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What to Expect from DineEquity (DIN) Stock in Q1 Earnings?
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CA-based restaurant operator DineEquity, Inc. (DIN - Free Report) is scheduled to report first-quarter 2017 numbers on May 2, before the market opens.
Last quarter, the company posted in-line earnings. In fact, it met/missed earnings estimates in three of the last four quarters, with an average miss of 0.23%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Comps at the International House of Pancakes (IHOP) brand have been positive for 13 consecutive quarters, apart from the last two reported quarters when it was flat. Notably, DineEquity’s focus on brand innovation as well as its menu improvement strategy and breakfast inspired food offered throughout the day is expected to bring back the trend of positive comps in the to-be-reported quarter. In the fourth quarter of 2016, the company completed the remodeling of all of its units under its Rise and Shine remodel program, which is also likely to drive incremental traffic.
However, DineEquity’s Applebee's Neighborhood Grill & Bar domestic system-wide comps weren’t encouraging throughout 2016. Efforts to reinvigorate the brand, as implemented throughout 2015 and 2016, did not resonate too well with the customers and sales remained pressurized. Nonetheless, we believe, renewed steps taken to revitalize the brand via increased focus on food and menu innovation, guest satisfaction and marketing should somewhat improve comps.
Meanwhile, an increase in expenses related to sales initiatives may dent the quarter’s profits. Incremental investments in marketing programs and promotional activity to combat competition are also expected to weigh on margins. Moreover, the continuing choppy sales environment in the overall restaurant space might limit revenue growth.
Earnings Whispers
Our proven model does not conclusively show an earnings beat for DineEquity 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, which is not the case here, as you will see below.
Zacks ESP: DineEquity has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.20 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DineEquity has a Zacks Rank #4 (Sell).
As it is we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks to Consider
Here are some companies in the broader Retail-Wholesale sector that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Jack in the Box, Inc. (JACK - Free Report) has an Earnings ESP of +4.40% and a Zacks Rank #2.
Wingstop, Inc. (WING - Free Report) has an Earnings ESP of +6.67% and a Zacks Rank #3.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>
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What to Expect from DineEquity (DIN) Stock in Q1 Earnings?
CA-based restaurant operator DineEquity, Inc. (DIN - Free Report) is scheduled to report first-quarter 2017 numbers on May 2, before the market opens.
Last quarter, the company posted in-line earnings. In fact, it met/missed earnings estimates in three of the last four quarters, with an average miss of 0.23%.
DineEquity, Inc Price and EPS Surprise
DineEquity, Inc Price and EPS Surprise | DineEquity, Inc Quote
Let’s see how things are shaping up for this announcement.
Factors at Play
Comps at the International House of Pancakes (IHOP) brand have been positive for 13 consecutive quarters, apart from the last two reported quarters when it was flat. Notably, DineEquity’s focus on brand innovation as well as its menu improvement strategy and breakfast inspired food offered throughout the day is expected to bring back the trend of positive comps in the to-be-reported quarter. In the fourth quarter of 2016, the company completed the remodeling of all of its units under its Rise and Shine remodel program, which is also likely to drive incremental traffic.
However, DineEquity’s Applebee's Neighborhood Grill & Bar domestic system-wide comps weren’t encouraging throughout 2016. Efforts to reinvigorate the brand, as implemented throughout 2015 and 2016, did not resonate too well with the customers and sales remained pressurized. Nonetheless, we believe, renewed steps taken to revitalize the brand via increased focus on food and menu innovation, guest satisfaction and marketing should somewhat improve comps.
Meanwhile, an increase in expenses related to sales initiatives may dent the quarter’s profits. Incremental investments in marketing programs and promotional activity to combat competition are also expected to weigh on margins. Moreover, the continuing choppy sales environment in the overall restaurant space might limit revenue growth.
Earnings Whispers
Our proven model does not conclusively show an earnings beat for DineEquity 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, which is not the case here, as you will see below.
Zacks ESP: DineEquity has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.20 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DineEquity has a Zacks Rank #4 (Sell).
As it is we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks to Consider
Here are some companies in the broader Retail-Wholesale sector that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Jack in the Box, Inc. (JACK - Free Report) has an Earnings ESP of +4.40% and a Zacks Rank #2.
Wingstop, Inc. (WING - Free Report) has an Earnings ESP of +6.67% and a Zacks Rank #3.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>