For Immediate Release
Chicago, IL – August 27, 2010 – Zacks.com Analyst Blog features: The Hain Celestial Group Inc. (HAIN), Monster Worldwide, Inc. (MWW), Yahoo! Inc. (YHOO), Tiffany & Company (TIF) and Diageo Plc. (DEO ).
Here are highlights from Thursday’s Analyst Blog:
Hain Celestial Bottom Line Outdoes
The Hain Celestial Group Inc. (HAIN), which distributes, markets and sells various natural and organic foods as well as personal care products, recently posted fourth-quarter 2010 results.
The quarterly earnings of 26 cents a share outdid the Zacks Consensus Estimate of 24 cents, and surged 23.8% from 21 cents delivered in the prior-year quarter. On a reported basis, including one-time items, earnings came in at 16 cents a share compared with 3 cents earned in the year-ago quarter.
Quarterly Performance
Revenues for the quarter marginally dropped by 0.2% to $222.8 million from $223.3 million delivered in the prior-year quarter. Management hinted that despite a challenging economy the company was able to post healthy sales aided by North American and Continental European operations.
The prior-year quarter revenues exclude $35.5 million of sales related to Hain Pure Protein (HPP). Including HPP sales, revenues for the quarter tumbled 13.9% year over year. Effective June 30, 2009, Hain has not been incorporating HPP’s results due to the reduction in its ownership interest to 48.7% from 50.1%.
Management also indicated that sales climbed 4.6% during the quarter and exclude HPP sales and food-to-go sales to Marks and Spencer of $10.2 million.
Cost of sales dropped 22.1% to $164.8 million. Consequently, gross profit rose 22.9% to $58 million, whereas gross profit margin for the quarter expanded 780 basis points to 26%. On an adjusted basis, gross profit margin contracted 70 basis points to 26.2%.
Monster Acquires HotJobs
Monster Worldwide, Inc. (MWW) recently completed the acquisition of HotJobs for $225 million in cash. HotJobs is a leading online recruitment website which was previously owned by Yahoo! Inc. (YHOO)
As per the terms of the deal, Monster and Yahoo! have also entered into a three-year commercial traffic agreement, whereby Monster will become Yahoo!'s exclusive provider of career and job content on the Yahoo! homepage in the United States and Canada.
The HotJobs acquisition will add 6 to 12 cents to the bottom line by 2011 after paying Yahoo! for their traffic. HotJobs acquisition should strengthen Monster's position in the online job market and global recruitment resources. Along with an expanding customer base, Monster will now have access to roughly 62% of the US internet population (130 million).
Monster will also expand its newspaper partnerships from 400 to 1000 with the addition of 600 HotJobs daily and weekly newspapers providing local reach in all 50 states.
The economic downturn has adversely impacted Monster's business. With the economy showing signs of recovery, Monster is trying hard to revive its business. Monster is also taking steps to diversify its customer base. Monster has traditionally targeted the enterprise market, or those businesses that are among the largest 1,500 organizations/ operations on a global basis.
Earnings Preview: Tiffany & Co.
Tiffany & Company (TIF), a high-end jewelry designer, manufacturer and retailer, is scheduled to report its second-quarter 2010 financial results before the bell on Friday, August 27, 2010. The current Zacks Consensus Estimate for the quarter is 53 cents a share.
Earnings Surprise History
With respect to earnings surprises, Tiffany has missed as well as topped the Zacks Consensus Estimate over the last four quarters in the range from negative 4.4% to positive 43.5%. The average remained at positive 24.2%. This suggests that Tiffany has outperformed the Zacks Consensus Estimate by an average of 24.2% in the last four quarters.
Tiffany in Neutral Lane
Tiffany’s sales were hit hard by the recent economic downturn, when consumers lowered their discretionary spends, but as the recession eased, demand for luxury items improved. The company is well positioned to deliver robust sales and earnings growth. The company also holds a significant position in the world jewelry market and is poised to benefit from its increased geographic reach. The company has also been concentrating more on smaller-sized store formats that offer selected collections of lower-priced, higher-margin products.
However, Tiffany’s customers remain sensitive to macroeconomic factors including interest rate hikes, increase in fuel and energy costs, credit availability, unemployment levels, and high household debt levels, which may negatively impact their discretionary spending, and in turn the company’s growth and profitability.
Currently, we prefer to be Neutral on Tiffany. Moreover, the Zacks #3 Rank, which translates into a short-term ‘Hold’ rating, correlates with our long-term recommendation.
Diageo Posts Higher Profit
Diageo Plc.'s (DEO ) fiscal 2010 net income from continuing operations grew 1.5% to £1.63 billion ($2.58 billion) from £1.61 billion in the year-ago period. Earnings per share came in at £0.65 ($4.11 per ADR), compared to £0.64 per share in the year-ago quarter.
Net sales recorded growth of 5% year-over-year to £9.78 billion ($15.48 billion). Excluding the impact of foreign exchange, acquisitions and disposals, organic sales logged a growth of 2%. Volumes also grew 2% year-over-year to 143.4 million of equivalent units.
In North America, Diageo’s net sales were essentially flat year-over-year at £3.31 billion ($5.23 billion) as benefits from favorable foreign currency translations and acquisitions were offset by a decline in organic sales. The region was adversely affected by continued macroeconomic headwinds and sluggish consumer confidence. Diageo recorded volume declines across all key brands, except Johnny Walker and Guinness, which grew by 5% each.
In Europe, net sales remained almost flat at £2.76 billion ($4.37 billion) from £2.75 billion in the prior-year quarter. Diageo witnessed strong growth in Great Britain and Russia. However, Spain, Greece and Ireland witnessed lackluster performance. In terms of key brands, Johnnie Walker volumes declined 6%, while J&B and Guinness fell 8% and 4%, respectively.
In the International segment, Diageo’s net sales rose by 15% year-over-year to £2.63 billion ($4.16 billion) primarily due to strong performance in Latin America and Africa. In terms of key brands, Johnnie Walker volumes jumped 22%. Smirnoff volumes posted a growth of 7% year-over-year, while Buchanan’s rose 11%.
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YAHOO! INC (YHOO): Free Stock Analysis Report
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