Pricing Initiatives to Aid Spectrum Brands (SPB) in Q4 Earnings
Spectrum Brands Holdings, Inc. SPB is expected to report top and bottom line growth when it reports fourth-quarter fiscal 2023 results on Nov 17, before the opening bell.
The Zacks Consensus Estimate for the fiscal fourth-quarter bottom line is pegged at $1.14 per share, which indicates an increase of 137.5% from the year-ago quarter’s reported figure. The consensus mark has moved up by a couple of cents in the past 30 days. The consensus mark for revenues is pegged at $759.9 million, indicating growth of 1.4% from the figure reported in the year-ago quarter.
In the last reported quarter, the company delivered an earnings surprise of 31.6%. However, it delivered a negative earnings surprise of 27.9%, on average, in the trailing four quarters.
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 benefiting from increased pricing, cost improvements and a favorable mix. Gains from these actions have been aiding the company’s margins. Lower distribution costs, fixed-cost-reduction initiatives and positive pricing impacts are expected to have boosted the EBITDA margin and the bottom line in the to-be-reported quarter.
Our model predicts the adjusted EBITDA margin to increase 210 basis points to 12.1% in the fourth quarter of fiscal 2023.
Spectrum Brands has been progressing well with the Global Productivity Improvement Plan and strategic transformation plans. The Global Productivity Improvement Plan aims to improve the company's operating efficiency and effectiveness while focusing on consumer insights and growth-enabling functions, including technology, marketing and research and development. The majority of the savings are expected to be reinvested into growth initiatives and consumer insights, R&D and marketing across each of the businesses. This is likely to have aided its fiscal fourth-quarter performance.
The company has been streamlining its organizational structure and re-energizing its employee base. It is committed to improving operational efficiencies throughout and limiting risk. It remains focused on transforming into a pure-play global Pet and Home & Garden business.
We expect the company’s Global Pet Care business to deliver revenue growth of 11.2% year over year to $320.2 million in the fiscal fourth quarter.
However, Spectrum Brands is witnessing headwinds in its Home and Garden business due to a greater-than-expected reduction of retail inventory levels. It has been witnessing slower category POS and reduced inventory stemming from retailer inventory management strategies.
Reduced replenishment orders for the pest control category and lower POS are likely to have affected the sales in the Home and Garden business in the to-be-reported quarter. Sluggishness in the small home appliance space due to lower consumer demand and continued increase in retail inventory levels are also likely to have acted as deterrents.
On the last reported quarter’s earnings call, management anticipated sales trends for the Home and Garden to worsen going ahead.
Our model predicts revenues for the Home and Garden business to decline 6.1% year over year to $109.6 million in the fiscal fourth quarter.
What the Zacks Model Unveils
Our proven model predicts a likely 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. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Spectrum Brands has an Earnings ESP of +5.93% and a Zacks Rank of 1.
Other Stocks With Favorable Combinations
Here are some other companies in the Zacks Consumer Discretionary sector, which have the right combination of elements to post an earnings beat on their respective quarters to be reported.
NIKE NKE has an Earnings ESP of +0.45% and a Zacks Rank of 3. The Zacks Consensus Estimate for NIKE’s quarterly revenues is pegged at $13.4 billion, indicating growth of 0.7% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for the quarterly earnings per share stands at 85 cents, which suggests flat results from the year-ago fiscal quarter. The consensus mark for earrings has been unchanged in the past 30 days. NKE has a trailing four-quarter earnings surprise of 27.1%, on average.
Carnival Corp. CCL currently has an Earnings ESP of +17.89% and a Zacks Rank of 3. CCL is likely to register top and bottom-line improvement when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for Carnival’s quarterly revenues is pegged at $5.3 billion, indicating growth of 38.1% from the prior-year quarter’s reported figure.
The consensus mark for the quarterly loss per share is 13 cents, which suggests an improvement from a loss of 85 cents reported in the year-ago fiscal quarter. The consensus mark for loss has widened by a penny in the past 30 days. CCL has a trailing four-quarter earnings surprise of 9.9%, on average.
BrightView BV currently has an Earnings ESP of +6.67% and a Zacks Rank of 3. BV is likely to register top-line growth when it reports fourth-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $748.7 million, suggesting a 3.5% rise from the figure reported in the prior-year quarter.
The consensus mark for BrightView’s fiscal fourth-quarter earnings is pegged at 30 cents per share, suggesting an 18.9% decline from that reported in the year-ago quarter. The consensus mark for earnings has moved down by a penny in the past 30 days. BV has a trailing four-quarter earnings surprise of 38.4%, on average.
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Carnival Corporation (CCL) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
Spectrum Brands Holdings Inc. (SPB) : Free Stock Analysis Report
BrightView Holdings, Inc. (BV) : Free Stock Analysis Report
