For Immediate Release
Chicago, IL – November 8, 2017 – Zacks Equity Research highlights Etsy, Inc. (ETSY - Free Report) as the Bull of the Day and Chuy's Holdings, Inc. (CHUY - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Snap Inc. (SNAP - Free Report) , Zillow Group Inc. (ZG - Free Report) and Planet Fitness (PLNT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Etsy, Inc.is still on track with its turnaround to finish out its first profitable year as a public company. This Zacks Rank #1 (Strong Buy) recently beat the Zacks Consensus for the second straight quarter.
Etsy is the online market place where people make, sell and buy unique goods. Founded in 2005, it is headquartered in Brooklyn and went IPO in 2015.
A Big Third Quarter Earnings Beat
On Nov 6, Etsy reported third quarter results and beat the Zacks Consensus Estimate by 7 cents. Earnings were $0.12 compared to the consensus of just $0.05.
Revenue jumped 21.5% to $106.4 million driven by growth in both Markets and Seller Services. Markets rose 11.2% year-over-year due to growth in transaction fee revenue and, to a lesser extent, in listing fee revenue.
Seller Services revenue rose by 30.6% compared to the year ago quarter due to growth in Etsy Payments and Promoted Listings, and, to a lesser extent, Shipping Labels and Pattern.
Gross margin, however, fell 70 bps to 65.8% from 66.5% in the year ago quarter.
Gross Merchandise Sales (GMS) jumped 13.2% year-over-year, accelerating by 140 bps from the second quarter.
Active sellers rose 10.8% while active buyers increased 16.7% year-over-year.
Reiterated Full Year Guidance
Etsy's turnaround plan is proceeding. Following up this strong quarter, it reiterated full year guidance. GMS is expected to rise between 12-14% year-over-year. Revenue is expected in the range of 18-20%.
For the first three quarters of this year, GMS has averaged 13% while Revenue growth has been 19.6%.
Therefore, given the guidance, fourth quarter looks to be similar to the third quarter. The company said it was well positioned for the holiday season.
Shares are up 43% year-to-date thanks to management changes, including a new CEO, and the turnaround plan.
Bear of the Day:
Chuy's Holdings, Inc. took a hit from Hurricanes Harvey and Irma and higher labor costs in the third quarter. This Zacks Rank #5 (Strong Sell) is expected to see a 10% decline in earnings this year.
Chuy's is a Texas-based Tex-Mex restaurant chain. It operates 88 full-service restaurants across 19 states where each location offers a unique "unchained" look and feel.
An Earnings Miss in the Third Quarter
On Nov 2, Chuy's reported third quarter results which missed the Zacks Consensus by 3 cents. Earnings were $0.19 versus the consensus of $0.22.
It was the company's first earnings miss since 2014.
Revenue rose 7.7% to $92.2 million from $85.6 million in the year ago period, but was hit by Hurricanes Harvey and Irma to the tune of about $1.2 million. Chuy's is headquartered in Austin, Texas and has a lot of Texas locations.
Comparable restaurant sales, which is the key metric for the industry, fell 2.1% year-over-year. The hurricanes impacted that number negatively by about 90 basis points, so it still would have been in the negative, even without the hurricanes.
Comps fell due to a 3.7% decrease in the average weekly customers offset by a 1.6% increase in average check.
However, it did see some improvement in comps in September and they were "slightly positive to date through the month of October."
Total restaurant operating costs as a percentage of revenue rose to 84.1% from 81% in the prior year due to decreased sales from the hurricanes as well as higher labor costs due to hourly labor rate inflation, increases in repairs and maintenance and insurance costs and unfavorable commodity pricing.
Chuy's continued to expand, opening 2 new restaurants in the third quarter and expects to open up 2 new restaurants in the fourth quarter for a total of 11 new restaurants in 2017. It will continue to expand in 2018, with 8 to 12 sites on the docket.
Lowered Full Year Guidance
Like the entire restaurant industry, Chuy's cited the "challenging" environment in its earnings report.
It lowered its full year earnings guidance to the range of $0.96 to $1.00 from its previous range of $1.04 to $1.08.
As a result, 6 analysts cut estimates which lowered the Zacks Consensus to $0.97 from $1.04. That's at the low end of the company's new guidance range.
SNAP Falls on Q3 Miss; Zillow, Planet Fitness Beat and Raise
Snap Inc. shares fell off a table in the after-market following its disappointing quarterly top and bottom-line results. The smartphone app maker posted a one-cent beat to -14 cents per share, but revenues of $207.9 million was well below the $236.9 million analysts had been expecting. Daily active users (DAU) reached 178 million in the quarter, also lower than expectations of 182 million.
The company noted a 4% increase in daily snaps to 3.5 billion, and cited app redesign costs as part of the reason for the company's sales miss in the quarter. Shares had fallen as much as 21% in late trading, but have gained a few points back in the minutes since then. For more info on SNAP's earnings, click here.
Online real estate service Zillow Group Inc., on the other hand, beat both top and bottom-lines expectations in its most recently reported quarter: 19 cents per share beat the consensus estimate by 2 cents, while $282 million in sales topped the $277 million expected. Zillow also ratcheted up its top range of Q4 revenue guidance to $279 million, well ahead of the $274.5 million in the previous consensus. Shares have climbed 2.5% in late trading. For more info on Z's earnings, click here.
And Planet Fitness (PLNT - Free Report) impressed analysts with a big revenue beat as well as a 3-cent per share positive earnings surprise to 19 cents. Sales reached $97.5 million, well beyond the $93.7 million in the Zacks consensus. The Zacks Rank #2 (Buy)-rated stock also upped revenue guidance to $425-30 million, easily surpassing the $416 million we had been expecting.
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About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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