Helen of Troy Ltd.
) is set to report first-quarter fiscal 2015 results on Jul 9. Last
quarter, the company posted negative surprise of 4.5%. Let us see
how things are shaping up for this announcement.
Factors to be Considered this Quarter
Helen of Troy has been delivering soft results for the past few
quarters mainly due to weaker-than-expected revenues and currency
headwinds. Weakening consumer spending has resulted in lower sales
in all its product categories. Moreover, a challenging retail
environment, stiff competition and high promotional discounts have
resulted in margin contraction in the past few quarters.
However, we are encouraged by Helen of Troy's turnaround
initiatives. The company announced the reorganization of its
corporate departments and functions during the last earnings
conference call. Management is now divided into three global shared
service groups, each headed by a member of the executive leadership
team. This is expected to increase productivity and strengthen the
The new management team has promised to build better
communication across geographies, product categories and functional
areas. It has geared up market research and increased investments
in innovation to ensure a steady product pipeline. The company has
also ramped up its investment in advertising. These initiatives may
prove to be beneficial in improving the top line in the coming
Our proven model does not conclusively show that Helen of Troy
is likely to beat earnings this quarter. A stock needs to have both
and a Zacks Rank #1, 2 or 3 to surpass earnings estimate. However,
that is not the case here due to the following factors:
ESP for Helen of Troy is 0.00%.
Helen of Troy has a Zacks Rank #3 (Hold) which when combined with a
0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies that investors may want to
consider as our model shows that they have the right combination of
elements to post an earnings beat this quarter:
Johnson & Johnson (
, with Earnings ESP of +0.65% and a Zacks Rank #2 (Buy).
Sports Inc. (
, with Earnings ESP of +13.51% and a Zacks Rank #1 (Strong
TreeHouse Foods Inc. (
, with Earnings ESP of +1.21% and a Zacks Rank #1 (Strong Buy).
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JOHNSON & JOHNS (JNJ): Free Stock Analysis
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