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What to Expect when Dollar General (DG) Reports Q1 Earnings?
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Dollar General Corporation (DG - Free Report) is scheduled to report first-quarter fiscal 2017 results on Jun 1. In fourth-quarter fiscal 2016, the company recorded a positive earnings surprise of 5.7% following negative earnings surprises of 3.3% and 0.9% in the third and second quarters, respectively. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter is 99 cents, reflecting a year-over-year decline of roughly 4%. Analysts polled by Zacks anticipate revenues of $5,598 million, up over 6% from the year-ago quarter. Well the obvious question that comes to mind, will Dollar General be able to post positive earnings surprise in the first quarter. Let’s take a look at factors defining the quarter.
Factors at Play
Of late, Dollar General has been bearing the brunt of price deflation and the reduction in SNAP benefits that are weighing on comparable-store sales performance. In the final quarter of fiscal 2016, Dollar General informed that price deflation and the reduction in SNAP benefits adversely impacted comparable-store sales for fiscal 2016 by about 115 to 125 basis points. The current administration is suggesting on reducing food stamps program. Cut in SNAP benefit will hamper Dollar General performance as people with low income will have less money to spend and could restrict their spending to low margin products.
Nevertheless, we believe that the company’s commitment toward better price management, cost containment, private label offering, effective inventory management, merchandise and operational initiatives should drive sales and margin trends. Moreover, in order to increase traffic, Dollar General is focusing on both consumables and discretionary items.
Dollar General Corporation Price, Consensus and EPS Surprise
Well our proven model does not conclusively show that Dollar General is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar General has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 99 cents. Moreover, the company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks with Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Expedia, Inc. (EXPE - Free Report) currently has an Earnings ESP of +3.28% and a Zacks Rank #3.
Lithia Motors, Inc. (LAD - Free Report) currently has an Earnings ESP of +0.91% and a Zacks Rank #3.
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What to Expect when Dollar General (DG) Reports Q1 Earnings?
Dollar General Corporation (DG - Free Report) is scheduled to report first-quarter fiscal 2017 results on Jun 1. In fourth-quarter fiscal 2016, the company recorded a positive earnings surprise of 5.7% following negative earnings surprises of 3.3% and 0.9% in the third and second quarters, respectively. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter is 99 cents, reflecting a year-over-year decline of roughly 4%. Analysts polled by Zacks anticipate revenues of $5,598 million, up over 6% from the year-ago quarter. Well the obvious question that comes to mind, will Dollar General be able to post positive earnings surprise in the first quarter. Let’s take a look at factors defining the quarter.
Factors at Play
Of late, Dollar General has been bearing the brunt of price deflation and the reduction in SNAP benefits that are weighing on comparable-store sales performance. In the final quarter of fiscal 2016, Dollar General informed that price deflation and the reduction in SNAP benefits adversely impacted comparable-store sales for fiscal 2016 by about 115 to 125 basis points. The current administration is suggesting on reducing food stamps program. Cut in SNAP benefit will hamper Dollar General performance as people with low income will have less money to spend and could restrict their spending to low margin products.
Nevertheless, we believe that the company’s commitment toward better price management, cost containment, private label offering, effective inventory management, merchandise and operational initiatives should drive sales and margin trends. Moreover, in order to increase traffic, Dollar General is focusing on both consumables and discretionary items.
Dollar General Corporation Price, Consensus and EPS Surprise
Dollar General Corporation Price, Consensus and EPS Surprise | Dollar General Corporation Quote
What the Zacks Model Unveils?
Well our proven model does not conclusively show that Dollar General is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar General has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 99 cents. Moreover, the company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks with Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Fastenal Company (FAST - Free Report) currently has an Earnings ESP of +4.08% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Expedia, Inc. (EXPE - Free Report) currently has an Earnings ESP of +3.28% and a Zacks Rank #3.
Lithia Motors, Inc. (LAD - Free Report) currently has an Earnings ESP of +0.91% and a Zacks Rank #3.
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 >>