Spectrum Brands (SPB) to Post Q4 Earnings: What’s in Store?

Spectrum Brands Holdings, Inc. SPB is slated to report fourth-quarter fiscal 2020 results on Nov 13, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 9.2%. Moreover, its earnings outperformed the Zacks Consensus Estimate by 2.1%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for fiscal fourth-quarter earnings has moved up a penny to $1.19 in the past 30 days. Moreover, this suggests a 5.3% rise from the year-ago quarter’s reported figure. Further, the consensus mark for revenues is pegged at $1,017 million, indicating growth of 2.4% from the figure reported in the year-ago quarter.

Factors to Note

Spectrum Brands’ focus on enhancing marketing activities, improving e-commerce capabilities and optimizing cost structure is likely to have favorably impacted the quarterly performance. The company has been benefiting from its Global Productivity Improvement Plan, which aims at improving operating efficiency and effectiveness.

Markedly, the company has been gaining from solid demand for its products stemming from the ongoing coronavirus crisis. We believe that continued higher sales in Home & Garden, Home & Personal Care and Global Pet Care are likely to have contributed to the company’s top-line performance. The Zacks Consensus Estimate for fiscal fourth-quarter sales in the Home & Garden segment stands at $119 million, indicating 5% growth from the year-ago quarter’s reported figure.

We note that the company has entered the aquatics and reptile space via the Omega Sea buyout, which is now part of its Global Pet Care portfolio of aquatic brands. This is likely to have favorably impacted the Global Pet Care segment. In fact, the Zacks Consensus Estimate for sales in this unit is pegged at $244 million, which implies an increase of 6.6% year over year.

Although the Hardware & Home Improvement segment witnessed soft sales due to COVID-19-related shutdowns in the recent past, the unit is likely to have seen an improvement in the fiscal fourth quarter, driven by housing starts, and repair and remodelling activities.

Spectrum Brands Holdings Inc. Price and EPS Surprise

Spectrum Brands Holdings Inc. Price and EPS Surprise
Spectrum Brands Holdings Inc. Price and EPS Surprise

Spectrum Brands Holdings Inc. price-eps-surprise | Spectrum Brands Holdings Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Spectrum Brands this time around. 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.

Spectrum Brands has a Zacks Rank #2 and an Earnings ESP of +9.24%.

Other Stocks With Favorable Combinations

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

Central Garden Pet Company CENT currently has an Earnings ESP of +57.14% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Guess GES currently has an Earnings ESP of +60.00% and a Zacks Rank #3.

PVH Corp. PVH presently has an Earnings ESP of +161.64% and a Zacks Rank #3.

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