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Things to Note Ahead of Spectrum Brands' (SPB) Q4 Earnings

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Spectrum Brands Holdings, Inc. (SPB - Free Report) is slated to report fourth-quarter fiscal 2021 results on Nov 12, before the opening bell.

The global consumer products company is likely to have witnessed revenue and earnings declines in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at 48 cents per share, which indicates a decline of 72.1% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days.

The consensus mark for revenues is pegged at $726.5 million, indicating a decline of 37.9% from the figure reported in the year-ago quarter.

In the last reported quarter, the company delivered a negative earnings surprise of 1.3%. However, it delivered an earnings surprise of 72.4%, on average, in the trailing four quarters.

Spectrum Brands Holdings Inc. Price and EPS Surprise

 

Spectrum Brands Holdings Inc. Price and EPS Surprise

Spectrum Brands Holdings Inc. price-eps-surprise | Spectrum Brands Holdings Inc. Quote

Factors to Note

Spectrum Brands has been witnessing a soft gross margin, owing to elevated freight and raw-material costs. Inflationary pressure, driven by elevated transportation and commodity costs, is expected to have continued to weigh on the company’s performance in the to-be-reported quarter.

On the last reported quarter’s earnings call, management anticipated the higher transportation and commodity cost trends to continue throughout fiscal 2021. Consequently, the company is expected to have witnessed gross margin pressures in the fiscal fourth quarter.

It is also likely to have experienced SG&A deleverage, driven by increased volumes, a rise in advertising and marketing costs, and elevated incentive and distribution expenses. This is expected to have weighed on the company’s bottom line in the to-be-reported quarter.

Spectrum Brands’ Home & Garden segment is expected to have been impacted by reduced herbicides and insecticides sales. Lower volumes and increased marketing investments are also likely to have marred the segment’s EBITDA margins.

However, the company has been benefiting from favorable volumes and productivity as well as a solid segmental performance. Continued strength in the global pet care category has been a growth driver. The pet segment is expected to have witnessed steady growth in the fiscal fourth quarter, backed by its pipeline of robust innovation and growth strategy. It has also been on track with its Global Productivity Improvement Plan, which is likely to have boosted the top and bottom-line performances in the fiscal fourth quarter.

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 #5 and an Earnings ESP of 0.00%.

Stocks Poised to Beat Earnings Estimates

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.

PVH Corp (PVH - Free Report) has an Earnings ESP of +4.84% and it sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Central Garden & Pet Company (CENT - Free Report) currently has an Earnings ESP of +22.22% and a Zacks Rank #2.

YETI Holdings, Inc. (YETI - Free Report) currently has an Earnings ESP of +5.11% and a Zacks Rank #3.