Back to top

Image: Bigstock

What's in Store for Prestige Consumer (PBH) in Q4 Earnings?

Read MoreHide Full Article

Prestige Consumer Healthcare Inc. (PBH - Free Report) is likely to witness year-over-year growth in its top and bottom lines when it reports fourth-quarter fiscal 2022 earnings on May 5. The Zacks Consensus Estimate for revenues is pegged at $258.2 million, suggesting a rise of 8.6% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for earnings has remained unchanged over the past 30 days at 89 cents per share. This indicates an increase of 12.7% from the figure reported in the prior-year period. The company delivered an earnings surprise of around 11.7% in the last reported quarter.

Key Factors to Consider

Prestige Consumer has been on track to transform its business and focus solely on healthcare.  In this regard, the company recently acquired TheraTears and four other over-the-counter consumer brands across the VMS and Cough & Cold categories from Akorn Operating Company LLC. This buyout, concluded in July 2021, contributed to Prestige Consumer’s third-quarter results. Management earlier said that it expects the Akorn acquisition to contribute $40 million to the top line in fiscal 2022.

The company has been making multi-year e-commerce investments for a while now, which continued to yield results in the third quarter of fiscal 2022. PBH continued to see double-digit consumption growth in e-commerce sales during the quarter. The upside can be attributed to consumers’ growing shift to online shopping and the company’s constant investments in online content and digital marketing. With more consumers shifting to the online mode of shopping, the e-commerce channel is likely to remain strong and Prestige Consumer’s investments in this arena are likely to keep the company well-placed.

Driven by impressive quarterly results and anticipation of the continued recovery of certain pandemic-impacted categories like cough & cold (as seen in the third quarter), management raised its fiscal 2022 view on the last earnings call. This bodes well for the quarter under review as well. For fiscal 2022, the company anticipates revenues in the range of $1,075-$1,080 million. Organic growth is projected at 9% now. Finally, management envisions adjusted earnings per share (EPS) in the band of $4-$4.04.

However, Prestige Consumer is encountering hurdles related to supply-chain restrictions and cost inflation. For fiscal 2022, management expects a gross margin of about 57%, which reflects supply-chain hurdles and cost-related challenges. That said, the company is focused on undertaking price increases to combat inflation.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Prestige Consumer this time. 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, which is not the case here.

Prestige Consumer currently has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Hostess Brands (TWNK - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports first-quarter 2022 results. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Hostess Brands’ bottom line stands at 23 cents per share, which suggests a rise of 15% from the year-ago period’s reported figure. TWNK has a trailing four-quarter earnings surprise of roughly 6%, on average.

Celsius Holdings (CELH - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. It is anticipated to register a top and bottom-line increase when it reports first-quarter 2022 results. The Zacks Consensus Estimate for Celsius Holdings’ revenues is pegged at $117.6 million, indicating growth of 135.1% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Celsius Holdings’ quarterly earnings is pegged at 3 cents per share, suggesting a rise of 200% from the year-ago quarter’s reported figure. CELH delivered an earnings beat of 156.3%, on average, in the trailing four quarters.

Hormel Foods (HRL - Free Report) has an Earnings ESP of +1.29% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2022 results. The consensus mark for Hormel Foods’ revenues is pegged at nearly $3 billion, indicating an increase of 15.1% from the year-ago quarter.

The Zacks Consensus Estimate for Hormel Foods’ quarterly EPS of 46 cents suggests a rise of 9.5% from the year-ago quarter’s reported figure. HRL has a trailing four-quarter earnings surprise of 1.7%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.