We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zoe's Kitchen (ZOES) Q2 Earnings Preview: A Hit or Miss?
Read MoreHide Full Article
Zoe's Kitchen, Inc. is scheduled to report second-quarter 2016 numbers on Aug 22, after market close.
Last quarter, Zoe's Kitchen’s earnings surpassed the Zacks Consensus Estimate which led to a positive earnings surprise of 50.00%. In fact, the company posted positive earnings surprise in all of the last four quarters, with an average beat of 47.92%.
Let’s see how things are shaping up for this announcement.
Zoe's Kitchen began trading in Apr 2014. This fast casual restaurant specializing in Mediterranean cuisine has posted better-than-expected revenues and earnings in almost all of the quarters so far.
Comps improved in all the previous quarters backed by improved traffic and an increase in product mix. We expect the trend to continue in the to-be-reported quarter as well, given the company’s increased focus on menu innovation and marketing and promotional campaigns to promote these items. Moreover, increased focus on catering should drive top-line growth. Meanwhile, various cost savings initiatives undertaken by the company are likely to boost second-quarter earnings.
However, increasing labor costs along with higher store operating expenses may dent the company’s profits in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Zoe's Kitchen is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Zoe's Kitchen has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 6 cents.
Zacks Rank: Zoe's Kitchen has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Williams-Sonoma Inc. (WSM - Free Report) has an earnings ESP of +1.72% and a Zacks Rank #2.
Wal-Mart Stores Inc. (WMT - Free Report) has an earnings ESP of +0.98% and a Zacks Rank #2.
Best Buy Co., Inc. (BBY - Free Report) has an earnings ESP of +4.76% and a Zacks Rank #3.
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 >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Zoe's Kitchen (ZOES) Q2 Earnings Preview: A Hit or Miss?
Zoe's Kitchen, Inc. is scheduled to report second-quarter 2016 numbers on Aug 22, after market close.
Last quarter, Zoe's Kitchen’s earnings surpassed the Zacks Consensus Estimate which led to a positive earnings surprise of 50.00%. In fact, the company posted positive earnings surprise in all of the last four quarters, with an average beat of 47.92%.
Let’s see how things are shaping up for this announcement.
ZOES KITCHEN Price and EPS Surprise
ZOES KITCHEN Price and EPS Surprise | ZOES KITCHEN Quote
Factors Likely to Influence this Quarter
Zoe's Kitchen began trading in Apr 2014. This fast casual restaurant specializing in Mediterranean cuisine has posted better-than-expected revenues and earnings in almost all of the quarters so far.
Comps improved in all the previous quarters backed by improved traffic and an increase in product mix. We expect the trend to continue in the to-be-reported quarter as well, given the company’s increased focus on menu innovation and marketing and promotional campaigns to promote these items. Moreover, increased focus on catering should drive top-line growth. Meanwhile, various cost savings initiatives undertaken by the company are likely to boost second-quarter earnings.
However, increasing labor costs along with higher store operating expenses may dent the company’s profits in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Zoe's Kitchen is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Zoe's Kitchen has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 6 cents.
Zacks Rank: Zoe's Kitchen has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Williams-Sonoma Inc. (WSM - Free Report) has an earnings ESP of +1.72% and a Zacks Rank #2.
Wal-Mart Stores Inc. (WMT - Free Report) has an earnings ESP of +0.98% and a Zacks Rank #2.
Best Buy Co., Inc. (BBY - Free Report) has an earnings ESP of +4.76% and a Zacks Rank #3.
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 >>