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Soft Inventory to Hurt Prestige Consumer's (PBH) Q4 Earnings

Zacks Equity Research

Prestige Consumer Healthcare Inc. PBH is scheduled to release fourth-quarter fiscal 2019 results on May 9, before market open. The company’s earnings have surpassed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 2.7%. Let’s see what awaits this quarterly release.

Factors at Play

We expect Prestige Consumer’s forthcoming results to gain from prudent acquisitions. Some of the yielding buyouts of the company are BC & Goody, Fleet, DenTek Holdings and Hydralyte. The company is on track to augment brands and marketing capabilities of acquired businesses.

Additionally, a strong cash position enables the company to strengthen business, reduce debt levels and support profitability. Such strong financial status is expected to boost the upcoming results.

On the flip side, we note that the copmpany is prone to certain headwinds that might make matters sour. Low inventory levels are marring performance in the North American and International units. Management expects inventory headwinds to persist till fiscal 2020, which affects expectations for the quarter to be reported. Also, adverse currency impacts are likely to impair results.

How are Estimates Faring?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 70 cents, suggesting an increase of nearly 13% from 62 cents in the year-ago quarter. The current estimate has been stable in the past 30 days.

However, the consensus mark for revenues is pegged at $236.9 million, calling for a decline of approximately 7.5% from the year-ago quarter’s figure.

What Does the Zacks Model Say?

Our proven model does not show that Prestige Consumer is likely to beat estimates in fourth-quarter fiscal 2019. A stock needs to have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Prestige Consumer has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell), which make surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Estimates

Here are a few companies you may want to consider as our model shows that they have the right combination of elements to beat earnings.

lululemon athletica LULU has an Earnings ESP of +0.51% and a Zacks Rank #1.

Rent-A-Center RCII has an Earnings ESP of +2.13% and a Zacks Rank #1.

Deckers Outdoor Corporation DECK has an Earnings ESP of +53.19% and a Zacks Rank #3.

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