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What Awaits The Estee Lauder Companies (EL) in Q3 Earnings?

The Estee Lauder Companies Inc. EL is likely to register a decline in the top and the bottom line when it reports third-quarter fiscal 2023 earnings on May 3, 2023. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.72 billion, suggesting a fall of 12.5% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at 49 cents per share. This indicates a slump of 74.2% from the figure reported in the prior-year fiscal quarter.

We expect fiscal third-quarter net sales to be down 12.7% year over year to $3,704.6 million. The bottom line will likely decline 77.5% to 43 cents a share.

The manufacturer and marketer of skincare, makeup, fragrance and hair care products has a trailing four-quarter earnings surprise of 17.8%, on average. The Estee Lauder Companies delivered an earnings surprise of 19.4% in the last reported quarter.

The Estee Lauder Companies Inc. Price and EPS Surprise

 

The Estee Lauder Companies Inc. Price and EPS Surprise
The Estee Lauder Companies Inc. Price and EPS Surprise

The Estee Lauder Companies Inc. price-eps-surprise | The Estee Lauder Companies Inc. Quote

 

Things To Note

The Estee Lauder Companies has been operating amid tough macro-economic environment with increased inflation, supply chain-related issues and concerns surrounding the recession. The company’s significant international presence exposes it to risks of unfavorable currency translations.

For the third quarter of fiscal 2023, management expects net sales to decline in the band of 12-14% year over year. The guidance includes currency headwinds, a shift in return to growth in Asia Travel Retail and mainland China and the termination of certain license agreements. It anticipates organic net sales decline of 8-10% in the to-be-reported quarter. The quarterly adjusted EPS is anticipated in the band of 37-47 cents, indicating a 75-81% slump from the year-ago period’ levels. The adjusted EPS is likely to decline 73-79% at constant currency in the fiscal third quarter.

That being said, The Estee Lauder Companies has been benefiting from its strong online business. The company has strong presence in emerging markets, which insulates it from the macroeconomic headwinds in the matured markets.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for The Estee Lauder Companies 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Estee Lauder Companies carries a Zacks Rank #3 and has an Earnings ESP of +3.26%.

Other Stocks with Favorable Combination

Here are some other companies, which according to our model, also have the right combination of elements to deliver an earnings beat.

Sysco Corporation SYY currently has an Earnings ESP of +3.07% and a Zacks Rank of 3. The company is likely to register a top- and bottom-line increase when it reports third-quarter fiscal 2023 results. The consensus mark for SYY’s quarterly revenues is pegged at $18.7 billion, which suggests an increase of 10.8% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Sysco’s bottom line has remained unchanged at 92 cents per share in the past 30 days. The consensus estimate indicates a 29.6% improvement from the year-ago quarter’s figure.

TreeHouse Foods THS has an Earnings ESP of +19.75% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for its quarterly revenues is pegged at around $849 million, which suggests a decline of 25.6% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for TreeHouse Foods’ quarterly earnings has moved up 5.4% in the past 30 days to 39 cents per share against the year-ago quarter’s reported figure of a loss of 15 cents. THS has a trailing four-quarter earnings surprise of 48.8%, on average.

Clorox CLX currently has an Earnings ESP of +2.34% and a Zacks Rank of 2. CLX is anticipated to register top-line growth when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for Clorox’s quarterly revenues is pegged at $1.83 billion, indicating a rise of 0.9% from the figure reported in the prior-year quarter.

The consensus estimate for Clorox’s bottom line is pegged at $1.20 per share, suggesting a decline of 8.4% from the year-ago quarter’s reported figure. CLX has delivered an earnings beat of 27.8%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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