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GrowGeneration (GRWG) to Post Q4 Earnings: What's in Store?
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GrowGeneration Corp. (GRWG - Free Report) is scheduled to report fourth-quarter 2020 results on Mar 24, after the closing bell.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter total sales is pegged at $61.2 million, suggesting growth of 141% from the prior-year quarter. The consensus mark for earnings per share currently stands at 6 cents. The company had incurred loss of 1 cent per share in the fourth quarter of 2019. Notably, earnings estimates have remained stable over the past 30 days.
Q3 Performance
GrowGeneration reported year-over-year improvement in both third-quarter top and bottom lines. While earnings came in line with the Zacks Consensus Estimate, revenues beat the same.
The company beat earnings estimates in one of the trailing four quarters, missed twice and came in line in one. Its trailing four-quarter earnings surprise is a negative 95.8%, on average.
Factors to Note
GrowGeneration’s online sales have been surging this year and the fourth quarter was no exception to this trend as customers stayed at home during the pandemic. Further, the company rebranded its e-commerce operation, HeavyGarden.com and GrowGen.Pro, as growgeneration.com, which is an omni-channel sales approach to facilitate e-commerce across all its locations. It is more customer-friendly and provides both options — delivery or pick-up from store. The company noted that visitors to its website are trending more than 150,000 per month.
Sales to commercial customers, including expert growers and cultivators, have been rising given the company’s continued focus on increasing commercial revenues by adding new customer accounts. GrowGeneration was marked as an essential supplier to the agricultural industry amid the pandemic, and all of its stores have been in operation. Walk-in transactions at stores have been averaging around 12,000 walk-in transactions per week. Further, the company has been active on the acquisition front, with buyouts in 2020 expanding its geographic footprint and private label products. It opened a new store and added 13 stores through acquisitions.
All these factors are expected to have contributed to the company’s top-line performance in the to-be-reported quarter. This is reflected in GrowGeneration’s announcement in January that same-store sales in fourth-quarter 2020 surged 58% while revenues skyrocketed 142% to $61.5 million, both on a year-over-year basis.
The company’s focus on margin expansion strategies that include furthering the deployment of more private-label products and driving more efficiency at the purchasing level may have boosted fourth-quarter earnings performance.
However, higher store operating costs due to the opening of new stores and acquired stores, and higher salary expense on account of the increase in corporate staff to support expanding operations are likely to have weighed on the to-be-reported quarter’s performance.
What Our Model Unveils
Our proven model does not conclusively predict a beat for GrowGeneration this earnings season. 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. But that is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: GrowGeneration’s Earnings ESP is 0.00%.
Zacks Rank: GrowGeneration currently has a Zacks Rank #3.
Price Performance
Shares of the company have gained 32.9% in the past three months compared with the industry’s growth of 18.5%.
Stocks Poised to Beat Earnings Estimates
Here are some stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
Akouos, Inc. has an Earnings ESP of +12.25% and a Zacks Rank #3.
Darden Restaurants, Inc. (DRI - Free Report) has a Zacks Rank #3 and an Earnings ESP of +2.70%, at present.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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GrowGeneration (GRWG) to Post Q4 Earnings: What's in Store?
GrowGeneration Corp. (GRWG - Free Report) is scheduled to report fourth-quarter 2020 results on Mar 24, after the closing bell.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter total sales is pegged at $61.2 million, suggesting growth of 141% from the prior-year quarter. The consensus mark for earnings per share currently stands at 6 cents. The company had incurred loss of 1 cent per share in the fourth quarter of 2019. Notably, earnings estimates have remained stable over the past 30 days.
Q3 Performance
GrowGeneration reported year-over-year improvement in both third-quarter top and bottom lines. While earnings came in line with the Zacks Consensus Estimate, revenues beat the same.
The company beat earnings estimates in one of the trailing four quarters, missed twice and came in line in one. Its trailing four-quarter earnings surprise is a negative 95.8%, on average.
Factors to Note
GrowGeneration’s online sales have been surging this year and the fourth quarter was no exception to this trend as customers stayed at home during the pandemic. Further, the company rebranded its e-commerce operation, HeavyGarden.com and GrowGen.Pro, as growgeneration.com, which is an omni-channel sales approach to facilitate e-commerce across all its locations. It is more customer-friendly and provides both options — delivery or pick-up from store. The company noted that visitors to its website are trending more than 150,000 per month.
Sales to commercial customers, including expert growers and cultivators, have been rising given the company’s continued focus on increasing commercial revenues by adding new customer accounts. GrowGeneration was marked as an essential supplier to the agricultural industry amid the pandemic, and all of its stores have been in operation. Walk-in transactions at stores have been averaging around 12,000 walk-in transactions per week. Further, the company has been active on the acquisition front, with buyouts in 2020 expanding its geographic footprint and private label products. It opened a new store and added 13 stores through acquisitions.
All these factors are expected to have contributed to the company’s top-line performance in the to-be-reported quarter. This is reflected in GrowGeneration’s announcement in January that same-store sales in fourth-quarter 2020 surged 58% while revenues skyrocketed 142% to $61.5 million, both on a year-over-year basis.
The company’s focus on margin expansion strategies that include furthering the deployment of more private-label products and driving more efficiency at the purchasing level may have boosted fourth-quarter earnings performance.
However, higher store operating costs due to the opening of new stores and acquired stores, and higher salary expense on account of the increase in corporate staff to support expanding operations are likely to have weighed on the to-be-reported quarter’s performance.
What Our Model Unveils
Our proven model does not conclusively predict a beat for GrowGeneration this earnings season. 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. But that is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: GrowGeneration’s Earnings ESP is 0.00%.
Zacks Rank: GrowGeneration currently has a Zacks Rank #3.
Price Performance
Shares of the company have gained 32.9% in the past three months compared with the industry’s growth of 18.5%.
Stocks Poised to Beat Earnings Estimates
Here are some stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
Winnebago Industries, Inc. (WGO - Free Report) has an Earnings ESP of +7.69% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Akouos, Inc. has an Earnings ESP of +12.25% and a Zacks Rank #3.
Darden Restaurants, Inc. (DRI - Free Report) has a Zacks Rank #3 and an Earnings ESP of +2.70%, at present.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>