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High Costs to Affect Habit Restaurants' (HABT) Q3 Earnings
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The Habit Restaurants, Inc. is scheduled to report third-quarter 2018 results on Oct 30, after the market closes.
The company’s various promotional and marketing efforts are supposed to have aided the overall top line in the to-be-reported quarter. Meanwhile, higher costs might dent the company’s earnings in the third quarter.
Notably, shares of the company have gained 14.6% in the past year, outperforming the industry’s rally of 6.2%.
Let’s see how things are shaping up for the to-be-reported quarter.
Top Line Likely to Gain
Habit Restaurants’ differentiated brand positioning, successful marketing and culinary innovation are the major revenue drivers. The Zacks Consensus Estimate for third-quarter revenues is pegged at $101.3 million, reflecting 19.6% year-over-year growth.
Even though the company witnessed a 0.2% decline in comps in the third quarter of 2017, we believe that excellent operational execution, high-quality limited time offers, targeted digital strategies and innovative media partnerships might drive traffic in the third quarter and in turn comps. Subsequently, the consensus estimate for third-quarter comps is projected to inch up 1.5% against the second quarter’s comps growth of 1.2%.
Will Earnings Suffer?
Though the company is looking to expand its presence via unit openings, an increase in expenses related to pre-opening costs, and development and management of new units might dent third-quarter profits.
Incremental investments in marketing programs, and promotional activity, as well as consistently high labor expenses, are also expected to weigh on margins. Further, management noted that commodity costs, particularly beef, chicken and produce might remain high. This, in turn, could pressurize margins in the to-be-reported quarter.
Subsequently, the consensus estimate for the quarter under review’s break-even earnings marks a deterioration of 100% year over year.
Our Quantitative Model Does Not Predict a Beat
Habit Restaurants does not have the right combination of two main ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
Earnings ESP: The company has 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.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The Habit Restaurants, Inc. Price and EPS Surprise
Here are some companies in the restaurant space, which, per our model, have the right combination of elements to post an earnings beat this quarter.
Brinker (EAT - Free Report) has an Earnings ESP of +7.88% and a Zacks Rank #3. The company is scheduled to report quarterly numbers on Oct 30.
Cheesecake Factory (CAKE - Free Report) is slated to report quarterly results on Oct 30. The company carries a Zacks Rank #3 and has an Earnings ESP of +0.10%.
Jack in the Box (JACK - Free Report) has an Earnings ESP of +3.18% and a Zacks Rank #3. The company is expected to report quarterly numbers on Dec5.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
High Costs to Affect Habit Restaurants' (HABT) Q3 Earnings
The Habit Restaurants, Inc. is scheduled to report third-quarter 2018 results on Oct 30, after the market closes.
The company’s various promotional and marketing efforts are supposed to have aided the overall top line in the to-be-reported quarter. Meanwhile, higher costs might dent the company’s earnings in the third quarter.
Notably, shares of the company have gained 14.6% in the past year, outperforming the industry’s rally of 6.2%.
Let’s see how things are shaping up for the to-be-reported quarter.
Top Line Likely to Gain
Habit Restaurants’ differentiated brand positioning, successful marketing and culinary innovation are the major revenue drivers. The Zacks Consensus Estimate for third-quarter revenues is pegged at $101.3 million, reflecting 19.6% year-over-year growth.
Even though the company witnessed a 0.2% decline in comps in the third quarter of 2017, we believe that excellent operational execution, high-quality limited time offers, targeted digital strategies and innovative media partnerships might drive traffic in the third quarter and in turn comps. Subsequently, the consensus estimate for third-quarter comps is projected to inch up 1.5% against the second quarter’s comps growth of 1.2%.
Will Earnings Suffer?
Though the company is looking to expand its presence via unit openings, an increase in expenses related to pre-opening costs, and development and management of new units might dent third-quarter profits.
Incremental investments in marketing programs, and promotional activity, as well as consistently high labor expenses, are also expected to weigh on margins. Further, management noted that commodity costs, particularly beef, chicken and produce might remain high. This, in turn, could pressurize margins in the to-be-reported quarter.
Subsequently, the consensus estimate for the quarter under review’s break-even earnings marks a deterioration of 100% year over year.
Our Quantitative Model Does Not Predict a Beat
Habit Restaurants does not have the right combination of two main ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
Earnings ESP: The company has 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.
Zacks Rank: The stock currently has a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The Habit Restaurants, Inc. Price and EPS Surprise
The Habit Restaurants, Inc. Price and EPS Surprise | The Habit Restaurants, Inc. Quote
Stocks to Consider
Here are some companies in the restaurant space, which, per our model, have the right combination of elements to post an earnings beat this quarter.
Brinker (EAT - Free Report) has an Earnings ESP of +7.88% and a Zacks Rank #3. The company is scheduled to report quarterly numbers on Oct 30.
Cheesecake Factory (CAKE - Free Report) is slated to report quarterly results on Oct 30. The company carries a Zacks Rank #3 and has an Earnings ESP of +0.10%.
Jack in the Box (JACK - Free Report) has an Earnings ESP of +3.18% and a Zacks Rank #3. The company is expected to report quarterly numbers on Dec5.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>