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Mohawk (MHK) Q2 Earnings to Rise on Solid Demand, R&R Activity
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Mohawk Industries, Inc. (MHK - Free Report) is scheduled to report second-quarter 2021 results on Jul 29, after market close.
In the last reported quarter, the company’s adjusted earnings and net sales topped the Zacks Consensus Estimate by 24.6% and 2.6%, respectively. Also, on a year-over-year basis, the metrics improved 110.2% and 16.8%, respectively.
Trend in Estimate Revision
The Zacks Consensus Estimate for Mohawk’s second-quarter earnings is pegged at $3.71 per share, indicating a 902.7% increase from the prior-year reported figure of 37 cents. The consensus estimate for net sales is pegged at $2.77 billion, suggesting a 35% increase from the year-ago reported figure.
Mohawk Industries, Inc. Price, Consensus and EPS Surprise
The company is expected to have registered improved sales and strong order backlog across the enterprise during the second quarter owing to robust demand trends. Continued government stimulus, low interest rates, new home construction and robust residential remodeling are likely to have benefited its performance in to-be-reported quarter.
Owing to higher market demand and increased sales in residential remodeling and new construction markets, Mohawk's U.S. ceramic business has been witnessing improved customer traffic. The company expects expansion of ceramic capacities in the second quarter and beyond.
The Global Ceramic unit was backed by strong growth in the residential channel from heightened remodeling and home sales. The consensus mark for revenues from the Global Ceramic unit is pegged at $969 million, implying a 28.7% year-over-year increase.
The Flooring NA business has also been seeing strong growth in the residential channel. Its commercial channel has been recovering and seeing more investments in new projects. The consensus estimate for the Flooring NA segment’s net sales is pegged at $1,023 million, indicating an improvement of 27.9% from the year-ago reported figure.
Within Flooring ROW, the company has been witnessing strong demand in most categories and geographies. Especially, the insulation business has been experiencing strong demand backed by government incentives for energy savings. The consensus mark for revenues from Flooring ROW is pegged at $716 million, suggesting a 44.4% improvement from the year-ago quarter.
However, Mohawk has been witnessing inflation in most of the product categories and hence, raising prices. Also, it has been experiencing a rise in material, labor and transportation costs. Nonetheless, selective price increase and cost-saving initiatives might have offset the increased cost to some extent.
Coming to bottom-line projections, the consensus mark for adjusted operating income from Global Ceramic is $114 million, indicating significant growth from just $3.86 million reported a year ago. The same for Flooring NA units is pegged at $104 million, suggesting notable growth from negative $17.26 million in the prior year. The consensus estimate for Flooring ROW business’ operating income is $133 million, which suggests solid improvement from negative $17.26.
During the first-quarter earnings call, management stated that it expects second-quarter adjusted earnings (excluding restructuring charges) in the range of $3.57-$3.67 per share, indicating a significant improvement from the year-ago reported figure of 37 cents.
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. 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.
Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +54.29% and sports a Zacks Rank #1.
Golden Entertainment, Inc. (GDEN - Free Report) has an Earnings ESP of +5.22% and a Zacks Rank #1.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +35.52% and a Zacks Rank #1.
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Mohawk (MHK) Q2 Earnings to Rise on Solid Demand, R&R Activity
Mohawk Industries, Inc. (MHK - Free Report) is scheduled to report second-quarter 2021 results on Jul 29, after market close.
In the last reported quarter, the company’s adjusted earnings and net sales topped the Zacks Consensus Estimate by 24.6% and 2.6%, respectively. Also, on a year-over-year basis, the metrics improved 110.2% and 16.8%, respectively.
Trend in Estimate Revision
The Zacks Consensus Estimate for Mohawk’s second-quarter earnings is pegged at $3.71 per share, indicating a 902.7% increase from the prior-year reported figure of 37 cents. The consensus estimate for net sales is pegged at $2.77 billion, suggesting a 35% increase from the year-ago reported figure.
Mohawk Industries, Inc. Price, Consensus and EPS Surprise
Mohawk Industries, Inc. price-consensus-eps-surprise-chart | Mohawk Industries, Inc. Quote
Factors to Note
The company is expected to have registered improved sales and strong order backlog across the enterprise during the second quarter owing to robust demand trends. Continued government stimulus, low interest rates, new home construction and robust residential remodeling are likely to have benefited its performance in to-be-reported quarter.
Owing to higher market demand and increased sales in residential remodeling and new construction markets, Mohawk's U.S. ceramic business has been witnessing improved customer traffic. The company expects expansion of ceramic capacities in the second quarter and beyond.
The Global Ceramic unit was backed by strong growth in the residential channel from heightened remodeling and home sales. The consensus mark for revenues from the Global Ceramic unit is pegged at $969 million, implying a 28.7% year-over-year increase.
The Flooring NA business has also been seeing strong growth in the residential channel. Its commercial channel has been recovering and seeing more investments in new projects. The consensus estimate for the Flooring NA segment’s net sales is pegged at $1,023 million, indicating an improvement of 27.9% from the year-ago reported figure.
Within Flooring ROW, the company has been witnessing strong demand in most categories and geographies. Especially, the insulation business has been experiencing strong demand backed by government incentives for energy savings. The consensus mark for revenues from Flooring ROW is pegged at $716 million, suggesting a 44.4% improvement from the year-ago quarter.
However, Mohawk has been witnessing inflation in most of the product categories and hence, raising prices. Also, it has been experiencing a rise in material, labor and transportation costs. Nonetheless, selective price increase and cost-saving initiatives might have offset the increased cost to some extent.
Coming to bottom-line projections, the consensus mark for adjusted operating income from Global Ceramic is $114 million, indicating significant growth from just $3.86 million reported a year ago. The same for Flooring NA units is pegged at $104 million, suggesting notable growth from negative $17.26 million in the prior year. The consensus estimate for Flooring ROW business’ operating income is $133 million, which suggests solid improvement from negative $17.26.
During the first-quarter earnings call, management stated that it expects second-quarter adjusted earnings (excluding restructuring charges) in the range of $3.57-$3.67 per share, indicating a significant improvement from the year-ago reported figure of 37 cents.
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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, it has a Zacks Rank #2 and an Earnings ESP of +9.11%. 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.
Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +54.29% and sports a Zacks Rank #1.
Golden Entertainment, Inc. (GDEN - Free Report) has an Earnings ESP of +5.22% and a Zacks Rank #1.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +35.52% and a Zacks Rank #1.