Yahoo Finance Here's How Newell (NWL) is Poised Ahead of Q1 Earnings
Newell Brands Inc. NWL is expected to have witnessed year-over-year declines in the top and the bottom lines in its first-quarter 2023 results scheduled on Apr 28, before the opening bell.
The Zacks Consensus Estimate for first-quarter loss is pegged at 4 cents, which suggests a decline of 111.1% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. For quarterly revenues, the consensus mark is pegged at $1.8 billion, indicating a decline of 25.2% from the figure reported in the year-ago quarter.
We expect the company’s first-quarter total revenues to plunge 24.5% year over year to $1.8 billion and the bottom line to improve 111.8% to a loss of 4 cents per share.
In the last reported quarter, the Atlanta, GA-based company delivered an earnings surprise of 33.3%. Its bottom line beat the Zacks Consensus Estimate by 25.2%, on average, in the trailing four quarters.
Newell Brands Inc. Price and EPS Surprise
Newell Brands Inc. price-eps-surprise | Newell Brands Inc. Quote
Key Factors to Note
Newell has been gaining from continued online strength driven by increased investments, better customer engagement and expanded omnichannel capabilities, including buy online and pick up in stores as well as ship from store facilities in its Yankee Candle retail stores.
The company remains on track with significant actions to accelerate productivity and efficiency by accelerating fuel productivity plans, driving automation and fully implementing Project Ovid. Increased focus on revenue growth management, aggressive efforts to reduce SKU as well as supply network optimization are expected to have aided the first-quarter performance. Also, its stringent cost-cutting plans such as rightsizing overhead costs based on the simplification agenda bode well.
Management has been working toward reducing international dependency by moving to a One Newell go-to-market approach in key regions. Notably, the company will combine its Commercial Solutions, Home Appliances and Home Solutions segments to form one operating segment, which is the Home & Commercial Solutions segment. Learning & Development and Outdoor & Recreation will remain the company’s other two operating segments. This new restructuring initiative is expected to have generated significant savings and helped offset the impacts of macroeconomic headwinds.
However, the company has been reeling under a tough environment, reduced inventory and dismal demand for general merchandise categories. These headwinds are likely to have dented the performance in the quarter under review.
Also, adverse foreign exchange and inflation remain concerning. Newell has been witnessing significant inflation in food, housing and energy, leading to reduced consumer discretionary spending. Management expects discretionary spending levels to remain constrained. It also predicts continued normalization of home and outdoor categories from COVID peak demand levels.
On the company’s last earnings call, first-quarter 2023 sales were envisioned to be $1.79-$1.84 billion, with a core sales decline of 16-18%. The company expected a normalized operating margin of 3-3.5% and a normalized loss of 3-6 cents per share.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Newell 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. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Newell currently has an Earnings ESP of +16.67% and a Zacks Rank of 3.
Other Stocks With Favorable Combination
Here are some companies, which according to our model shows, have the right combination of elements to deliver an earnings beat.
TreeHouse Foods THS has an Earnings ESP of +19.75% and a Zacks Rank of 3 at present. The company is slated to report first-quarter 2023 results on May 8. The Zacks Consensus Estimate for its quarterly revenues is pegged at $849.03 million, which suggests a decline of 25.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for TreeHouse’s quarterly earnings has moved up 5.4% in the past 30 days to 39 cents per share, suggesting growth of 360% from the year-ago quarter’s reported number. THS’ earnings beat the consensus estimate in the trailing four quarters, delivering a positive earnings surprise of 48.8%, on average.
Colgate-Palmolive CL has an Earnings ESP of +1.20% and a Zacks Rank of 2 at present. The company is expected to report first-quarter 2023 results on Apr 28. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4.6 billion, which suggests growth of 4.2% from the figure reported in the prior-year quarter.
The consensus estimate for Colgate’s quarterly earnings has remained unchanged in the past 30 days to 70 cents per share, suggesting a decline of 5.4% from the year-ago quarter’s reported number. CL’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering a positive earnings surprise of 0.4%, on average.
e.l.f. Beauty, Inc. ELF has an Earnings ESP of +3.77% and a Zacks Rank of 2 at present. The company is slated to report fourth-quarter fiscal 2023 results on May 24. The Zacks Consensus Estimate for its quarterly revenues is pegged at $155.1 million, which suggests growth of 47.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for e.l.f. Beauty’s quarterly earnings has remained unchanged in the past 30 days at 19 cents per share, suggesting growth of 46.2% from the year-ago quarter’s reported number. ELS’ earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering a positive earnings surprise of 105%, on average.
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Newell Brands Inc. (NWL) : Free Stock Analysis Report
Colgate-Palmolive Company (CL) : Free Stock Analysis Report
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e.l.f. Beauty (ELF) : Free Stock Analysis Report
