Helen Of Troy (HELE) Q2 Earnings: What's In The Cards?

Helen of Troy Limited (NASDAQ:HELE) is set to report second-quarter fiscal 2018 results on Oct 5, after the closing bell.

Notably, the company’s earnings have outpaced the Zacks Consensus Estimate for eight consecutive quarters now, with a trailing four-quarter average of 18%. Let’s dive deeper to know what’s in store for this earnings season.

What Does the Zacks Model Unveil?

Our proven model shows that Helen of Troy is unlikely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Helen of Troy has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.37. Although the company’s Zacks Rank #3 increases the predictive power of ESP, its Earnings ESP of 0.00% makes surprise prediction difficult.

Earnings Estimate Revisions

Let’s look at the company’s earnings estimate revisions in order to get a clear picture of what analysts are thinking about Helen of Troy, right before the earnings release. The Zacks Consensus Estimate of $1.37 for the second quarter of fiscal 2018 has been stable in the last 30 days. The company reported earnings of $1.31 in the second quarter of fiscal 2017.

Furthermore, analysts polled by Zacks expect revenues of $381.0 million for the to-be-reported quarter, representing growth of 3.5% year over year.

Factors at Play

Helen of Troy’s shares have rallied 8.4% in the past month, substantially outperforming the Zacks Cosmetics industry’s gain of 1.2%. Currently, the industry is placed at the top 42% (107 out of 256) of the Zacks Classified industries.

Additionally, we remain encouraged by the company’s solid brand portfolio and its transformation strategy that remains on track. In fact, its leadership brands like Braun, PUR, Honeywell, OXO, Vicks, Hydro Flask and Hot Tools are gaining traction in various markets.

Also, Helen of Troy is exploring new opportunities for additional investments in product enhancement, expanding its footprint, digital marketing as well as e-commerce growth.

However, the company is facing a tough retail landscape including sluggish brick-and-mortar business. Furthermore, it is facing intense competition in the personal care category, and is also being impacted by changing consumer preferences. In addition, Helen of Troy is witnessing sluggishness in its Nutritional Supplements and Beauty segments.

Evidently, these factors hurt the company’s top line that has lagged the Zacks Consensus Estimate in three of the last five quarters.

Nevertheless, it is to be seen whether Helen of Troy is able to keep its positive earnings streak alive in the to-be-reported quarter.

Stocks Poised to Beat Earnings Estimates

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

The Procter & Gamble Company (NYSE:PG) has an Earnings ESP of +0.44% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Constellation Brands, Inc. (NYSE:STZ) has an Earnings ESP of +0.53% and a Zacks Rank #2.

Church & Dwight Co., Inc. (NYSE:CHD) has an Earnings ESP of +1.26% and a Zacks Rank #3.

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