We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's How Diageo (DEO) is Placed Just Ahead of FY22 Earnings
Read MoreHide Full Article
Diageo Plc (DEO - Free Report) is scheduled to release preliminary results for fiscal 2022 on Jul 28. The company has been benefiting from the recovery in the on-trade channel, strong consumer demand in the off-trade channel and market share gains. However, continued inflationary pressures and currency headwinds have been hurting the Zacks Rank #3 (Hold) company’s performance.
The alcoholic beverage company, which reports on a half-yearly basis, posted robust sales growth, operating margin expansion and productivity savings, which aided earnings in the first half of fiscal 2022. It recorded pre-exceptional earnings per share growth of 22.5% (in local currency) in the first half of fiscal 2022, with 15.8% sales growth.
Key Factors to Note
Strong consumer demand in the off-trade channel and recovery of the on-trade channel in key markets are likely to have aided Diageo’s top and bottom lines in fiscal 2022. Improved market share has been supported by favorable industry trends, with expanding market share of spirits and continued premiumization efforts. Driven by these and robust organic sales growth trends, Diageo is anticipated to have retained its strong performance in fiscal 2022. Organic sales in fiscal 2022 are expected to have benefited from robust growth across all regions, backed by effective marketing and exceptional commercial execution.
Strong recovery in the gross margin and operating cost leverage, along with higher marketing investments, are likely to have aided organic operating margin growth in fiscal 2022. Supply productivity savings and price increases, which have been offsetting higher cost inflation, are also expected to have boosted margins.
The company has also been gaining from consumer-led marketing and innovation. Its fiscal 2022 performance is expected to have benefited from efforts to leverage its existing e-commerce capabilities and accelerate investments in the online platform to cater to online demand.
On its last earnings call, the company expected organic sales momentum to continue in the second half of fiscal 2022. Although management anticipated near-term volatility to continue, it hinted at efficiently navigating through the supply-chain disruptions in fiscal 2022. The company also expected to gain from the resilience in off-trade and the continued recovery in the on-trade channel.
For fiscal 2022, DEO expected consumer demand to be resilient in North America, driving net sales growth. Continued innovation and effective marketing are also anticipated to have underpinned growth in North America. In Europe, the company is expected to have benefitted from the continued on-trade recovery and resilient off-trade channel. In the Asia Pacific, Africa, and Latin America and the Caribbean, it anticipated building on the momentum witnessed in the first half, with expectations of disruptions from COVID-19 to persist in these markets.
The company predicted organic operating profit to increase more than organic net sales in the second half of fiscal 2022. The operating margin is expected to have improved in the second half of fiscal 2022, driven by growth in sales volumes, positive channel mix and premiumization trends. It expected the focus on everyday efficiencies and revenue growth management to offset the impacts of the inflationary cost pressures. The interest expense rate is anticipated to be 2.7-3% for fiscal 2022.
However, Diageo has been witnessing inflationary pressures, driven by higher commodity costs, particularly agave, energy expenses and supply disruptions.
On its last earnings call, the company anticipated continued near-term volatility in some markets. The company expected to invest continually in marketing and commercial capabilities in fiscal 2022, particularly in North America and China. It expected the continued impacts of rising inflationary pressures to partly hurt margins.
The company also anticipated negative impacts of foreign exchange to hurt net sales and the operating profit in the second half of fiscal 2022. Nonetheless, it expected the adverse currency impacts to be significantly lower than that witnessed in the first half of fiscal 2022.
Looking for Lucrative Picks? Check These
Here are some companies you may want to consider this earnings season.
Lamb Weston (LW - Free Report) has an Earnings ESP of +0.99% and currently sports a Zacks Rank of 1 (Strong Buy). The company is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2022 earnings. The consensus mark for LW’s quarterly revenues is pegged at $1.07 billion, which suggests 6.03% growth from the figure reported in the prior-year quarter.
The consensus mark for Lamb Weston’s quarterly earnings has moved up by a penny in the past 30 days to 51 cents per share. The consensus estimate for LW’s fiscal fourth-quarter earnings suggests growth of 15.9% from the year-ago quarter’s reported figure.
Archer Daniels Midland (ADM - Free Report) currently has an Earnings ESP of +1.56% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports second-quarter 2022 numbers. The consensus mark for ADM’s quarterly earnings has moved up 3.6% in the past 30 days to $1.75 per share. The consensus estimate suggests growth of 31.6% from the year-ago quarter’s reported number.
Archer Daniels’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $25.3 billion, which suggests a rise of 10.2% from the figure reported in the prior-year quarter.
Chipotle Mexican Grill (CMG - Free Report) currently has an Earnings ESP of +0.51% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports second-quarter 2022 results. The consensus mark for CMG’s quarterly revenues is pegged at $2.24 billion, which suggests a rise of 18.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Chipotle’s second-quarter earnings has moved down 0.2% to $9.02 per share in the past 30 days. The consensus estimate for CMG indicates 20.9% growth from $7.46 reported in the year-ago quarter.
Image: Bigstock
Here's How Diageo (DEO) is Placed Just Ahead of FY22 Earnings
Diageo Plc (DEO - Free Report) is scheduled to release preliminary results for fiscal 2022 on Jul 28. The company has been benefiting from the recovery in the on-trade channel, strong consumer demand in the off-trade channel and market share gains. However, continued inflationary pressures and currency headwinds have been hurting the Zacks Rank #3 (Hold) company’s performance.
The alcoholic beverage company, which reports on a half-yearly basis, posted robust sales growth, operating margin expansion and productivity savings, which aided earnings in the first half of fiscal 2022. It recorded pre-exceptional earnings per share growth of 22.5% (in local currency) in the first half of fiscal 2022, with 15.8% sales growth.
Key Factors to Note
Strong consumer demand in the off-trade channel and recovery of the on-trade channel in key markets are likely to have aided Diageo’s top and bottom lines in fiscal 2022. Improved market share has been supported by favorable industry trends, with expanding market share of spirits and continued premiumization efforts. Driven by these and robust organic sales growth trends, Diageo is anticipated to have retained its strong performance in fiscal 2022. Organic sales in fiscal 2022 are expected to have benefited from robust growth across all regions, backed by effective marketing and exceptional commercial execution.
Strong recovery in the gross margin and operating cost leverage, along with higher marketing investments, are likely to have aided organic operating margin growth in fiscal 2022. Supply productivity savings and price increases, which have been offsetting higher cost inflation, are also expected to have boosted margins.
The company has also been gaining from consumer-led marketing and innovation. Its fiscal 2022 performance is expected to have benefited from efforts to leverage its existing e-commerce capabilities and accelerate investments in the online platform to cater to online demand.
On its last earnings call, the company expected organic sales momentum to continue in the second half of fiscal 2022. Although management anticipated near-term volatility to continue, it hinted at efficiently navigating through the supply-chain disruptions in fiscal 2022. The company also expected to gain from the resilience in off-trade and the continued recovery in the on-trade channel.
For fiscal 2022, DEO expected consumer demand to be resilient in North America, driving net sales growth. Continued innovation and effective marketing are also anticipated to have underpinned growth in North America. In Europe, the company is expected to have benefitted from the continued on-trade recovery and resilient off-trade channel. In the Asia Pacific, Africa, and Latin America and the Caribbean, it anticipated building on the momentum witnessed in the first half, with expectations of disruptions from COVID-19 to persist in these markets.
The company predicted organic operating profit to increase more than organic net sales in the second half of fiscal 2022. The operating margin is expected to have improved in the second half of fiscal 2022, driven by growth in sales volumes, positive channel mix and premiumization trends. It expected the focus on everyday efficiencies and revenue growth management to offset the impacts of the inflationary cost pressures. The interest expense rate is anticipated to be 2.7-3% for fiscal 2022.
However, Diageo has been witnessing inflationary pressures, driven by higher commodity costs, particularly agave, energy expenses and supply disruptions.
On its last earnings call, the company anticipated continued near-term volatility in some markets. The company expected to invest continually in marketing and commercial capabilities in fiscal 2022, particularly in North America and China. It expected the continued impacts of rising inflationary pressures to partly hurt margins.
The company also anticipated negative impacts of foreign exchange to hurt net sales and the operating profit in the second half of fiscal 2022. Nonetheless, it expected the adverse currency impacts to be significantly lower than that witnessed in the first half of fiscal 2022.
Looking for Lucrative Picks? Check These
Here are some companies you may want to consider this earnings season.
Lamb Weston (LW - Free Report) has an Earnings ESP of +0.99% and currently sports a Zacks Rank of 1 (Strong Buy). The company is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2022 earnings. The consensus mark for LW’s quarterly revenues is pegged at $1.07 billion, which suggests 6.03% growth from the figure reported in the prior-year quarter.
The consensus mark for Lamb Weston’s quarterly earnings has moved up by a penny in the past 30 days to 51 cents per share. The consensus estimate for LW’s fiscal fourth-quarter earnings suggests growth of 15.9% from the year-ago quarter’s reported figure.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Archer Daniels Midland (ADM - Free Report) currently has an Earnings ESP of +1.56% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports second-quarter 2022 numbers. The consensus mark for ADM’s quarterly earnings has moved up 3.6% in the past 30 days to $1.75 per share. The consensus estimate suggests growth of 31.6% from the year-ago quarter’s reported number.
Archer Daniels’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $25.3 billion, which suggests a rise of 10.2% from the figure reported in the prior-year quarter.
Chipotle Mexican Grill (CMG - Free Report) currently has an Earnings ESP of +0.51% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports second-quarter 2022 results. The consensus mark for CMG’s quarterly revenues is pegged at $2.24 billion, which suggests a rise of 18.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Chipotle’s second-quarter earnings has moved down 0.2% to $9.02 per share in the past 30 days. The consensus estimate for CMG indicates 20.9% growth from $7.46 reported in the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.