Majority of companies in the Consumer Discretionary sector have been able to stay afloat despite the pandemic. Inclination toward business modifications and digital initiatives has been a tailwind for these companies.
The sector witnessed a slowdown in momentum during fourth-quarter 2020, due to resurgence of Covid-19 cases. Consequently, many states witnessed partial lockdowns and restricted economic activities. Given that the sector provides non-essential offerings and is highly sensitive toward business cycles, majority of the purchases were postponed that dented growth in the sector. However, some positive developments were witnessed in the previous quarter, which indicate toward a revival. The U.S. government ramped up nationwide COVID-19 vaccination on a priority basis, thereby implying faster-than-expected reopening of the U.S. economy. Also, a fresh round of stimulus was infused into the economy to support the pandemic impacted people and businesses. In March 2021, Joe Biden signed in a massive $1.9 trillion coronavirus relief package. Per the latest Earnings Outlook, total earnings of the Zacks Consumer Discretionary sector are expected to be down 40.9% year over year. In fourth-quarter 2020, the sector’s earnings fell 61.4% year over year. Meanwhile, revenues for the sector are expected to decline 5.3% year over year. In the previous quarter, the sector’s revenues fell 13.2% year over year. Sneak Peek into Upcoming Earnings Releases
Let’s focus on a few Consumer Discretionary companies that are scheduled to release first-quarter 2021 earnings on Apr 22.
According to the Zacks model, 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 to buy or sell before they’re reported with our Earnings ESP Filter. Mattel, Inc. ( MAT Quick Quote MAT - Free Report) is scheduled to report results after the closing bell.
The company’s first-quarter performance might have benefited from robust performance of Power Brands Barbie, Fisher-Price and Thomas & Friends Brand and Hot Wheels. The company has also been gaining from sales growth in North America, digital efforts and increased focus on structural simplification.
Moreover, robust performance of Dolls (including Barbie), Infant, Toddler, and Preschool (including Fisher-Price and Thomas & Friends), Action Figures, Building Sets, Games as well as Other might have aided the company’s sales in North America. The Zacks Consensus Estimate for North America revenues stands at $360 million, suggesting growth of 17.6% year over year. (Read more: Robust North America Sales to Aid Mattel's Q1 Earnings) The company has a Zacks Rank #1 and an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here. Snap-on Incorporated ( SNA Quick Quote SNA - Free Report) is scheduled to report results before the opening bell. The company is likely to have witnessed revenue and earnings growth in the to-be-reported quarter.
Snap-on has been gaining from its Value Creation model, which focuses on enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding critical industries in emerging markets. Moreover, the company’s Rapid Continuous Improvement (RCI) process, designed to enhance organizational effectiveness, generate savings and minimize costs, has been aiding margins. Encouragingly, management has been making efforts to boost customer services along with enhancing manufacturing and supply-chain capabilities through RCI initiatives and further investments. Gains from these endeavors are likely to be reflected in the company’s first-quarter performance. (Read more:
Snap-on to Report Q1 Earnings: What's in the Cards?) The company has a Zacks Rank #2 and an Earnings ESP of +5.00%. Pool Corporation ( POOL Quick Quote POOL - Free Report) is scheduled to report results before the opening bell.
Pool Corp’s first-quarter top line is likely to have been driven by solid backlogs, new pool construction activities, capacity-creation initiatives, elevated demand for pool supplies and maintenance products. Notably, the company is likely to have benefitted from COVID trends stemming from work-from-home, school-from-home, lack of vacation travel and the de-urbanization trends. Also, contributions from its acquired Master Tile, Northeastern Swimming Pool Distributors, Jet Line Products and TWC Distributors businesses are likely to have boosted revenues in the to-be-reported quarter. (Read more:
Factors Setting the Tone for Pool Corp Q1 Earnings) The company has a Zacks Rank #2 and an Earnings ESP of +0.00%. Zacks Top 10 Stocks for 2021
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