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Baozun (BZUN) to Report Q3 Earnings: What's in the Cards?

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Baozun Inc. (BZUN - Free Report) is scheduled to report third-quarter 2018 results on Nov 21.

In the last reported quarter, the company’s non-GAAP net income per ADS was RMB 0.96 (15 cents) compared with RMB 0.73 (11 cents) in the year-ago quarter.

The company’s revenues grossed RMB 1,159.1 million ($175.2 million), up 30.5% from the year-earlier period.

For the upcoming quarterly results, the company expects revenues to be between RMB 1,090 million and RMB 1,120 million.

Let's see how things are shaping up for the upcoming announcement.

Factors at Play

Baozun is benefiting from its focus on developing innovative technologies, which is ramping up its efficiency and value for its brand partners. Expansion in the number of brand partners mainly in the apparel, cosmetics and FMGC categories is a key growth driver.

Rising popularity of brand partners’ products coupled with the company’s effective marketing and promotional campaigns is leading to solid growth in Product sales revenues.

Moreover, rapid growth in the company’s consignment model and service fee model is boosting Services revenues. Notably, the segment is not only gaining from the company's existing brand partners’ progress but also their addition to the portfolio. In the second quarter, Services revenues worth RMB 582.1 million ($88 million) soared 51.6% year over year.

However, the transition of Baozun’s leading electronics brand partner’s business in September 2017 from a distribution model to a consignment one persistently weighs on its Products sales revenues.

Additionally, increasing investments in innovations and technologies are likely to remain an overhang on short-term margin.

Baozun Inc. Price and EPS Surprise

Baozun Inc. Price and EPS Surprise | Baozun Inc. Quote

 

What Our Model Says

Our proven Zacks model clearly shows that the company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has maximum chances of beating estimates if it also has a positive Earnings ESP. While Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Baozun currently carries a Zacks Rank #3 but has an Earnings ESP of 0.00%, which makes surprise prediction difficult.

Stocks that Warrant a Look

Here are a few stocks worth considering as our model shows that these have the right combination of elements to beat on earnings in the upcoming releases:

Adobe Systems Incorporated (ADBE - Free Report) has an Earnings ESP of +0.19% and a Zacks Rank #2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Hewlett Packard Enterprise Company (HPE - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #3.

Science Applications International Corporation (SAIC - Free Report) has an Earnings ESP of +0.88% and a Zacks Rank of 3.

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