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Estee Lauder (EL) to Report Q1 Earnings: What's in Store?
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Estée Lauder Companies Inc. (EL - Free Report) is set to report first-quarter fiscal 2017 results on Nov 2, before the opening bell. Last quarter, the company posted a positive earnings surprise of 7.5%. The company has surpassed the Zacks Consensus Estimate in all the previous four quarters with an average positive surprise of 14.99%.
Let’s see how things are shaping up prior to this announcement.
Estée Lauder has been posting better-than-expected earnings results over the past several quarters on the back of solid organic sales growth, product innovation, acquisitions and cost-saving measures. We expect these positives to have a favorable impact on the to-be-reported quarter as well. Last quarter, Estee Lauder launched Leading Beauty Forward, a multi-year initiative to increase efficiency, speed to market and agility. This is expected to affect top line in the to-be-reported quarter.
However, macroeconomic pressures have been hurting sales of Estée Lauder’s prestige beauty brands. Slow retail growth in China and soft sales in travel retail business are likely to affect sales in the to-be-reported quarter. Moreover, destocking in the Middle East and soft tourism in France are expected to impact top line negatively during first-quarter fiscal 2017.
Earnings Whispers
Our proven model does not conclusively show that Estée Lauder is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to post earnings beat. However, that is not the case here as you will see below:
Zacks ESP: Earnings ESP for Estée Lauder is -1.27% as the Most Accurate estimate is pegged at 78 cents and the Zacks Consensus Estimate stands higher at 79 cents.
Zacks Rank: Estée Lauder has a Zacks Rank #3. However, our criteria of earnings beat has been let down by an Earnings ESP of -1.27%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that investors may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Hormel Foods Corporation. (HRL - Free Report) with an Earnings ESP of +4.55% and a Zacks Rank #1.
Sysco Corporation (SYY - Free Report) with an Earnings ESP of +1.70% and a Zacks Rank #2.
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Estee Lauder (EL) to Report Q1 Earnings: What's in Store?
Estée Lauder Companies Inc. (EL - Free Report) is set to report first-quarter fiscal 2017 results on Nov 2, before the opening bell. Last quarter, the company posted a positive earnings surprise of 7.5%. The company has surpassed the Zacks Consensus Estimate in all the previous four quarters with an average positive surprise of 14.99%.
Let’s see how things are shaping up prior to this announcement.
ESTEE LAUDER Price and EPS Surprise
ESTEE LAUDER Price and EPS Surprise | ESTEE LAUDER Quote
Factors to Consider
Estée Lauder has been posting better-than-expected earnings results over the past several quarters on the back of solid organic sales growth, product innovation, acquisitions and cost-saving measures. We expect these positives to have a favorable impact on the to-be-reported quarter as well. Last quarter, Estee Lauder launched Leading Beauty Forward, a multi-year initiative to increase efficiency, speed to market and agility. This is expected to affect top line in the to-be-reported quarter.
However, macroeconomic pressures have been hurting sales of Estée Lauder’s prestige beauty brands. Slow retail growth in China and soft sales in travel retail business are likely to affect sales in the to-be-reported quarter. Moreover, destocking in the Middle East and soft tourism in France are expected to impact top line negatively during first-quarter fiscal 2017.
Earnings Whispers
Our proven model does not conclusively show that Estée Lauder is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to post earnings beat. However, that is not the case here as you will see below:
Zacks ESP: Earnings ESP for Estée Lauder is -1.27% as the Most Accurate estimate is pegged at 78 cents and the Zacks Consensus Estimate stands higher at 79 cents.
Zacks Rank: Estée Lauder has a Zacks Rank #3. However, our criteria of earnings beat has been let down by an Earnings ESP of -1.27%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that investors may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Avon Products Inc. with an Earnings ESP of +33.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hormel Foods Corporation. (HRL - Free Report) with an Earnings ESP of +4.55% and a Zacks Rank #1.
Sysco Corporation (SYY - Free Report) with an Earnings ESP of +1.70% and a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>