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Factors to Influence Spectrum Brands' (SPB) Q1 Earnings

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Spectrum Brands Holdings, Inc. SPB is slated to report first-quarter fiscal 2022 results on Feb 4, before the opening bell. The global consumer products company is likely to have witnessed revenue and earnings declines in the to-be-reported quarter.

The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at 5 cents per share, which indicates a decline of 97.7% from the year-ago reported figure. The consensus mark has declined 50% in the past 30 days. The consensus mark for revenues is pegged at $762.6 million, indicating a decline of 33.4% from the figure reported in the year-ago quarter.

In the last reported quarter, the company delivered a negative earnings surprise of 28.3%. Nonetheless, it delivered an earnings surprise of 54.2%, on average, in the trailing four quarters.

Spectrum Brands Holdings Inc. Price and EPS Surprise

Spectrum Brands Holdings Inc. Price and EPS Surprise
Spectrum Brands Holdings Inc. Price and EPS Surprise

Spectrum Brands Holdings Inc. price-eps-surprise | Spectrum Brands Holdings Inc. Quote

Factors to Note

Spectrum Brands has been witnessing sluggish gross margin owing to elevated freight and raw-material costs. It is also likely to have experienced SG&A deleverage, driven by strategic acquisitions, a rise in marketing investments and inflation. This is expected to have weighed on the company’s bottom line in the to-be-reported quarter. On the last reported quarter’s earnings call, management anticipated inflationary pressure to be more pronounced in the first half of fiscal 2022.

SPB’s Home & Garden segment is expected to have been impacted by reduced repellents and insecticide sales. Lower volumes and increased marketing investments are also likely to have marred the segment’s EBITDA margins.

Nevertheless, the company has been benefiting from continued strength in the global pet care category. The pet segment is expected to have witnessed steady growth in the fiscal first quarter, backed by solid demand, a pipeline of robust innovation and growth strategies.

SPB has also been on track with the Global Productivity Improvement Plan, which aims at improving operating efficiency and effectiveness. The plan has been focused on consumer insights and growth-enabling functions including technology, marketing, and research and development. Such endeavors are likely to have provided some cushion to the top- and bottom-line performances in the fiscal first quarter.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Spectrum Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Spectrum Brands has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Oxford Industries OXM has an Earnings ESP of +2.97% and a Zacks Rank #1 at present. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings has moved 2.3% north to $1.35 per share in the past 30 days, indicating a 938.5% rise from the year-ago reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.

Oxford Industries’ top line is expected to have increased year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $295.3 million, which suggests a rise of 33.4% from the figure reported in the prior-year quarter. OXM delivered an earnings surprise of 96.7%, on average, in the trailing four quarters.

Gildan Activewear GIL currently has an Earnings ESP of +9.57% and a Zacks Rank #2 at present. The company is likely to register an increase in the bottom line when it reports fourth-quarter 2021. The Zacks Consensus Estimate for quarterly earnings has moved 3.6% upward in the past 30 days to 58 cents per share, suggesting 28.9% growth from the year-ago reported number.

Gildan Activewear’s top line is expected to have appreciated year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $731 million, which suggests a rise of 5.9% from the figure reported in the prior-year quarter. GIL delivered an earnings surprise of 85%, on average, in the trailing four quarters.

PVH Corp PVH has an Earnings ESP of +0.20% and a Zacks Rank of 3 at present. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings has remained stable at $1.98 per share in the past 30 days, suggesting a surge of 621.1% from the year-ago reported number.

PVH Corp’s top line is expected to have improved year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.39 billion, which suggests a rise of 14.4% from the figure reported in the prior-year quarter. PVH delivered an earnings surprise of 72.3%, on average, in the trailing four quarters

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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