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Will Soft Sales Volume Impact Mohawk (MHK) Q2 Earnings?
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Mohawk Industries, Inc. (MHK - Free Report) is scheduled to report second-quarter 2020 results on Jul 30, after market close.
In the last reported quarter, the company’s adjusted earnings and net sales lagged the Zacks Consensus Estimate by 0.6% and 1.1%, respectively. Also, on a year-over-year basis, the metrics declined 22.1% and 6.4%, respectively, due to softness in retail demand, reduced production volume and unplanned shutdown costs.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s loss has narrowed to 8 cents per share from 15 cents over the past seven days. The year-ago earnings was recorded at $2.89 per share. The consensus mark for revenues is $1.9 billion, suggesting 26.5% year-over-year growth.
Mohawk has been witnessing a tough business environment, given soft demand, greater competition and reduced production volume. It took several initiatives to boost sales and reduce costs despite the above-mentioned headwinds.
Moreover, owing to the pandemic, demand dropped drastically across all the markets served by the company, with residential remodeling being impacted the most. DIY products have been performing relatively well, as some people have started projects while staying at home. Hence, given uncertainty surrounding the COVID-19 pandemic, management did not provide its second-quarter EPS guidance but revealed that it is anticipating an operating loss for the quarter.
Lower volume, unfavorable price and mix, as well as unplanned shutdown costs are likely to have hurt the company’s Global Ceramic segment. The consensus mark for revenues from the Global Ceramic unit is pegged at $697 million, implying a 27.2% year-over-year decrease and 17.8% drop from first-quarter 2020.
Meanwhile, lower volume, price, mix and the COVID-19 outbreak are expected to have weighed on the company’s Flooring North America or NA business in the second quarter. The consensus estimate for the Flooring NA segment’s net sales is pegged at $713 million, indicating a decline of 27.5% from the year-ago figure and 15.9% sequentially.
The consensus mark for revenues from Flooring ROW is pegged at $426 million, suggesting a 22.7% decrease from the year-ago quarter and 27.7% decline sequentially.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Mohawk 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.
Earnings ESP: Mohawk has an Earnings ESP of +217.02%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies in the Zacks Consumer Discretionary sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Penn National Gaming, Inc. (PENN - Free Report) has an Earnings ESP of +3.13% and holds a Zacks Rank #3.
Wynn Resorts, Limited (WYNN - Free Report) has an Earnings ESP of +2.64% and a Zacks Rank of 3.
International Game Technology PLC (IGT - Free Report) has an Earnings ESP of +19.07% and a Zacks Rank #2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Will Soft Sales Volume Impact Mohawk (MHK) Q2 Earnings?
Mohawk Industries, Inc. (MHK - Free Report) is scheduled to report second-quarter 2020 results on Jul 30, after market close.
In the last reported quarter, the company’s adjusted earnings and net sales lagged the Zacks Consensus Estimate by 0.6% and 1.1%, respectively. Also, on a year-over-year basis, the metrics declined 22.1% and 6.4%, respectively, due to softness in retail demand, reduced production volume and unplanned shutdown costs.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s loss has narrowed to 8 cents per share from 15 cents over the past seven days. The year-ago earnings was recorded at $2.89 per share. The consensus mark for revenues is $1.9 billion, suggesting 26.5% year-over-year growth.
Mohawk Industries, Inc. Price and EPS Surprise
Mohawk Industries, Inc. price-eps-surprise | Mohawk Industries, Inc. Quote
Factors to Note
Mohawk has been witnessing a tough business environment, given soft demand, greater competition and reduced production volume. It took several initiatives to boost sales and reduce costs despite the above-mentioned headwinds.
Moreover, owing to the pandemic, demand dropped drastically across all the markets served by the company, with residential remodeling being impacted the most. DIY products have been performing relatively well, as some people have started projects while staying at home. Hence, given uncertainty surrounding the COVID-19 pandemic, management did not provide its second-quarter EPS guidance but revealed that it is anticipating an operating loss for the quarter.
Lower volume, unfavorable price and mix, as well as unplanned shutdown costs are likely to have hurt the company’s Global Ceramic segment. The consensus mark for revenues from the Global Ceramic unit is pegged at $697 million, implying a 27.2% year-over-year decrease and 17.8% drop from first-quarter 2020.
Meanwhile, lower volume, price, mix and the COVID-19 outbreak are expected to have weighed on the company’s Flooring North America or NA business in the second quarter. The consensus estimate for the Flooring NA segment’s net sales is pegged at $713 million, indicating a decline of 27.5% from the year-ago figure and 15.9% sequentially.
The consensus mark for revenues from Flooring ROW is pegged at $426 million, suggesting a 22.7% decrease from the year-ago quarter and 27.7% decline sequentially.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Mohawk 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.
Earnings ESP: Mohawk has an Earnings ESP of +217.02%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Worth a Look
Here are some other companies in the Zacks Consumer Discretionary sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Penn National Gaming, Inc. (PENN - Free Report) has an Earnings ESP of +3.13% and holds a Zacks Rank #3.
Wynn Resorts, Limited (WYNN - Free Report) has an Earnings ESP of +2.64% and a Zacks Rank of 3.
International Game Technology PLC (IGT - Free Report) has an Earnings ESP of +19.07% and a Zacks Rank #2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>