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In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 36.7% but declined 53.7% year over year. Net sales beat the Zacks Consensus Estimate by 3.2% but decreased 6.9% from the year-ago quarter.
MHK’s earnings surpassed expectations in 11 of the trailing 12 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for Mohawk’s second-quarter earnings is pegged at $2.66 per share, indicating a 39.7% decline from the prior-year reported figure of $4.41.
The consensus estimate for net sales is pegged at $2.94 billion, suggesting a 6.8% decrease from the year-ago reported figure of $3.15 billion.
Factors to Note
Mohawk’s earnings and net sales are expected to have declined in the second quarter, thanks to postponed new home sales and residential remodeling projects. Higher mortgage rates and inflationary pressure have been moderating demand for homes, impacting consumer discretionary spending.
Mohawk has been witnessing material, labor and transportation challenges, thereby inflating costs. It expects industry volume and pricing to remain under pressure across the markets served, which are likely to weigh on the to-be-reported quarter’s results.
The commercial sector remains stronger than residential, but higher interest rates and tighter lending conditions are expected to impact the business to some extent.
MHK expects second-quarter adjusted earnings (excluding restructuring, acquisition and other charges) in the range of $2.56-$2.66 per share. Our model suggests the same to decline by 41.2% year over year to $2.59 per share.
We expect Global Ceramic’s net sales to fall by 7.7%. Flooring NA net sales are likely to decline by 7.6% and Flooring ROW is expected to be down 13% year over year.
Our expectation for adjusted operating income for the Global Ceramic, Flooring NA and Flooring ROW businesses suggests a decline of 22.6%, 37.6% and 23.9%, respectively, from the year-ago period.
Nonetheless, the company expects a seasonal improvement in demand and reduced energy and material costs. Also, a focus on better-performing channels, differentiated products and enhanced service and value are likely to have aided the results.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Mohawk 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. Unfortunately, that is not the case here, as you will see below.
Currently, MHK has a Zacks Rank #2 and an Earnings ESP of -0.97%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider as our model shows that they have the right combination of elements to post an earnings beat for the to-be-reported quarter:
MGM’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 81%. Earnings for the to-be-reported quarter are expected to increase a whopping 1,666.7% year over year.
Marriott International (MAR - Free Report) currently has an Earnings ESP of +8.44% and a Zacks Rank #2.
The consensus mark for Marriott’s second-quarter earnings is pegged at $2.19 per share, suggesting year-over-year growth of 21.7%. MAR has a trailing four-quarter earnings surprise of 8%, on average.
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has an Earnings ESP of +10.43% and a Zacks Rank #2.
NCLH’s earnings beat estimates in two of the trailing four quarters and missed twice, the average negative surprise being 4%. Earnings for the to-be-reported quarter are expected to increase 123.7% year over year.
Image: Bigstock
Low Housing, Remodeling Activity to Ail Mohawk (MHK) Q2 Earnings
Mohawk Industries, Inc. (MHK - Free Report) is scheduled to report second-quarter 2023 results on Jul 27, after market close.
In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 36.7% but declined 53.7% year over year. Net sales beat the Zacks Consensus Estimate by 3.2% but decreased 6.9% from the year-ago quarter.
MHK’s earnings surpassed expectations in 11 of the trailing 12 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for Mohawk’s second-quarter earnings is pegged at $2.66 per share, indicating a 39.7% decline from the prior-year reported figure of $4.41.
Mohawk Industries, Inc. Price and EPS Surprise
Mohawk Industries, Inc. price-eps-surprise | Mohawk Industries, Inc. Quote
The consensus estimate for net sales is pegged at $2.94 billion, suggesting a 6.8% decrease from the year-ago reported figure of $3.15 billion.
Factors to Note
Mohawk’s earnings and net sales are expected to have declined in the second quarter, thanks to postponed new home sales and residential remodeling projects. Higher mortgage rates and inflationary pressure have been moderating demand for homes, impacting consumer discretionary spending.
Mohawk has been witnessing material, labor and transportation challenges, thereby inflating costs. It expects industry volume and pricing to remain under pressure across the markets served, which are likely to weigh on the to-be-reported quarter’s results.
The commercial sector remains stronger than residential, but higher interest rates and tighter lending conditions are expected to impact the business to some extent.
MHK expects second-quarter adjusted earnings (excluding restructuring, acquisition and other charges) in the range of $2.56-$2.66 per share. Our model suggests the same to decline by 41.2% year over year to $2.59 per share.
We expect Global Ceramic’s net sales to fall by 7.7%. Flooring NA net sales are likely to decline by 7.6% and Flooring ROW is expected to be down 13% year over year.
Our expectation for adjusted operating income for the Global Ceramic, Flooring NA and Flooring ROW businesses suggests a decline of 22.6%, 37.6% and 23.9%, respectively, from the year-ago period.
Nonetheless, the company expects a seasonal improvement in demand and reduced energy and material costs. Also, a focus on better-performing channels, differentiated products and enhanced service and value are likely to have aided the results.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Mohawk 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. Unfortunately, that is not the case here, as you will see below.
Currently, MHK has a Zacks Rank #2 and an Earnings ESP of -0.97%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider as our model shows that they have the right combination of elements to post an earnings beat for the to-be-reported quarter:
MGM Resorts International (MGM - Free Report) has an Earnings ESP of +19.43% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
MGM’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 81%. Earnings for the to-be-reported quarter are expected to increase a whopping 1,666.7% year over year.
Marriott International (MAR - Free Report) currently has an Earnings ESP of +8.44% and a Zacks Rank #2.
The consensus mark for Marriott’s second-quarter earnings is pegged at $2.19 per share, suggesting year-over-year growth of 21.7%. MAR has a trailing four-quarter earnings surprise of 8%, on average.
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has an Earnings ESP of +10.43% and a Zacks Rank #2.
NCLH’s earnings beat estimates in two of the trailing four quarters and missed twice, the average negative surprise being 4%. Earnings for the to-be-reported quarter are expected to increase 123.7% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.