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Things to Note Ahead of Spectrum Brands' (SPB) Q2 Earnings

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Spectrum Brands Holdings, Inc. (SPB - Free Report) is slated to report second-quarter fiscal 2021 results on May 7, before the opening bell. This global consumer products company is likely to have witnessed revenue and earnings growth in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal second-quarter earnings remained stable at 96 cents in the past 30 days. Moreover, this suggests a rise of 5.5% from the year-ago quarter’s reported figure. Further, the consensus mark for revenues is pegged at $1,030 million, indicating growth of 9.9% from the figure reported in the year-ago quarter.

In the last reported quarter, the company delivered an earnings surprise of 163%. Moreover, it delivered an earnings surprise of 106.2%, on average, in the trailing four quarters.

Factors to Note

Spectrum Brands has been benefiting from solid demand for its products, which is driving growth in all business categories. Also, enhanced brand awareness, investments in advertising and marketing, and supply-chain recovery remain key upsides. Further, the company’s Global Productivity Improvement Plan, which aims at improving its operating efficiency and effectiveness, bodes well. This plan is likely to have contributed to the fiscal second-quarter results.

In sync with its Global Productivity Improvement Plan, the company’s Global Pet Care business remains on track with exiting non-core assets and activities to focus on core brands. Also, its newly acquired Omega Sea and Armitage Pet Care brands are expected to have favored this segment’s growth in the quarter under review. Moreover, the segment has been gaining from growth in aquatic and companion animal categories, solid online sales and a spike in demand for aquatic and reptile kits and equipment. In fact, the Zacks Consensus Estimate for sales in this unit is pegged at $267 million, which implies an increase of 12.7% year over year.

However, management continues to grapple with rising costs stemming from increased investments in advertising and marketing. Also, the pandemic-led demand and supply-related disruptions along with gross tariff headwinds remain significant concerns.

Spectrum Brands Holdings Inc. Price and EPS Surprise

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Spectrum Brands 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Spectrum Brands has a Zacks Rank #3 but an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

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 this reporting cycle:

Fox Corporation (FOXA - Free Report) presently has an Earnings ESP of +13.40% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Gildan Activewear (GIL - Free Report) currently has an Earnings ESP of +7.69% and a Zacks Rank #2.

Funko (FNKO - Free Report) currently has an Earnings ESP of +9.70% and a Zacks Rank #2.

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