Skincare company BeautyHealth (NASDAQ:SKIN) announced better-than-expected results in Q1 CY2024, with revenue down 5.7% year on year to $81.4 million. On the other hand, next quarter's revenue guidance of $99 million was less impressive, coming in 8.4% below analysts' estimates. It made a GAAP loss of $0.10 per share, improving from its loss of $0.15 per share in the same quarter last year.

Is now the time to buy BeautyHealth? Find out in our full research report.

BeautyHealth (SKIN) Q1 CY2024 Highlights:

• Revenue: $81.4 million vs analyst estimates of $80.65 million (small beat)

• EPS: -$0.10 vs analyst estimates of -$0.14 (26.7% beat)

• Revenue Guidance for Q2 CY2024 is $99 million at the midpoint, below analyst estimates of $108.1 million

• Full year adjusted EBITDA guidance of at least $4 million was ahead

• Gross Margin (GAAP): 59.5%, down from 62.7% in the same quarter last year

• Market Capitalization: $423.5 million

"Our first quarter results demonstrate the progress we are making on our near-term strategic priorities, including sales excellence, operational excellence, and financial discipline,” said BeautyHealth Chief Executive Officer Marla Beck.

Operating in the emerging beauty health category, the appropriately named BeautyHealth (NASDAQ:SKIN) is a skincare company best known for its Hydrafacial product that cleanses and hydrates skin.

Personal Care

While personal care products products may seem more discretionary than food, consumers tend to maintain or even boost their spending on the category during tough times. This phenomenon is known as "the lipstick effect" by economists, which states that consumers still want some semblance of affordable luxuries like beauty and wellness when the economy is sputtering. Consumer tastes are constantly changing, and personal care companies are currently responding to the public’s increased desire for ethically produced goods by featuring natural ingredients in their products.

Sales Growth

BeautyHealth is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.

As you can see below, the company's annualized revenue growth rate of 43.1% over the last three years was incredible for a consumer staples business.

This quarter, BeautyHealth reported a rather uninspiring 5.7% year-on-year revenue decline to $81.4 million in revenue, in line with Wall Street's estimates. The company is guiding for a 15.7% year-on-year revenue decline next quarter to $99 million, a reversal from the 13.5% year-on-year increase it recorded in the same quarter last year. Looking ahead, Wall Street expects sales to grow 4.8% over the next 12 months, an acceleration from this quarter.