Back to top

Analyst Blog

Zacks Equity Research

Consumer Stocks Earnings to Watch on Oct 20: POOL, SNA, MNRO

POOL SNA MNRO

Trades from $3

The Q3 earnings season has started off on an encouraging note with multiple companies reporting positive earnings as well as sales surprises.

According to our latest Earnings Preview report, total earnings for the 34 S&P 500 members that have reported results (as of Oct 14) are up 1.3% from the year-ago quarter, courtesy of a 2.9% rise in revenues. Notably, 79.4% of the companies that have reported their quarterly numbers have beaten earnings estimates while 64.7% have surpassed top-line expectations.

Coming to the Consumer Discretionary sector, the space is expected to fare well this earnings season buoyed by an improving job scenario and increasing consumer confidence.

We note that though overall earnings for the sector in third-quarter 2016 are expected to be down 0.5% year over year, revenues are likely to surge 11.8%. Notably, during the second quarter, the sector witnessed an improvement of 8.2% and 7.6% in earnings and revenues, respectively.

Three consumer stocks are set to report their quarterly numbers on Oct 20. Will these companies manage to put up a decent performance? Let’s take a look at what might be in store for them this quarter:

Pool Corp. (POOL - Free Report) , the world's largest wholesale distributor of swimming pool supplies, equipment and related products, posted a positive earnings surprise of 3.66% last quarter. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an impressive average beat of 190.08%.

POOL CORP Price and EPS Surprise

 

POOL CORP Price and EPS Surprise | POOL CORP Quote

Notably, our proven model shows that an earnings beat is uncertain for Pool this time around. This is because, according to our quantitative model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 (Hold) or better – to increase its odds of an earnings surprise.

For the third quarter of 2016, the company has an Earnings ESP of 0.00% and a Zacks Rank #3, making it difficult to conclusively predict a beat. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Notably, the Zacks Consensus Estimate for the quarter’s earnings is pegged at 99 cents.

Base business sales growth and favorable trends in the housing market should continue to boost Pool’s top and bottom line performance in the to-be-reported quarter. However, seasonality of the company’s business coupled with currency headwinds might limit revenue growth to some extent.

Snap-on Incorporated (SNA - Free Report) recorded a positive earnings surprise of 6.31% last quarter. Moreover, the company’s earnings outpaced the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 3.88%.

SNAP-ON INC Price and EPS Surprise

 

SNAP-ON INC Price and EPS Surprise | SNAP-ON INC Quote

We note that Snap-on is unlikely to post a beat in third-quarter 2016 due to the combination of its Zacks Rank #4 (Sell) and Earnings ESP of 0.00%. Meanwhile, the Zacks Consensus Estimate for the quarter’s earnings is pegged at $2.15.

Tools Group and Repair Systems & Information segments along with Snap-On’s flourishing financial services portfolio are expected to act as major profit churners in Q3. However, the ongoing softness in industrial markets, sluggish oil and gas market activities along with foreign currency fluctuations are likely to mar the company’s third quarter results  (read more: Will Snap-On Disappoint this Earnings Season?).

Monro Muffler Brake Inc. (MNRO - Free Report) , a provider of automotive undercar repair and tire services, registered a 2.04% positive earnings surprise in the previous quarter. Moreover, the trailing four-quarter average earnings surprise stands at a positive 0.38%.

MONRO MUFFLER Price and EPS Surprise

 

MONRO MUFFLER Price and EPS Surprise | MONRO MUFFLER Quote

For second-quarter fiscal 2017, the company has an Earnings ESP of 0.00%, which when combined with a Zacks Rank #3, makes surprise prediction difficult. Meanwhile, the Zacks Consensus Estimate for the quarter’s bottom line is pegged at 56 cents.

Stay tuned! Check back on our full write-up on earnings releases of these stocks.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>


In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

POOL CORP (POOL) - free report >>

SNAP-ON INC (SNA) - free report >>

MONRO MUFFLER (MNRO) - free report >>