Spectrum Brands Holdings, Inc. SPB is expected to register top and bottom-line decline when it reports second-quarter fiscal 2025 results on May 8, before the opening bell. The Zacks Consensus Estimate for the company’s fiscal second-quarter revenues is pegged at $694.9 million, indicating a decline of 3.3% from the year-ago quarter.

The Zacks Consensus Estimate for Spectrum Brands’ fiscal second-quarter earnings per share (EPS) is pegged at $1.35 per share, indicating a decline of 16.7% from the figure reported in the year-ago quarter. The consensus mark for EPS has moved down 9.4% in the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

In the last reported quarter, the company delivered an earnings surprise of 12.1%. SPB has recorded an earnings surprise of 52.5% in the trailing four quarters, on average.

What the Zacks Model Unveils for SPB Stock

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’s not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Spectrum Brands has an Earnings ESP of +3.70% and a Zacks Rank #5 (Strong Sell) at present.

Trends to Watch for SPB's Q2 Earnings

Spectrum Brands’ second-quarter fiscal 2025 results are expected to reflect the continued impacts of its aggressive investment strategy aimed at long-term value creation. The company has remained focused on enhancing brand equity, expanding its e-commerce footprint and modernizing its supply chain, all of which are core pillars of its growth transformation. However, these initiatives, while promising over the long run, are likely to exert near-term pressure on the company’s financial performance.

The expiration of tariff exemptions and newly enacted tariffs, particularly on product lines within the HPC segment, are expected to have increased costs, putting pressure on margins in the second quarter of 2025. While management is accelerating efforts to shift production, these transitions take time, and near-term profitability may suffer as higher costs impact margins before cost-saving measures take full effect. If additional tariffs are introduced beyond those recently announced, these could further erode margins and make cost management more difficult.

Spectrum Brands’ ongoing efforts to divest or restructure the Home & Personal Care (HPC) segment may continue to face headwinds from geopolitical uncertainties and operational complexities. These factors are expected to delay progress on strategic transactions, limiting management’s ability to unlock value in the near term.

Soft consumer demand across discretionary categories, particularly in the HPC segment and small kitchen appliances, may weigh on overall sales, as macroeconomic pressures like inflation and high interest rates persist. In addition, foreign currency translations have been acting as headwinds.

We note that the Zacks Consensus Estimate for SPB’s Home & Personal Care segment’s sales is pegged at $261 million for the second quarter of fiscal 2025, up from $260 million year over year. The consensus estimate for Global Pet Care segment revenues is $278 million, down from $291 million, while Home & Garden segment revenues are pegged at $157 million, up from $155 million year over year.

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 12.79X, which is higher than the Zacks Consumer Products – Discretionary industry’s average of 11.34X. The stock has a five-year high of 57.40X.

The recent market movements show that SPB’s shares have lost 22% in the past three months compared to the industry's 9.9% decline.

SPB Stock Price Performance in the Past Three Months

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Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Under Armour, Inc. UAA has an Earnings ESP of +20.75% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Under Armour’s fourth-quarter fiscal 2025 earnings is pegged at a loss of 9 cents per share, implying a decline of 181.8% from the year-ago quarter. The consensus mark for earnings has been unchanged in the past 30 days. For Under Armour’s quarterly revenues, the consensus mark is pegged at $1.2 billion, which indicates a decrease of 13.1% from the year-ago quarter. UAA delivered an earnings surprise of 98.6% in the last quarter.

Ralph Lauren RL currently has an Earnings ESP of +2.21% and a Zacks Rank of 3. RL is likely to register growth in its top and bottom lines when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.6 billion, indicating a 4.1% rise from the figure reported in the prior-year quarter.

The consensus estimate for Ralph Lauren’s earnings is pegged at $1.96 per share, implying a 14.6% jump from the year-ago quarter. The consensus mark for earnings has moved up by 1% in the past 30 days. RL delivered an earnings surprise of 6.5% in the last quarter.

Planet Fitness PLNT presently has an Earnings ESP of +2.79% and a Zacks Rank #3. The company is expected to register an increase in its top and bottom lines when it reports first-quarter 2025 numbers. The Zacks Consensus Estimate for PLNT’s quarterly revenues is pegged at $280.7 million, which indicates growth of 13.2% from the prior-year quarter’s reported figure.

The consensus mark for Planet Fitness’ quarterly earnings remained stable in the past 30 days at 61 cents per share. The estimate indicates an increase of 15.1% from the year-ago quarter. PLNT delivered an earnings surprise of 10.2% in the trailing four quarters, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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