pet (NASDAQ:CENT)
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 $833.5 million, down 7.4% year on year. This result missed analysts’ expectations by 5.1%. Overall, it was a slower quarter as it also recorded full-year EPS guidance missing analysts’ expectations.
The stock is up 5.3% since reporting and currently trades at $36.27.
Read our full, actionable report on Central Garden & Pet here, it’s free.
Market Update
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 U.S. 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, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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