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Fogo de Chao (FOGO) to Report Q4 Earnings: What's in Store?
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Fogo de Chao, Inc. is set to report fourth-quarter and full-year 2016 results on Mar 14, after market closes. This will mark the leading Brazilian steakhouse’s seventh quarterly earnings release since it began trading on Nasdaq in Jun 2015.
Last quarter, the company posted a positive earnings surprise of 6.67%. However, it has missed or met estimates in three of the trailing four quarters, reaching the average surprise to a negative 3.51%.
Let’s see how things are shaping up for this announcement.
Fogo de Chao specializes in fire-roasting high-quality meats, using the centuries old Southern Brazilian cooking technique of churrasco. It offers several varieties of meat − beef, lamb, chicken, pork and seafood − to suit the palate of diners. The company’s unique South American style of cooking on an open flame has helped it gain enormous popularity.
The top line in the fourth quarter should benefit from initiatives like menu innovation, marketing through various channels, re-imaging of restaurants and unit expansion efforts. The company’s Saturday Extended Hours initiative has proven to be the primary traffic driver in the third quarter and the trend is likely to continue into the fourth quarter as well. Further, the use of social media to increase brand awareness and thereby drive traffic could also prove incremental to sales.
Meanwhile, higher labor costs and costs related to sales initiatives are likely to keep fourth-quarter profits under pressure. A challenging sales environment in the restaurant industry space is likely to hurt comps in the to-be-reported quarter. Also, foreign currency fluctuations may further hurt top-line growth.
Earnings Whispers
Our proven model does not conclusively show that Fogo de Chao is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The company has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 27 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Fogo de Chao has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, 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.
Stocks to Consider
Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
DSW Inc. has an Earnings ESP of +6.25% and a Zacks Rank #2.
Achaogen, Inc. has an Earnings ESP of +6.38% and a Zacks Rank #3.
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Fogo de Chao (FOGO) to Report Q4 Earnings: What's in Store?
Fogo de Chao, Inc. is set to report fourth-quarter and full-year 2016 results on Mar 14, after market closes. This will mark the leading Brazilian steakhouse’s seventh quarterly earnings release since it began trading on Nasdaq in Jun 2015.
Last quarter, the company posted a positive earnings surprise of 6.67%. However, it has missed or met estimates in three of the trailing four quarters, reaching the average surprise to a negative 3.51%.
Let’s see how things are shaping up for this announcement.
Fogo de Chao, Inc. Price and EPS Surprise
Fogo de Chao, Inc. Price and EPS Surprise | Fogo de Chao, Inc. Quote
Factors to Consider
Fogo de Chao specializes in fire-roasting high-quality meats, using the centuries old Southern Brazilian cooking technique of churrasco. It offers several varieties of meat − beef, lamb, chicken, pork and seafood − to suit the palate of diners. The company’s unique South American style of cooking on an open flame has helped it gain enormous popularity.
The top line in the fourth quarter should benefit from initiatives like menu innovation, marketing through various channels, re-imaging of restaurants and unit expansion efforts. The company’s Saturday Extended Hours initiative has proven to be the primary traffic driver in the third quarter and the trend is likely to continue into the fourth quarter as well. Further, the use of social media to increase brand awareness and thereby drive traffic could also prove incremental to sales.
Meanwhile, higher labor costs and costs related to sales initiatives are likely to keep fourth-quarter profits under pressure. A challenging sales environment in the restaurant industry space is likely to hurt comps in the to-be-reported quarter. Also, foreign currency fluctuations may further hurt top-line growth.
Earnings Whispers
Our proven model does not conclusively show that Fogo de Chao is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The company has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 27 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Fogo de Chao has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, 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.
Stocks to Consider
Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Turning Point Brands, Inc. (TPB - Free Report) has an Earnings ESP of +3.23% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
DSW Inc. has an Earnings ESP of +6.25% and a Zacks Rank #2.
Achaogen, Inc. has an Earnings ESP of +6.38% and a Zacks Rank #3.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>