Grocery Outlet (GO) to Report Q3 Earnings: What's in Store?
Grocery Outlet Holding Corp. GO is likely to register an increase in the top line when it reports third-quarter 2023 earnings on Nov 7 after market close. The Zacks Consensus Estimate for revenues stands at $1,007 million, indicating an increase of 9.7% from the prior-year reported figure. Over the past 30 days, the Zacks Consensus Estimate for third-quarter earnings per share has been stable at 27 cents.
Grocery Outlet, the extreme value retailer of quality, name-brand consumables and fresh products, has a trailing four-quarter earnings surprise of 14.3%, on average. In the last reported quarter, this Emeryville, CA-based company surpassed the Zacks Consensus Estimate by a margin of 23.1%.
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 6.5% during the quarter under review.
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.
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. Nonetheless, we foresee an operating margin expansion of 30 basis points, following a 70-basis point increase in the gross margin due to effective cost management and favorable supplier partnerships.
Grocery Outlet Holding Corp. Price, Consensus and EPS Surprise
Grocery Outlet Holding Corp. price-consensus-eps-surprise-chart | Grocery Outlet Holding Corp. Quote
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict 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 odds of an earnings beat. However, that’s not the case here.
Although Grocery Outlet currently has a Zacks Rank #3, its Earnings ESP of -0.41% makes the surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3 Stocks With the Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Costco COST currently has an Earnings ESP of +2.02% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.43 suggests a rise of 10.7% from the year-ago reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $57.69 billion, which calls for an increase of 6% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
Ross Stores ROST currently has an Earnings ESP of +2.40% and a Zacks Rank #2. The company is expected to register a bottom-line increase when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.21 suggests an increase of 21% from the year-ago quarter.
Ross Stores’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $4.83 billion, indicating an increase of 5.8% from the figure reported in the year-ago quarter. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Walmart WMT currently has an Earnings ESP of +1.02% and carries a Zacks Rank #2. The company’s bottom line is expected to remain flat year over year when it reports third-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share is currently pegged at $1.50.
Walmart’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $159.1 billion, which indicates a rise of 4.1% from the figure reported in the prior-year quarter. WMT has a trailing four-quarter earnings surprise of 11.6%, on average.
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Walmart Inc. (WMT) : Free Stock Analysis Report
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Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report
