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H World Group (HTHT) to Report Q1 Earnings: What's in Store?

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H World Group Limited (HTHT - Free Report) is scheduled to report first-quarter 2024 results on May 17. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.5%.

Q1 Estimates

The Zacks Consensus Estimate for earnings is pegged at 27 cents, indicating a decline of 38.6% from the prior-year level. In the past 30 days, the consensus estimate has remained unchanged. The consensus mark for revenues is pegged at $699 million, suggesting a 7.2% increase from the year-ago reported figure.

Factors to Note

HTHT’s quarterly performance is likely to have gained from sustained recovery in both leisure and business travel demand. Expansion efforts, robust ADR and RevPAR growth are likely to have aided the top line.

Management has invested in building its brand reputation, becoming one of the foremost names in the hotel-chain industry. This increased recognition has attracted more customers and contributed to the company's expansion. Recognizing the potential in lower-tier cities, HTHT has proactively developed its organizational capabilities and human resources to tap into these emerging markets. These factors are likely to have driven its top line in the quarter to be reported.

However, operating costs due to business recovery and less rental reduction are likely to have hurt the  bottom line. The company is also witnessing high selling and marketing expenses due to an increase in commissions and promotional expenses.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for H World Group 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. But that is not the case here.

Earnings ESP: HTHT 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: HTHT sports a Zacks Rank #1.

Stocks With Favorable Combination

Here are three stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Abercrombie & Fitch (ANF - Free Report) currently has an Earnings ESP of +5.10% and carries a Zacks Rank #2. The Zacks Consensus Estimate for first-quarter fiscal 2024 earnings per share (EPS) is pegged at $1.54, sharply up from 39 cents registered in the year-ago period. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for quarterly revenues is pegged at $940 million, which indicates an increase of 12.4% from the figure reported in the prior-year quarter. ANF has a trailing four-quarter earnings surprise of 715.6%, on average.

American Eagle Outfitters (AEO - Free Report) currently has an Earnings ESP of +11.11% and a Zacks Rank #2. The Zacks Consensus Estimate for quarterly EPS of 27 cents suggests an increase of 58.8% from the year-ago quarter.

The consensus mark for revenues is pegged at $1.15 billion, which implies an increase of 5.9% from the figure reported in the year-ago quarter. AEO has a trailing four-quarter earnings surprise of 22.7%, on average.

Ross Stores (ROST - Free Report) currently has an Earnings ESP of +3.24% and carries a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter fiscal 2024 EPS is pegged at $1.34, which suggests an increase of 22.9% from the year-earlier levels.

The Zacks Consensus Estimate for quarterly revenues is pegged at $4.82 billion, which implies a jump of 7.3% from the figure reported in the prior-year quarter. ROST has a trailing four-quarter earnings surprise of 9.1%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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