Household products company Spectrum Brands (NYSE:SPB) will be reporting earnings tomorrow before the bell. Here's what to look for.
Last quarter Spectrum Brands reported revenues of $735.5 million, down 10.1% year on year, missing analyst expectations by 6.6%. It was a mixed quarter for the company, with a miss of analysts' revenue estimates. On the other hand, Spectrum Brands blew past analysts' EPS expectations this quarter. We were also glad its gross margin outperformed Wall Street's estimates.
Is Spectrum Brands buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting Spectrum Brands's revenue to decline 1.3% year on year to $739.7 million, a further deceleration on the 1.1% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.99 per share.
The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing three downward revisions over the last thirty days. The company missed Wall St's revenue estimates six times over the last two years.
Looking at Spectrum Brands's peers in the household products segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. WD-40 delivered top-line growth of 7.7% year on year, beating analyst estimates by 1.6% and Colgate-Palmolive reported revenues up 10.3% year on year, exceeding estimates by 2.1%. Both stocks (WD-40 and Colgate-Palmolive) traded flat on the results.
Investors in the household products segment have had steady hands going into the earnings, with the stocks up on average 1.7% over the last month. Spectrum Brands is up 1% during the same time, and is heading into the earnings with analyst price target of $91.6, compared to share price of $77.8.
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The author has no position in any of the stocks mentioned.