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In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 9.4% and rose 6.3% year over year. Net sales beat the consensus estimate by 0.4% but decreased 4.5% from the year-ago quarter.
MHK’s earnings surpassed expectations in each of the trailing four quarters, with an average of 5.6%.
Trend in Estimate Revision
The Zacks Consensus Estimate for Mohawk’s second-quarter earnings per share (EPS) remained stable at $2.75 over the past 60 days, depicting a 0.4% decline from the prior-year period.
The consensus estimate for net sales is pegged at $2.84 billion, indicating a 3.6% decrease from the year-ago period.
Factors to Note
Mohawk’s top and bottom lines are expected to have declined in the second quarter due to difficult year-over-year comparisons in the residential sector owing to persistently high mortgage rates. Also, weaknesses in the remodeling projects are likely to have affected the results to some extent. Higher interest rates and inflationary pressure have been moderating demand for homes, thereby impacting consumer discretionary spending.
We expect net sales in the Global Ceramic to decline 3.6% year over year to $1.1 billion, Flooring North America (NA) to fall 3.4% year over year to $967.8 million, and Flooring Rest of World (ROW) to be down 4.3% year over year to $759.3 million.
The company expects second-quarter adjusted EPS in the range of $2.68-$2.78, excluding restructuring and other charges. This indicates a decline from the year-ago EPS figure of $2.76, considering the mid-point.
Our expectation for adjusted operating income for the Global Ceramic and Flooring ROW businesses suggests a decline of 19.2% and 3.2%, respectively, from the year-ago period’s figures.
Nonetheless, the company anticipates second-quarter sales to be seasonally higher than the first quarter due to European vacation schedules. Also, strategic investments in new products and enhanced merchandising & marketing activities are likely to have aided sales. MHK continues to invest in innovative products to increase sales and mix.
MHK has undertaken certain actions across the enterprise to reduce costs. The company is minimizing expenses, reducing overhead and restructuring to adapt to present conditions. Initiatives are being implemented to enhance processes and reduce the impact of inflation.
In the to-be-reported quarter, our model predicts the adjusted cost of goods sold to decline 5% year over year to $2.1 billion. Flooring NA business’ adjusted operating income also suggests a rise of 18.4% from the year-ago quarter.
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, this is not the case here, as you will see below.
Currently, MHK has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this time around.
MGM’s earnings topped the consensus mark in the last four quarters, with the average surprise being 27.3%. Earnings for the to-be-reported quarter are expected to grow 11.9% year over year.
Choice Hotels International, Inc. (CHH - Free Report) has an Earnings ESP of +3.52% and a Zacks Rank #3.
CHH’s earnings topped the consensus mark in three of the last four quarters and missed the same in the other one, with the average surprise being 4.6%. Earnings for the to-be-reported quarter are expected to increase 6.9% year over year.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +6.24% and a Zacks Rank #2.
MAR’s earnings topped the consensus mark in three of the last four quarters and missed the same in the other one, with the average surprise being 17.6%. Earnings for the to-be-reported quarter are likely to grow 10.2% year over year.
Image: Bigstock
Mohawk (MHK) Gears Up to Post Q2 Earnings: What's in Store?
Mohawk Industries, Inc. (MHK - Free Report) is scheduled to report second-quarter 2024 results on Jul 25, after market close.
In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 9.4% and rose 6.3% year over year. Net sales beat the consensus estimate by 0.4% but decreased 4.5% from the year-ago quarter.
MHK’s earnings surpassed expectations in each of the trailing four quarters, with an average of 5.6%.
Trend in Estimate Revision
The Zacks Consensus Estimate for Mohawk’s second-quarter earnings per share (EPS) remained stable at $2.75 over the past 60 days, depicting a 0.4% decline from the prior-year period.
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 $2.84 billion, indicating a 3.6% decrease from the year-ago period.
Factors to Note
Mohawk’s top and bottom lines are expected to have declined in the second quarter due to difficult year-over-year comparisons in the residential sector owing to persistently high mortgage rates. Also, weaknesses in the remodeling projects are likely to have affected the results to some extent. Higher interest rates and inflationary pressure have been moderating demand for homes, thereby impacting consumer discretionary spending.
We expect net sales in the Global Ceramic to decline 3.6% year over year to $1.1 billion, Flooring North America (NA) to fall 3.4% year over year to $967.8 million, and Flooring Rest of World (ROW) to be down 4.3% year over year to $759.3 million.
The company expects second-quarter adjusted EPS in the range of $2.68-$2.78, excluding restructuring and other charges. This indicates a decline from the year-ago EPS figure of $2.76, considering the mid-point.
Our expectation for adjusted operating income for the Global Ceramic and Flooring ROW businesses suggests a decline of 19.2% and 3.2%, respectively, from the year-ago period’s figures.
Nonetheless, the company anticipates second-quarter sales to be seasonally higher than the first quarter due to European vacation schedules. Also, strategic investments in new products and enhanced merchandising & marketing activities are likely to have aided sales. MHK continues to invest in innovative products to increase sales and mix.
MHK has undertaken certain actions across the enterprise to reduce costs. The company is minimizing expenses, reducing overhead and restructuring to adapt to present conditions. Initiatives are being implemented to enhance processes and reduce the impact of inflation.
In the to-be-reported quarter, our model predicts the adjusted cost of goods sold to decline 5% year over year to $2.1 billion. Flooring NA business’ adjusted operating income also suggests a rise of 18.4% from the year-ago quarter.
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, this is not the case here, as you will see below.
Currently, MHK has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this time around.
MGM Resorts International (MGM - Free Report) has an Earnings ESP of +15.35% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
MGM’s earnings topped the consensus mark in the last four quarters, with the average surprise being 27.3%. Earnings for the to-be-reported quarter are expected to grow 11.9% year over year.
Choice Hotels International, Inc. (CHH - Free Report) has an Earnings ESP of +3.52% and a Zacks Rank #3.
CHH’s earnings topped the consensus mark in three of the last four quarters and missed the same in the other one, with the average surprise being 4.6%. Earnings for the to-be-reported quarter are expected to increase 6.9% year over year.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +6.24% and a Zacks Rank #2.
MAR’s earnings topped the consensus mark in three of the last four quarters and missed the same in the other one, with the average surprise being 17.6%. Earnings for the to-be-reported quarter are likely to grow 10.2% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.