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Restaurant Stocks Nov 3 Earnings Lineup: SBUX, LOCO & More
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We are in the thick of the Q3 earnings season with 332 of the S&P 500 members having already reported their quarterly numbers (as of Nov 1), per the latest Earnings Outlook.
Turning our focus to the widely popular restaurant industry, we note that the performance of the players here has not been enticing.
A soft consumer spending environment in the U.S. restaurant space, which is leading to lower traffic and comps, is turning out to be a major headwind for the top line.
Limited revenue growth has thus hurt the performance of major players in the space like Yum! Brands, Inc.’s (YUM - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) , Dunkin’ Brands Group , Buffalo Wild Wings Inc. and others.
A number of restaurateurs are set to report their quarterly numbers on Nov 3. Let’s take a look at what might be in store for these companies:
Starbucks Corporation’s (SBUX - Free Report) earnings were in line with the Zacks Consensus Estimate last quarter. The trailing four-quarter average earnings surprise is a negative 0.01%.
Notably, our proven model shows that an earnings beat is uncertain for Starbucks in fourth-quarter fiscal 2016. This is because, according to our quantitative model, a company needs the right combination of the two key ingredients – a Zacks Rank #3 (Hold) or better and a positive Earnings ESP – to increase its odds of an earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
For the quarter, the company has an earnings ESP of 0.00% and a Zacks Rank #3, making it difficult to conclusively predict a beat.
Notably, the Zacks Consensus Estimate for the quarter’s earnings is pegged at 55 cents. For the fiscal fourth quarter, adjusted earnings per share are expected in the range of 54–55 cents, representing a growth rate of 26–28%. Meanwhile, in the previous quarter, though sales growth was robust in the America, the same was a disappointment in Europe, Middle East and Africa (EMEA). We expect this trend to continue in the to-be-reported quarter as well (read more: Starbucks to Report Q4 Earnings: What's in Store?).
El Pollo Loco Holdings, Inc. (LOCO - Free Report) posted a 5.56% positive earnings surprise in the previous quarter. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 8.85%.
For the third quarter, the Zacks Consensus Estimate is pegged at 19 cents per share. The company has an Earnings ESP of 0.00%, which when combined with a Zacks Rank #3, makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We expect the company’s positive comps trend for 20 consecutive quarters on the back of various value, operational and service initiatives to continue in the to-be-reported quarter. However, higher costs and expenses related to sales initiatives might mar profits (read more: What's in Store for El Pollo Loco in Q3 Earnings?).
Noodles & Company (NDLS) recorded a negative earnings surprise of 50.00% last quarter. Moreover, the trailing four-quarter average earnings surprise is a negative 45.24%.
We note that Noddles & Company is unlikely to post a beat in third-quarter 2016 due to the combination of its Zacks Rank #4 (Sell) and Earnings ESP of -33.33%. The Zacks Consensus Estimate for the quarter’s earnings is pegged at a loss of 3 cents.
Notably, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Higher costs and expenses have been hurting profits over the past few quarters. We do not expect any significant improvement in Q3. Nonetheless, various sales building initiatives undertaken by the company should somewhat boost the results (read more: Will Noodles & Company Disappoint in Q3 Earnings?).
Bojangles', Inc. registered a 17.39% positive earnings surprise in the previous quarter. In fact, the company surpassed the Zacks Consensus Estimate in each of the trailing for quarters, with an average beat of 19.41%.
We note that the company is unlikely to post a beat in third-quarter 2016 due to the combination of its Zacks Rank #4 and Earnings ESP of -9.52%. The Zacks Consensus Estimate for the quarter’s bottom line is pegged at 21 cents.
Stay tuned! Check back on our full write-up on earnings releases of these stocks.
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Restaurant Stocks Nov 3 Earnings Lineup: SBUX, LOCO & More
We are in the thick of the Q3 earnings season with 332 of the S&P 500 members having already reported their quarterly numbers (as of Nov 1), per the latest Earnings Outlook.
Turning our focus to the widely popular restaurant industry, we note that the performance of the players here has not been enticing.
A soft consumer spending environment in the U.S. restaurant space, which is leading to lower traffic and comps, is turning out to be a major headwind for the top line.
Limited revenue growth has thus hurt the performance of major players in the space like Yum! Brands, Inc.’s (YUM - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) , Dunkin’ Brands Group , Buffalo Wild Wings Inc. and others.
A number of restaurateurs are set to report their quarterly numbers on Nov 3. Let’s take a look at what might be in store for these companies:
Starbucks Corporation’s (SBUX - Free Report) earnings were in line with the Zacks Consensus Estimate last quarter. The trailing four-quarter average earnings surprise is a negative 0.01%.
STARBUCKS CORP Price and EPS Surprise
STARBUCKS CORP Price and EPS Surprise | STARBUCKS CORP Quote
Notably, our proven model shows that an earnings beat is uncertain for Starbucks in fourth-quarter fiscal 2016. This is because, according to our quantitative model, a company needs the right combination of the two key ingredients – a Zacks Rank #3 (Hold) or better and a positive Earnings ESP – to increase its odds of an earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
For the quarter, the company has an earnings ESP of 0.00% and a Zacks Rank #3, making it difficult to conclusively predict a beat.
Notably, the Zacks Consensus Estimate for the quarter’s earnings is pegged at 55 cents. For the fiscal fourth quarter, adjusted earnings per share are expected in the range of 54–55 cents, representing a growth rate of 26–28%. Meanwhile, in the previous quarter, though sales growth was robust in the America, the same was a disappointment in Europe, Middle East and Africa (EMEA). We expect this trend to continue in the to-be-reported quarter as well (read more: Starbucks to Report Q4 Earnings: What's in Store?).
El Pollo Loco Holdings, Inc. (LOCO - Free Report) posted a 5.56% positive earnings surprise in the previous quarter. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 8.85%.
EL POLLO LOCO Price and EPS Surprise
EL POLLO LOCO Price and EPS Surprise | EL POLLO LOCO Quote
For the third quarter, the Zacks Consensus Estimate is pegged at 19 cents per share. The company has an Earnings ESP of 0.00%, which when combined with a Zacks Rank #3, makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We expect the company’s positive comps trend for 20 consecutive quarters on the back of various value, operational and service initiatives to continue in the to-be-reported quarter. However, higher costs and expenses related to sales initiatives might mar profits (read more: What's in Store for El Pollo Loco in Q3 Earnings?).
Noodles & Company (NDLS) recorded a negative earnings surprise of 50.00% last quarter. Moreover, the trailing four-quarter average earnings surprise is a negative 45.24%.
NOODLES & CO Price and EPS Surprise
NOODLES & CO Price and EPS Surprise | NOODLES & CO Quote
We note that Noddles & Company is unlikely to post a beat in third-quarter 2016 due to the combination of its Zacks Rank #4 (Sell) and Earnings ESP of -33.33%. The Zacks Consensus Estimate for the quarter’s earnings is pegged at a loss of 3 cents.
Notably, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Higher costs and expenses have been hurting profits over the past few quarters. We do not expect any significant improvement in Q3. Nonetheless, various sales building initiatives undertaken by the company should somewhat boost the results (read more: Will Noodles & Company Disappoint in Q3 Earnings?).
Bojangles', Inc. registered a 17.39% positive earnings surprise in the previous quarter. In fact, the company surpassed the Zacks Consensus Estimate in each of the trailing for quarters, with an average beat of 19.41%.
BOJANGLES INC Price and EPS Surprise
BOJANGLES INC Price and EPS Surprise | BOJANGLES INC Quote
We note that the company is unlikely to post a beat in third-quarter 2016 due to the combination of its Zacks Rank #4 and Earnings ESP of -9.52%. The Zacks Consensus Estimate for the quarter’s bottom line is pegged at 21 cents.
Stay tuned! Check back on our full write-up on earnings releases of these stocks.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>