Grocery Outlet (GO) Lined Up for Q2 Earnings: Factors to Note
Grocery Outlet Holding Corp. GO is likely to register an increase in the top line when it reports second-quarter 2023 earnings on Aug 8 after market close. The Zacks Consensus Estimate for revenues stands at $974.9 million, indicating an increase of 8.6% from the prior-year reported figure.
The bottom line of this extreme value retailer of quality, name-brand consumables and fresh products is expected to have decreased year over year. Over the past 30 days, the Zacks Consensus Estimate for second-quarter earnings per share has been stable at 26 cents, suggesting a decline of 10.3% from the year-ago quarter.
Grocery Outlet has a trailing four-quarter earnings surprise of 13.7%, on average. In the last reported quarter, this Emeryville, CA-based company surpassed the Zacks Consensus Estimate by a margin of 17.4%.
Factors to Note
Grocery Outlet’s flexible sourcing and distribution business model, which helps it offer products at an exceptional value, and excellent service from independent operators are among the key factors driving revenues.
The company’s opportunistic purchasing strategy, marketing efforts, store-growth endeavors and e-commerce initiatives to deepen the customer reach also appear encouraging. Cumulatively, these are likely to have favorably impacted the to-be-reported quarter's top line. We expect same-store sales to increase 5% during the quarter under review.
Grocery Outlet Holding Corp. Price, Consensus and EPS Surprise
Grocery Outlet Holding Corp. price-consensus-eps-surprise-chart | Grocery Outlet Holding Corp. Quote
Grocery Outlet has been offering the same-day delivery of everyday essentials and staples from nearly all its stores in collaboration with Instacart. We believe that Grocery Outlet’s compelling value proposition continues to attract bargain hunters, encourage customers to revisit stores and increase basket sizes. On its last earnings call, management guided second-quarter 2023 comparable store sales growth of 5% compared with the 11.2% witnessed in the prior-year quarter.
While the aforementioned factors raise optimism, we cannot ignore the margins. Any deleverage in SG&A expenses due to higher store-related expenses and store occupancy costs may weigh on margins. We foresee a 20-basis point deleverage in the operating margin, following an estimated 40-basis point contraction in the gross margin.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Grocery Outlet this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Grocery Outlet has an Earnings ESP of +4.29% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3 More Stocks With the Favorable Combination
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Arhaus ARHS currently has an Earnings ESP of +7.69% and a Zacks Rank #2. The company is expected to register a bottom-line decline when it reports second-quarter 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of 26 cents suggests a decrease of 7.1% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arhaus’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $325.7 million, indicating an increase of 6.3% from the figure reported in the year-ago quarter. ARHS has a trailing four-quarter earnings surprise of 82.4%, on average.
Casey's General Stores CASY currently has an Earnings ESP of +1.03% and carries a Zacks Rank #2. The company is likely to register a bottom-line decrease when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.39 suggests a decline of 17.1% from the year-ago quarter.
Casey's General Stores’ top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.85 billion, which indicates a drop of 13.5% from the figure reported in the prior-year quarter. CASY has a trailing four-quarter earnings surprise of 7.5%, on average.
Costco COST currently has an Earnings ESP of +2.07% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.72 suggests a rise of 12.4% from the year-ago reported number.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $78.86 billion, which calls for an increase of 9.4% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 1.8%, on average.
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Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report
Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report
Arhaus, Inc. (ARHS) : Free Stock Analysis Report
