SodaStream International Ltd.
) is set to report second-quarter fiscal 2014 results on Jul 30,
before the market opens. Last quarter, the company delivered a
positive earnings surprise of 300.0%. Let's see how things are
shaping up for this announcement.
Factors to Consider This Quarter
The Israel-based manufacturer of household soda machines has
been seeing soft sales in the U.S., which accounts for about 30% of
its revenues, due to difficult retail environment. However,
international markets have been doing well.
In the last reported quarter - first-quarter 2014 - sales
declined in the Americas due to elevated inventory levels at retail
customers due to a weak holiday sellout in the December quarter.
Also, difficult year-ago comparisons hurt sales in the reported
quarter. Margins also remained weak in the quarter due to
unfavorable mix, currency headwinds and higher promotional and
In the second quarter, management expects revenues to increase
in a mid single-digit range as soda maker sell-in will continue to
remain under pressure, though to a lesser extent than the first
quarter. Management hinted at the first-quarter conference call
that the Americas segment will be slightly slower for the rest of
the year. However, the Western Europe segment is expected to grow
slightly faster than expected.
SodaStream's products are primarily sold at huge retail stores
like Kohl's, Corp. (
), Macy's, Bed Bath & Beyond.
Our proven model does not conclusively show that SodaStream is
likely to beat earnings this quarter. That is because a stock needs
to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the
case here, as you will see below.
Negative Zacks ESP:
The Earnings ESP is -3.13% as the Most Accurate Estimate stands at
31 cents per share, while the Zacks Consensus Estimate is higher at
SodaStream carries a Zacks Rank #4 (Sell). 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
Other consumer staples stocks that have both a positive Earnings
ESP and a favorable Zacks Rank are:
Treehouse Foods, Inc.(
), with an Earnings ESP of +1.21% and a Zacks Rank #1 (Strong
The J.M. Smucker Co. (
), with an Earnings ESP of +1.46% and a Zacks Rank #3 (Hold).
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SODASTREAM INTL (SODA): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
KOHLS CORP (KSS): Free Stock Analysis Report
TREEHOUSE FOODS (THS): Free Stock Analysis
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