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Sanderson Farms (SAFM) to Report Q1 Earnings: What's in Store?

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Sanderson Farms, Inc. (SAFM - Free Report) is likely to report an improvement in the top and the bottom line, when it reports first-quarter fiscal 2021 numbers on Feb 25. The Zacks Consensus Estimate has narrowed from a loss of $1 per share to a loss of 73 cents per share, in the past 30 days. The estimate suggests an improvement from the year-ago quarter’s reported loss of $1.76 per share. Notably, Sanderson Farms’ bottom line surpassed the Zacks Consensus Estimate by a wide margin in the trailing four quarters, on average.

The Zacks Consensus Estimate for revenues is pegged at nearly $863 million, suggesting growth of 4.9% from the year-ago quarter’s reported figure.

Sanderson Farms, Inc. Price and EPS Surprise

 

Sanderson Farms, Inc. Price and EPS Surprise

Sanderson Farms, Inc. price-eps-surprise | Sanderson Farms, Inc. Quote

 

Key Factors to Note

Sanderson Farms is gaining from favorable demand trends for products sold at retail grocery stores, especially chicken products, as consumers continue adhering to at-home cooking amid the pandemic. The persistence of the trend is likely to have aided first-quarter performance. Apart from these, the company is benefiting from its efforts to strengthen its product portfolio and enhance capacity.

However, Sanderson Farms has been witnessing reduced demand from food service customers owing to soft trends in the away-from-home food channels amid the coronavirus pandemic. In its last earnings call, management stated that it expects demand from food service customers to be under pressure until people do not turn up in large numbers to dine out. This is likely to have impacted performance in the quarter under review.

Additionally, unfavorable feed costs are a concern for the company. Moreover, lower price realizations are a threat to profitability. During fourth-quarter fiscal 2020, Sanderson Farms witnessed weak market prices for boneless breast meat as well as other products from its big bird food service plants.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Sanderson Farms this time around. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Sanderson Farms sports a Zacks Rank #1 and an Earnings ESP of +122.02%.

Other Stocks With Favorable Combinations

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

Grocery Outlet Holding Corp. (GO - Free Report) currently has an Earnings ESP of +5.66% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ollie’s Bargain Outlet Holdings, Inc. (OLLI - Free Report) currently has an Earnings ESP of +3.73% and carries a Zacks Rank #3.

The J. M. Smucker Company (SJM - Free Report) currently has an Earnings ESP of +1.60% and a Zacks Rank of 3.

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