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Analyst Blog

The Q3 earnings season is nearing its end with results already out for 423 S&P 500 members. The results announced so far display significant improvement from the preceding quarters. The quarter reported notable growth after five quarters of back-to-back decline. According to the latest Earnings Preview, of the 84.6% S&P 500 members that have reported Q3 results so far, 72.8% have posted positive earnings surprises and 55.1% have come ahead of top-line expectations.

The Consumer sector comprising consumer staples and consumer discretionary sector is showing positive signs this quarter. While total earnings for consumer staples are expected to grow 6.5%, that for consumer discretionary are expected to go up 6.2%. As of Nov 4, 78.1% of the total number of S&P 500 companies in the consumer staples sector that have reported their results, 76% beat earnings and 36% of the companies surpassed revenue estimates.

In the consumer discretionary sector, 74.3% of the total number of S&P 500 companies that have reported their results, 73.1% beat earnings and 50% of companies’ surpassed revenue estimates. Efficient pricing, solid cost reduction initiatives, lucrative acquisitions and efforts to enhance product portfolio cushion these companies from macroeconomic hurdles, consequently driving their bottom lines.

Consumer stocks are particularly doing well in the third quarter. Leading firms from the industry like The Hershey’s Company (HSY - Free Report) , Pinnacle Foods, Inc. (PF - Free Report) , B&G Foods, Inc. (BGS - Free Report) and Kellogg Co. (K - Free Report) have delivered better-than-expected Q3 earnings results despite currency headwinds and the sluggishness in emerging markets.

Let’s take a look at what’s in store for three consumer stocks which are scheduled to release their quarterly numbers on Nov 10.

We start with Blue Buffalo Pet Products Inc. (BUFF - Free Report) which is scheduled to report third-quarter 2016 results after the closing bell. The company has an Earnings ESP of 0.00% and carries a Zacks Rank #2 (Buy). Meanwhile, the Zacks Consensus Estimate for third-quarter earnings is pegged at 20 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

However, we need to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 or #3 (Hold) to be confident about a positive surprise. So, though a Zacks Rank #2 increases the predictive power, an Earnings ESP of 0.00% makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

BLUE BUFFALO Price and EPS Surprise

 

Additionally, the company posted positive surprises in all the trailing four quarters with an average positive surprise of 13.26%.

Edgewell Personnel Care Company (EPC - Free Report) is slated to report fourth-quarter 2016 numbers before the market opens. The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 96 cents. Additionally, the company posted positive surprises in all the trailing four quarters with an average negative surprise of 4.54%.

EDGEWELL PERSNL Price and EPS Surprise

 

EDGEWELL PERSNL Price and EPS Surprise | EDGEWELL PERSNL Quote

We are not sure about an earnings beat for this stock during the quarter as it has an unfavorable combination of an Earnings ESP of 0.00% and carries a Zacks Rank #3.

Lastly we consider e.l.f. Beauty, Inc. (ELF - Free Report) which is slated to report third-quarter 2016 numbers after market close. The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 1 cent.

E.L.F. BEAUTY Price and EPS Surprise

 

E.L.F. BEAUTY Price and EPS Surprise | E.L.F. BEAUTY Quote

We are not sure about an earnings beat for this stock during the quarter as it has an unfavorable combination of an Earnings ESP of 0.00% and a Zacks Rank #3.

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