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Things Worth Noting Before Helen of Troy's (HELE) Q1 Earnings

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Helen of Troy Limited (HELE - Free Report) is likely to register top and bottom-line growth, when it reports first-quarter fiscal 2022 numbers on Jul 8. The Zacks Consensus Estimate for revenues is pegged at $443 million, suggesting an increase of 5.4% from the prior-year quarter’s reported figure. In the last reported quarter, the company witnessed a 15.1% increase in revenues.

The Zacks Consensus Estimate for earnings has remained stable over the past 30 days at $2.61 per share, which suggests growth of 3.2% from the figure reported in the prior-year period. The company has a trailing four-quarter earnings surprise of 35.1%, on average. In the last reported quarter, Helen of Troy posted an earnings surprise of 0.6%.

Key Factors to Note

Helen of Troy has been benefiting from its strong online operations and digital marketing endeavors. In fact, the company has been making major investments in key areas to continue driving growth. To this end, the company is focused on investing in consumer-centric innovation, digital marketing and media, new packaging, enhanced production and distribution capacity as well as direct-to-consumer channels, among others. Notably, management is on track to continue investing in key growth areas as part of its Phase II Transformation efforts.

Markedly, the company has been gaining on its solid focus on Leadership Brands, which is a portfolio of market-leading brands. These brands account for a significant chunk of the company’s sales, which generate solid margins and volumes. Notably, Leadership Brands contributed more than 81% to the company’s sales in fiscal 2021. The company’s constant investments in these brands that are considered most productive have been delivering robust results. On its last earnings call, management stated that it expects Leadership Brands to continue catering well to customers in fiscal 2022.

That said, marketing and new product development costs pose threats to margins. Also, elevated freight costs are a concern.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Helen of Troy 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Helen of Troy currently has a Zacks Rank #3 and 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 season.

PepsiCo (PEP - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Philip Morris (PM - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank of 3.

The Hershey Company (HSY - Free Report) has an Earnings ESP of +3.97% and a Zacks Rank #3.

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