Household Products Stocks Show Mixed Q3 Results, Investors Look for Opportunities Amidst Trends and Challenges

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. The household products industry has been stable in recent years, but it's essential to understand which trends benefit or hurt specific companies. In this article, we'll take a closer look at the performance of Energizer (NYSE:ENR) and other major household product companies during Q3.

Stable Investments with Emerging Trends

Household products stocks are often considered stable investments because many of their products are essential for everyday life. However, with evolving consumer preferences, there's been a growing emphasis on eco-friendly and sustainable offerings. Companies that innovate quickly to meet these demands can thrive, but those that fail to adapt may struggle.

Energizer (NYSE:ENR) - A Mixed Quarter

Masterminds behind the iconic Energizer Bunny mascot, Energizer is one of the world's largest manufacturers of batteries. The company reported revenues of $805.7 million in Q3, which was flat year on year and aligned with analysts' expectations. Despite this performance, the company had a mixed quarter with full-year EBITDA guidance exceeding analysts' estimates but missing gross margin forecasts.

President and CEO Mark LaVigne stated that the company's solid performances across both Battery and Auto Care drove adjusted earnings growth above initial expectations.

Energizer Total RevenueInterestingly, the stock is up 2.2% since reporting and currently trades at $34.89. Is now the time to buy Energizer?

Best Q3: Clorox (NYSE:CLX)

Founded in 1913 with bleach as its sole product offering, Clorox today is a consumer products giant whose portfolio spans everything from bleach to skincare to salad dressing to kitty litter. The company reported revenues of $1.76 billion in Q3, up 27.1% year on year and outperforming analysts' expectations by 7.6%. This was an exceptional quarter for Clorox with impressive beats of EBITDA and organic revenue estimates.

Clorox Total Revenue

The market seems content with the results as the stock is up 1.8% since reporting. It currently trades at $159.43. Is now the time to buy Clorox?

Slowest Q3: Central Garden & Pet (NASDAQ:CENT)

Enhancing the lives of both pets and homeowners, Central Garden & Pet is a leading producer and distributor of essential products for pet care, lawn and garden maintenance, and pest control. The company reported revenues of $669.5 million in Q3, down 10.8% year on year and falling short of analysts' expectations by 5.9%. This was a softer quarter as it posted significant misses of organic revenue and adjusted operating income estimates.

Central Garden & Pet delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is flat since the results and currently trades at $38.80.

WD-40 (NASDAQ:WDFC) - A Strong but Weaker Quarter

Short for “Water Displacement perfected on the 40th try”, WD-40 is a renowned American consumer goods company known for its iconic and versatile spray, WD-40 Multi-Use Product. The company reported revenues of $156 million in Q3, up 11.1% year on year and surpassing analysts' expectations by 4.6%. However, it was a slower quarter as it logged significant misses of EBITDA estimates and full-year EPS guidance.

WD-40 had the weakest full-year guidance update among its peers. The stock is down 9.3% since reporting and currently trades at $240.11.

Colgate-Palmolive (NYSE:CL) - A Mixed Quarter

Formed after the combination of toothpaste maker Colgate and soap maker Palmolive-Peet in 1928, Colgate-Palmolive is a consumer products company focusing on personal, household, and pet products. The company reported revenues of $5.03 billion in Q3, up 2.4% year on year and beating analysts' expectations by 0.5%. Aside from this performance, it was a mixed quarter as the company also recorded decent beats of organic revenue estimates but slight misses of EBITDA estimates.

The stock is down 8.5% since reporting and currently trades at $91.30.

Market Update: A Soft Landing

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting a successful soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs.

However, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Conclusion

Household products stocks have shown mixed results in Q3, with some companies performing better than others. Energizer reported a flat year-on-year revenue growth but exceeded analysts' expectations for EBITDA guidance. Clorox, on the other hand, outperformed analysts' expectations with impressive beats of EBITDA and organic revenue estimates.

Investors must carefully assess these results to determine whether it's time to buy or hold specific stocks. As the market continues to navigate uncertainty, understanding trends and challenges in the household products industry can provide valuable insights for informed investment decisions.