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What to Expect from Helen of Troy (HELE) in Q1 Earnings?

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Helen of Troy Limited (HELE - Free Report) is slated to report first-quarter fiscal 2018 results on Jul 10, before the opening bell. Notably, the company’s earnings have outpaced the Zacks Consensus Estimate for seven straight quarters now, with a trailing four-quarter average beat of 18.7%. Let’s delve deeper to know what’s in store for this earnings season.

What Does the Zacks Model Unveil?

Our proven model proves that Helen of Troy is unlikely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen.

Helen of Troy Limited Price, Consensus and EPS Surprise

Helen of Troy Limited Price, Consensus and EPS Surprise | Helen of Troy Limited Quote

Helen of Troy has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.13. Although the company’s Zacks Rank #3 increases the predictive power of ESP, its Earnings ESP of 0.00% makes surprise prediction difficult. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Estimates Trend

Let’s look at the company’s earnings estimate revisions in order to get a clear picture of what analysts are thinking about Helen of Troy, right before earnings release. The Zacks Consensus Estimate that is pegged at $1.13 for the first quarter of fiscal 2018 has been stable in the last 30 days. Moreover, the estimate for the impending quarter remains flat with the prior-year quarter’s earnings.

Furthermore, analysts polled by Zacks expect revenues of $354.0 million and $1.58 billion, representing a year-over-year growth of 1.7% and 2.7%, respectively, for the first quarter and fiscal 2018.  

Factors at Play

We note that Helen of Troy is witnessing a soft retail landscape including sluggish brick-and-mortar business. Further, the company is facing intense competition in the personal care category, and is also being impacted by changing consumer preferences. Evidently, these factors are weighing upon the company’s top line that lagged the consensus mark in three of the last four quarters. Moreover, its sales have witnessed a year-over-year decline of 0.3%, 0.2% and 2.3% in the second, third and fourth quarters of fiscal 2017, respectively. In addition, management is witnessing sluggishness in its Nutritional Supplements and Beauty segments.

These factors have been weighing upon the company’s stock performance that declined 3.7% in the last one month against the Zacks categorized Cosmetics & Toiletries industry that gained 0.3%. Currently, the industry is placed at top 23% (60 out of 256) of the Zacks Classified industries.


 
Nevertheless, we remain encouraged by the company’s solid brand portfolio and its transformation strategy that remains on track. In fact, its leadership brands like Braun, PUR Honeywell air purifiers, OXO, Vicks, Hydro Flask and Hot Tools are gaining traction in various markets. Also, Helen of Troy is exploring new opportunities for additional investments in product enhancement, expanding its footprint, digital marketing as well as e-commerce growth.

Now, it is to be seen whether the company will be able to maintain its positive earnings streak in the to-be-reported quarter.

Stocks Poised to Beat Earnings Estimates

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:

The Clorox Company (CLX - Free Report) has an Earnings ESP of +0.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cott Corporation has an Earnings ESP of +6.25% and a Zacks Rank #3.

Tyson Foods, Inc. (TSN - Free Report) has an Earnings ESP of +1.64% and a Zacks Rank #3.

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