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Will Higher Revenues Drive Sprouts Farmers' (SFM) Q4 Earnings?
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Sprouts Farmers Market, Inc. (SFM - Free Report) is scheduled to report fourth-quarter 2018 results on Feb 21. In the trailing four quarters, this provider of fresh, natural, and organic food products has outperformed the Zacks Consensus Estimate by average of 3.1%. In the last reported quarter, the company reported positive earnings surprise of 3.9%.
How Are Estimates Shaping Up for Q4?
After registering a bottom-line increase of about 17.4% in the third quarter of 2018, Sprouts Farmers is likely to record year-over-year growth of roughly 12.5% in the fourth quarter. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which is pegged at 18 cents compared with 16 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has been stable in the last 30 days.
The Zacks Consensus Estimate for revenues is $1,265 million, up approximately 10.6% from the year-ago quarter. We note that total revenue of this Phoenix, AZ-based company had increased 10.2% in the last reported quarter on account of comparable store sales growth of 1.5% and robust performance in new outlets. The consensus mark for comparable store sales indicates an increase of 1.5%.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
In an effort to expand customer base, management has been taking several initiatives. The company launched Sprouts.com website and mobile app to aid customers experience hassle-free shopping. Moreover, the company has partnered with Instacart to offer same-day delivery to customers.
Further, the company is trying all means to provide ready-to-eat, ready-to-heat, and ready-to-cook items to customers. Apart from these, the company is trying to expand private-label offerings in departments under the Sprouts Market Corner Deli, The Butcher Shop at Sprouts and Sprouts Fish Market brands.
All these endeavors are likely to have a favorable impact on the quarter under review. Sprouts Farmers had earlier projected full-year earnings in the band of $1.28-$1.30 per share and net sales growth to 11-11.5%.
However, any deleverage in SG&A and direct store expenses may hurt margins. During the fourth quarter of 2018, direct store expense rose 12.5% due to planned wage investments, rise in healthcare costs and higher depreciation charges. Meanwhile, SG&A expenses rose 10% on account of higher advertising expenses and strategic investments in technology. Management had earlier guided direct store expenses to increase by roughly 35 basis points for the full year.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Sprouts Farmers is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
Nomad Foods Limited (NOMD - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2.
Kroger (KR - Free Report) has an Earnings ESP of +3.42% and a Zacks Rank #2.
Walmart (WMT - Free Report) has an Earnings ESP of +5.55% and a Zacks Rank #3.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Will Higher Revenues Drive Sprouts Farmers' (SFM) Q4 Earnings?
Sprouts Farmers Market, Inc. (SFM - Free Report) is scheduled to report fourth-quarter 2018 results on Feb 21. In the trailing four quarters, this provider of fresh, natural, and organic food products has outperformed the Zacks Consensus Estimate by average of 3.1%. In the last reported quarter, the company reported positive earnings surprise of 3.9%.
How Are Estimates Shaping Up for Q4?
After registering a bottom-line increase of about 17.4% in the third quarter of 2018, Sprouts Farmers is likely to record year-over-year growth of roughly 12.5% in the fourth quarter. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which is pegged at 18 cents compared with 16 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has been stable in the last 30 days.
The Zacks Consensus Estimate for revenues is $1,265 million, up approximately 10.6% from the year-ago quarter. We note that total revenue of this Phoenix, AZ-based company had increased 10.2% in the last reported quarter on account of comparable store sales growth of 1.5% and robust performance in new outlets. The consensus mark for comparable store sales indicates an increase of 1.5%.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise | Sprouts Farmers Market, Inc. Quote
Factors Holding Key
In an effort to expand customer base, management has been taking several initiatives. The company launched Sprouts.com website and mobile app to aid customers experience hassle-free shopping. Moreover, the company has partnered with Instacart to offer same-day delivery to customers.
Further, the company is trying all means to provide ready-to-eat, ready-to-heat, and ready-to-cook items to customers. Apart from these, the company is trying to expand private-label offerings in departments under the Sprouts Market Corner Deli, The Butcher Shop at Sprouts and Sprouts Fish Market brands.
All these endeavors are likely to have a favorable impact on the quarter under review. Sprouts Farmers had earlier projected full-year earnings in the band of $1.28-$1.30 per share and net sales growth to 11-11.5%.
However, any deleverage in SG&A and direct store expenses may hurt margins. During the fourth quarter of 2018, direct store expense rose 12.5% due to planned wage investments, rise in healthcare costs and higher depreciation charges. Meanwhile, SG&A expenses rose 10% on account of higher advertising expenses and strategic investments in technology. Management had earlier guided direct store expenses to increase by roughly 35 basis points for the full year.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Sprouts Farmers is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sprouts Farmers has a Zacks Rank #3 but an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.
3 Stocks With 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:
Nomad Foods Limited (NOMD - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2.
Kroger (KR - Free Report) has an Earnings ESP of +3.42% and a Zacks Rank #2.
Walmart (WMT - Free Report) has an Earnings ESP of +5.55% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>