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What to Expect From Summer Infant (SUMR) in Q3 Earnings

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What to Expect From Summer Infant (SUMR) in Q3 Earnings

Summer Infant (SUMR) is likely to gain from robust product development and marketing initiatives. However, second-quarter revenues were hit by liquidation of the Babies "R" Us business.

Summer Infant, Inc. SUMR is slated to release third-quarter 2018 results on Nov 1. This provider of branded juvenile health, safety and wellness products has delivered back to back bottom-line surprises in the last two quarters.

Let’s see what’s in store for the company this time around.

Summer Infant, Inc. Price and EPS Surprise

Summer Infant, Inc. Price and EPS Surprise | Summer Infant, Inc. Quote

Factors Impacting Summer Infant

Summer Infant is likely to gain from its robust brand portfolio, product development efforts and solid marketing initiatives. The company is focused on undertaking innovations and introducing unique, high-margin products under its network, which are expected to fuel revenues. Also, Summer Infant is committed toward strengthening online sales through its website and other modes of e-commerce. Notably, online shipments have been growing, keeping the company encouraged about making expansions in this arena.

However, we note that revenues in the second quarter declined year over year on account of reduced demand for monitors, and bankruptcy and liquidation of Toys "R" Us and Babies "R" Us. In fact, the liquidation of Babies "R" Us also had an adverse impact on the gross margin, which contracted year over year. Persistence of these factors is a hurdle for Summer Infant.  

Nonetheless, the company is focused on enhancing margins through brand management and product development plans. Also, Summer Infant’s cost-containment efforts like headcount reductions benefitted the company in the second quarter and is a tailwind for the coming periods. Further, the company continues to make efforts to efficiently streamline its business to boost profits and cash flow.

What to Expect?

The Zacks Consensus Estimate currently stands at 5 cents, which has remained stable in the past 30 days and also compares favorably with 2 cents per share reported in the year-ago period. Further, the consensus mark for revenues stands at $48 million, reflecting 11.6% growth from the year-ago quarter’s figure.

What the Zacks Model Unveils

Our proven model doesn’t show that Summer Infant is likely to beat bottom-line estimates this quarter.  For this to happen, the stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Though Summer Infant has a Zacks Rank #2, its Earnings ESP of 0.00%, makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post earnings beat:

Lululemon Athletica Inc. LULU, a Zacks #1 Ranked stock, has an Earnings ESP of +5.89%.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Ralph Lauren Corporation RL, a Zacks #2 Ranked company, has an Earnings ESP of +0.23%.

PVH Corp. PVH has an Earnings ESP of +0.46% and a Zacks Rank #2.

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