Spectrum Brands Holdings, Inc. SPB is expected to register top and bottom-line growth when it reports first-quarter fiscal 2025 results on Feb. 6, 2025, before the opening bell. The Zacks Consensus Estimate for SPB’s revenues is pegged at $701.5 million, indicating a rise of 1.4% from the year-ago quarter's actual.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The Zacks Consensus Estimate for Spectrum Brands’ earnings per share (EPS) is pegged at 91 cents, indicating an increase of 16.7% from the figure in the year-ago quarter. The consensus mark for EPS has moved down 3.2% in the past seven days.

In the last reported quarter, the company delivered a negative earnings surprise of 14.2%. SPB has recorded an earnings surprise of 87.4% in the trailing four quarters, on average.

Factors Likely to Influence SPB's Q1 Results

Spectrum Brands’ first-quarter fiscal 2025 results are likely to reflect gains from the Global Productivity Improvement Plan (GPIP), innovations and strategic transformation efforts. The ongoing GPIP plan focuses on enhancing operational efficiency and reinvesting savings into growth initiatives like innovation, brand advertising, and research and development.

Additionally, the company’s results are expected to benefit from pricing actions, cost efficiencies, volume-driven returns and a favorable product mix, all of which are expected to have contributed to margins. Its proactive cost-cutting measures, including permanent reductions in salaried headcount and cuts to advertising and promotional spending, are likely to have resulted in a more disciplined cost structure. Gains from these are expected to have aided the gross margin .

The company has been seeing robust growth in its e-commerce unit. SPB has been streamlining its organizational structure. Such strengths are likely to have aided the company’s top- and bottom-line performance. We note that the Zacks Consensus Estimate for SPB’s Home & Personal Care segment’s sales is pegged at $349 million for first-quarter fiscal 2025, up 1.7% year over year. The consensus estimate for the Global Pet Care segment’s revenues indicates 1.1% year-over-year growth to $280 million while the Home & Garden segment’s revenues are pegged at $74 million, implying 2.8% growth year over year.

However, soft demand for small kitchen appliances, volume declines in certain pet channels and the impact of SKU rationalizations are likely to have continued to act as deterrents. The company has been grappling with geopolitical and macroeconomic uncertainty for a while now. In addition, foreign currency translations have been acting as headwinds.

What the Zacks Model Unveils for SPB

Our proven model does not conclusively predict an earnings beat for Spectrum Brands 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. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Spectrum Brands Holdings Inc. Price and EPS Surprise

Spectrum Brands Holdings Inc. price-eps-surprise | Spectrum Brands Holdings Inc. Quote

Spectrum Brands has an Earnings ESP of -12.22% and a Zacks Rank #4 (Sell).

SPB Stock’s Price Performance & Valuation Picture

From a valuation perspective, Spectrum Brands is trading at a premium relative to industry benchmarks. It has a forward 12-month price-to-earnings ratio of 15.82X, which is higher than the Zacks Consumer Products – Discretionary industry’s average of 12.53X. The stock has a five-year high of 23.14X.

The recent market movements show that SPB’s shares have lost 7.3% in the past three months against the industry's 4.4% growth.

Stocks With the Favorable Combination

Here are some companies, which according to our model, have the right combination of elements to beat on earnings:

Columbia Sportswear COLM currently has an Earnings ESP of +5.51% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here. 

COLM is likely to register top and bottom-line growth when it reports fourth-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.1 billion, indicating 3.1% growth from the figure in the year-ago quarter.

The consensus estimate for Columbia Sportswear’s earnings is pegged at $1.92 per share, implying a 3.2% increase from the year-earlier quarter. COLM has a trailing four-quarter earnings surprise of 36.5%, on average.

Abercrombie ANF presently has an Earnings ESP of +0.48% and a Zacks Rank of 2. The company is likely to register a bottom-line rise when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly EPS of $3.51 indicates an increase of 18.2% from the year-ago quarter’s level. 
 
Abercrombie’s top line is expected to rise year over year. The consensus estimate for quarterly revenues is pegged at $1.6 billion, which indicates an improvement of 7.7% from the figure in the prior-year quarter. ANF has a trailing four-quarter earnings surprise of 14.8%, on average. 

lululemon athletica LULU currently has an Earnings ESP of +0.25% and a Zacks Rank of 2. LULU is likely to register top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.6 billion, indicating 11.5% growth from the figure reported in the year-ago quarter.

The consensus estimate for LULU’s earnings is pegged at $5.83 a share, implying a 10.2% increase from the year-earlier quarter. LULU has a trailing four-quarter earnings surprise of 6.7%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

Columbia Sportswear Company (COLM) : Free Stock Analysis Report

lululemon athletica inc. (LULU) : Free Stock Analysis Report

Spectrum Brands Holdings Inc. (SPB) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research