Factors Likely to Decide Newell's (NWL) Fate in Q2 Earnings
Newell Brands Inc. NWL is expected to have witnessed year-over-year declines in the top and bottom lines in second-quarter 2023. The company’s quarterly results are scheduled on Jul 28, before the opening bell.
The Zacks Consensus Estimate for second-quarter bottom line is pegged at 13 cents, which suggests a decline of 77.2% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. For quarterly revenues, the consensus mark is pegged at $2.15 billion, indicating a decline of 15% from the figure reported in the year-ago quarter.
In the last reported quarter, the Atlanta, GA-based company delivered a negative earnings surprise of 50%. Its bottom line beat the Zacks Consensus Estimate by 4.4%, on average, in the trailing four quarters.
Newell Brands Inc. Price and EPS Surprise
Newell Brands Inc. price-eps-surprise | Newell Brands Inc. Quote
Key Factors to Note
Newell has been reeling under a tough environment, reduced inventory and dismal demand for general merchandise categories. Also, the adverse impacts of the sale of the Connected Home & Security business, as well as unfavorable foreign exchange, are likely to have dented the company’s performance in the quarter under review.
NWL has been witnessing slowing retail sales, high household debt and inflation on essentials, such as food, energy and housing. These factors are likely to have affected discretionary purchases. Also, continued normalization in demand across home-based categories is expected to have been concerning.
On its last earnings report, management anticipated second-quarter 2023 sales to be $2.13-$2.24 billion, with a core sales decline of 14-10%. This also includes a 1-2% headwind from currency and certain category exits. For the quarter, the company expected a bottom line of 10-18 cents per share.
We expect the company’s second-quarter total revenues to decline 15.4% year over year to $2.1 billion and the bottom line to plunge 77.2% to 13 cents per share.
However, the company has been undertaking significant actions to improve productivity and efficiency by accelerating fuel productivity plans and driving automation. Increased focus on revenue growth management, aggressive efforts to reduce SKU, gains from Project Ovid and supply network optimization bodes well.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Newell this season. 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.
Newell currently has an Earnings ESP of +2.63% and a Zacks Rank of 5 (Strong Sell).
Stocks With the Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Beyond Meat BYND currently has an Earnings ESP of +14.60% and a Zacks Rank of 2. BYND is expected to register a top-line decrease when it reports second-quarter 2023 numbers. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Beyond Meat’s quarterly revenues is pegged at $111.3 million, calling for a decline of 24.3% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 81 cents, which suggests an improvement of 47.1% from the figure reported in the year-ago quarter. BYND has a trailing four-quarter negative earnings surprise of 14.1%, on average.
Celsius Holdings, Inc. CELH currently has an Earnings ESP of +10.04% and a Zacks Rank #2. The company’s top and bottom lines are expected to increase year over year when it reports second-quarter 2023 results. The Zacks Consensus Estimate for Celsius Holdings’ quarterly revenues is pegged at $278.9 million, calling for growth of 81.1% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the quarterly EPS is pegged at 31 cents, indicating an improvement from 12 cents reported in the year-ago quarter. CELH has a trailing four-quarter negative earnings surprise of 99.1%, on average.
Church & Dwight CHD currently has an Earnings ESP of +0.51% and a Zacks Rank #2. The company’s top and bottom lines are expected to increase year over year when it reports second-quarter 2023 results. The Zacks Consensus Estimate for Church & Dwight’s quarterly revenues is pegged at $1.4 billion, which implies a rise of 7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the quarterly EPS is pegged at 79 cents, which indicates a 4% increase from the year-ago period’s reported figure. CHD has a trailing four-quarter earnings surprise of 9.8%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Newell Brands Inc. (NWL) : Free Stock Analysis Report
Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
Beyond Meat, Inc. (BYND) : Free Stock Analysis Report
