Advertisement
Canada markets closed
  • S&P/TSX

    22,167.03
    +59.95 (+0.27%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CAD/USD

    0.7386
    +0.0014 (+0.19%)
     
  • CRUDE OIL

    83.11
    +1.76 (+2.16%)
     
  • Bitcoin CAD

    95,913.16
    +2,322.22 (+2.48%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,254.80
    +42.10 (+1.90%)
     
  • RUSSELL 2000

    2,124.55
    +10.20 (+0.48%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ futures

    18,465.00
    -38.75 (-0.21%)
     
  • VOLATILITY

    13.01
    +0.23 (+1.80%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6844
    +0.0039 (+0.57%)
     

Grocery Outlet (GO) Queued for Q4 Earnings: Factors to Note

Grocery Outlet Holding Corp. GO is likely to register an increase in the top line when it reports fourth-quarter 2022 earnings on Feb 28 after market close. The Zacks Consensus Estimate for revenues stands at $904.2 million, indicating an increase of 15.5% from the prior-year reported figure.

The bottom line of this extreme value retailer of quality, name-brand consumables and fresh products is also expected to increase year over year. The Zacks Consensus Estimate for fourth-quarter earnings per share has been stable at 23 cents over the past 30 days. The figure suggests an increase of 15% from the year-ago period.

Grocery Outlet has a trailing four-quarter earnings surprise of 9.7%, on average. In the last reported quarter, this Emeryville, CA-based company surpassed the Zacks Consensus Estimate by a margin of 8%.

Factors to Note

Grocery Outlet’s flexible sourcing and distribution business model, which helps it offer products at an exceptional value, and excellent service from independent operators are among the key factors driving revenues.

The company’s opportunistic purchasing strategy, marketing efforts, store-growth endeavors and e-commerce initiatives to deepen the customer reach also appear encouraging. Cumulatively, these are likely to have favorably impacted the to-be-reported quarter's top line.

Grocery Outlet Holding Corp. Price, Consensus and EPS Surprise

Grocery Outlet Holding Corp. Price, Consensus and EPS Surprise
Grocery Outlet Holding Corp. Price, Consensus and EPS Surprise

Grocery Outlet Holding Corp. price-consensus-eps-surprise-chart | Grocery Outlet Holding Corp. Quote

ADVERTISEMENT

The company has been offering the same-day delivery of everyday essentials and staples from nearly all its stores in collaboration with Instacart. We believe that Grocery Outlet’s compelling value proposition continues to attract bargain hunters, encourage customers to revisit stores and increase basket sizes.

On its last earnings call, management guided fourth-quarter 2022 comparable store sales growth of 12% against a decline of 1.2% witnessed in the prior-year quarter. Management projected a gross margin of approximately 30.3% for the fourth quarter compared with the 30.9% reported in the year-ago period, suggesting normal fourth-quarter seasonality to the holiday product mix.

Grocery Outlet expects SG&A expenses, as a percentage of sales, to decline year over year. This can be attributed to store expense leverage from fixed costs and independent operator commissions, partly offset by higher incentive compensation expenses.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Grocery Outlet this time. 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. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Grocery Outlet has a Zacks Rank #3 but an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

3 Stocks With the Favorable Combination

Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Casey's General Stores CASY currently has an Earnings ESP of +14.04% and a Zacks Rank #3. The company is likely to register a bottom-line decline when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $1.67 suggests a decline of 2.3% from the year-ago quarter.

Casey's top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.52 billion, which indicates an increase of 15.5% from the figure reported in the prior-year quarter. Casey's has a trailing four-quarter earnings surprise of 7.2%, on average.

Dollar General DG currently has an Earnings ESP of +0.93% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of $3.24 suggests an increase of 26.1% from the year-ago quarter.

Dollar General’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $10.32 billion, which suggests a rise of 19.3% from the figure reported in the prior-year quarter.

Ross Stores ROST currently has an Earnings ESP of +3.16% and a Zacks Rank #3. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of $1.23 suggests an increase of 18.3% from the year-ago quarter.

Ross Stores’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.13 billion, which suggests a rise of 2.2% from the figure reported in the prior-year quarter. ROST delivered an earnings beat of 10.5%, on average, in the trailing four quarters.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Dollar General Corporation (DG) : Free Stock Analysis Report

Ross Stores, Inc. (ROST) : Free Stock Analysis Report

Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report

Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research