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Factors Shaping the Fate of Estee Lauder's (EL) Q3 Earnings
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The Estee Lauder Companies Inc. (EL - Free Report) is scheduled to release third-quarter fiscal 2020 results on May 1. The cosmetics giant delivered a positive earnings surprise of 10.5% in the last reported quarter. Its earnings outperformed the Zacks Consensus Estimate by 13.7%, on average, in the trailing four quarters.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 72 cents per share, which suggests a decrease of 53.5% from the figure reported in the year-ago quarter. The consensus mark has declined 15.3% in the past seven days. Additionally, the consensus mark for revenues stands at $3,055 million, indicating a drop of 18.3% from the year-ago period’s reported figure.
The Estee Lauder Companies Inc. Price, Consensus and EPS Surprise
The coronavirus outbreak is spreading at an alarming rate. The cosmetics space is under major pressure with companies shutting stores and bearing the brunt of restricted air traffic. In this regard, Estee Lauder recently notified that most of its retail stores (operated by the company as well as its customers) in the Americas, and Europe, the Middle East & Africa have been shut since mid-March. Also, air travel restrictions are hurting Estee Lauder’s travel retail operations.
In fact, in its last earnings call, management stated that it expects the global prestige beauty space to be hurt by the coronavirus outbreak. The company then said that it expects continued declines in air travel and consumer traffic in core tourist and shopping areas. Estee Lauder particularly expects third-quarter sales to bear the largest adverse impact of COVID-19-related hurdles.
Nonetheless, Estee Lauder has been operating online amid the pandemic and witnessing sales growth in this channel. The company has long been benefiting from its online efforts like expanding brand presence across various third-party sites and rolling out new digital payment technologies, to name a few.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Estee Lauder 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.
Estee Lauder carries a Zacks Rank #4 (Sell) and an Earnings ESP of -0.06%.
Stocks With Favorable Combinations
Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Campbell Soup (CPB - Free Report) has an Earnings ESP of +21.06% and a Zacks Rank #2.
Flowers Foods (FLO - Free Report) has an Earnings ESP of +7.77% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Factors Shaping the Fate of Estee Lauder's (EL) Q3 Earnings
The Estee Lauder Companies Inc. (EL - Free Report) is scheduled to release third-quarter fiscal 2020 results on May 1. The cosmetics giant delivered a positive earnings surprise of 10.5% in the last reported quarter. Its earnings outperformed the Zacks Consensus Estimate by 13.7%, on average, in the trailing four quarters.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 72 cents per share, which suggests a decrease of 53.5% from the figure reported in the year-ago quarter. The consensus mark has declined 15.3% in the past seven days. Additionally, the consensus mark for revenues stands at $3,055 million, indicating a drop of 18.3% from the year-ago period’s reported figure.
The Estee Lauder Companies Inc. Price, Consensus and EPS Surprise
The Estee Lauder Companies Inc. price-consensus-eps-surprise-chart | The Estee Lauder Companies Inc. Quote
Factors at Play
The coronavirus outbreak is spreading at an alarming rate. The cosmetics space is under major pressure with companies shutting stores and bearing the brunt of restricted air traffic. In this regard, Estee Lauder recently notified that most of its retail stores (operated by the company as well as its customers) in the Americas, and Europe, the Middle East & Africa have been shut since mid-March. Also, air travel restrictions are hurting Estee Lauder’s travel retail operations.
In fact, in its last earnings call, management stated that it expects the global prestige beauty space to be hurt by the coronavirus outbreak. The company then said that it expects continued declines in air travel and consumer traffic in core tourist and shopping areas. Estee Lauder particularly expects third-quarter sales to bear the largest adverse impact of COVID-19-related hurdles.
Nonetheless, Estee Lauder has been operating online amid the pandemic and witnessing sales growth in this channel. The company has long been benefiting from its online efforts like expanding brand presence across various third-party sites and rolling out new digital payment technologies, to name a few.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Estee Lauder 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.
Estee Lauder carries a Zacks Rank #4 (Sell) and an Earnings ESP of -0.06%.
Stocks With Favorable Combinations
Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Hain Celestial (HAIN - Free Report) has an Earnings ESP of +9.24% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Campbell Soup (CPB - Free Report) has an Earnings ESP of +21.06% and a Zacks Rank #2.
Flowers Foods (FLO - Free Report) has an Earnings ESP of +7.77% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>