Joe Raedle
Evercore ISI's latest scan of household buying trends indicated that the economic reopening continues to drive the composition of shopping baskets even behind the macro backdrop. Analyst Robert Ottenstein said the makeup category benefits most, while volumes for some of the largest household categories remain depressed or weakening.
An upswing in makeup and higher prices in haircare is said to potentially benefit Coty (COTY) and Olaplex Holdings (OLPX), while slowdowns in detergents, tissue paper and diapers weigh on Procter & Gamble (NYSE:PG) and Kimberly-Clark. On the flip side, Ottenstein said the reopening is weighing most on vitamins, a category that normally behaves well in recessions.
Price/mix for household products is still holding at +16% per the recent data, but downticks suggest trade-down in detergents, foil, diapers, and bleach, historically among the most price sensitive.
Private label leads pricing in household categories, supporting the Evercore thesis that many retailers are aimed at protecting their profit pools to counter consumer trade-down. That is seen supporting profit recoveries for Reynolds Consumer Products (REYN), Energizer Holdings (ENR), Kimberly-Clark (KMB), and Procter & Gamble (PG) in 2023
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