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What to Expect from Fogo de Chao (FOGO) in Q1 Earnings?
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Fogo de Chao, Inc. is set to report its first-quarter 2017 results on May 8, after the market closes. This will mark the leading Brazilian steakhouse’s eighth quarterly earnings release since it began trading on NASDAQ in Jun 2015.
Last quarter, the company posted a positive earnings surprise of 3.70%. However, it lagged estimates in two of the trailing four quarters, bringing the average negative surprise to 2.58%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Fogo de Chao specializes in fire-roasting high-quality meats, using the centuries old Southern Brazilian cooking technique of churrasco. It also offers several varieties of meat − beef, lamb, chicken, pork and seafood − to suit the palate of diners. In fact, the company’s unique South American style of cooking on an open flame has helped it gain enormous popularity.
The top line in the first quarter should benefit from initiatives like menu innovation, marketing through various channels, re-imaging of restaurants and unit expansion efforts. In fact, the company expects its Brazil remodel program to provide a lift to revenue of approximately 2-3% on average. Meanwhile, the use of social media to increase brand awareness and thereby drive traffic, could also prove incremental to sales. Further, the company’s recent roll out of its most significant bar menu enhancements in the U.S. are expected to bolster revenue growth in the quarter too.
Meanwhile, higher labor costs and costs related to sales initiatives are likely to keep first-quarter profits under pressure. In addition, a challenging sales environment in the U.S. restaurants space is likely to hurt comps in the to-be-reported quarter. Also, foreign currency fluctuations may further mar top-line growth.
Earnings Whispers
Our proven model does not conclusively show earnings beat for Fogo de Chao 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. That is not the case here, as you will see below.
Zacks ESP: Fogo de Chao has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 18 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 carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Note that 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 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 #2.
J.C. Penney Company, Inc. has an Earnings ESP of +100.00% and a Zacks Rank #3.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
What to Expect from Fogo de Chao (FOGO) in Q1 Earnings?
Fogo de Chao, Inc. is set to report its first-quarter 2017 results on May 8, after the market closes. This will mark the leading Brazilian steakhouse’s eighth quarterly earnings release since it began trading on NASDAQ in Jun 2015.
Last quarter, the company posted a positive earnings surprise of 3.70%. However, it lagged estimates in two of the trailing four quarters, bringing the average negative surprise to 2.58%.
Fogo de Chao, Inc. Price and EPS Surprise
Fogo de Chao, Inc. Price and EPS Surprise | Fogo de Chao, Inc. Quote
Let’s see how things are shaping up for this announcement.
Factors to Consider
Fogo de Chao specializes in fire-roasting high-quality meats, using the centuries old Southern Brazilian cooking technique of churrasco. It also offers several varieties of meat − beef, lamb, chicken, pork and seafood − to suit the palate of diners. In fact, the company’s unique South American style of cooking on an open flame has helped it gain enormous popularity.
The top line in the first quarter should benefit from initiatives like menu innovation, marketing through various channels, re-imaging of restaurants and unit expansion efforts. In fact, the company expects its Brazil remodel program to provide a lift to revenue of approximately 2-3% on average. Meanwhile, the use of social media to increase brand awareness and thereby drive traffic, could also prove incremental to sales. Further, the company’s recent roll out of its most significant bar menu enhancements in the U.S. are expected to bolster revenue growth in the quarter too.
Meanwhile, higher labor costs and costs related to sales initiatives are likely to keep first-quarter profits under pressure. In addition, a challenging sales environment in the U.S. restaurants space is likely to hurt comps in the to-be-reported quarter. Also, foreign currency fluctuations may further mar top-line growth.
Earnings Whispers
Our proven model does not conclusively show earnings beat for Fogo de Chao 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. That is not the case here, as you will see below.
Zacks ESP: Fogo de Chao has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 18 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 carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Note that 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 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 #2.
Jack in the Box, Inc. (JACK - Free Report) has an Earnings ESP of +4.40% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
J.C. Penney Company, Inc. has an Earnings ESP of +100.00% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>