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Factors to Note Ahead of Hain Celestial's (HAIN) Q3 Earnings

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The Hain Celestial Group, Inc. (HAIN - Free Report) is scheduled to release third-quarter fiscal 2020 results on May 7. This organic and natural products company has a trailing four-quarter positive earnings surprise of nearly 7%, on average.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 24 cents, suggesting growth of 14.3% from the year-ago quarter’s tally. Also, the consensus mark has moved up by a penny over the past 30 days. Moreover, the consensus estimate for quarterly revenues is pegged at $535.4 million, which indicates a decline of 10.7% from the year-ago quarter.

Key Factors to Note

Hain Celestial has been gaining from its transformation strategy and Project Terra efforts, which are likely to reflect on fiscal third-quarter results. Notably, the transformation strategy is focused on simplifying portfolio, identifying areas of productivity savings, enhancing margins, reviving top-line growth and improving cash flows. Project Terra efforts are aimed at cutting costs and improving margins. In addition, the divestiture of underperforming units to focus on areas with better potential has been contributing. Elimination of uneconomic spending, innovation and stock keeping unit rationalization program have most likely aided the quarterly performance.

However, any deleverage in SG&A expenses may show on the company’s profits. Additionally, foreign currency translation woes remain. Moreover, divestiture of brands and units might have impacted the overall top line in the to-be-reported quarter owing to lost sales from such units.

We note that the Zacks Consensus Estimate for quarterly revenues at North America and International segments are pegged at $307 million and $225 million, respectively. While the consensus estimate for North America indicates growth of 9.4%, the same for International hints at a decline of 0.4%, on a sequential basis.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Hain Celestial this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hain Celestial sports a Zacks Rank #1 and an Earnings ESP of +9.24%.

More Stocks With a Favorable Combination

Here are some more companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:

Campbell Soup (CPB - Free Report) has an Earnings ESP of +14.36% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flowers Foods, Inc. (FLO - Free Report) has an Earnings ESP of +7.77% and a Zacks Rank #2.

Nomad Foods (NOMD - Free Report) has an Earnings ESP of +5.32% and a Zacks Rank #2.

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