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Can Product Innovation Aid Clarus (CLAR) in Q1 Earnings?

Zacks Equity Research

Clarus Corporation CLAR is scheduled to report first-quarter 2019 numbers on May 6, after the closing bell.In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 9.5%. However, it delivered average four-quarter positive earnings surprise of 253.9%.

What to Expect?

The Zacks Consensus Estimate for first-quarter earnings is pegged at 17 cents, indicating a 30.8% increase from the prior-year quarter’s reported figure. Over the past 60 days, the company’s earnings have witnessed upward revisions, reflecting analysts’ optimism surrounding the stock’s earnings potential. For revenues, the consensus mark stands at nearly $58.13 million, mirroring a 9.1% increase from the year-ago quarter number.

Let’s take a look at how the company’s top and bottom lines will shape up in the to-be-reported quarter.

Factors at Play

The company’s revenues in the first quarter are likely to have gained from sales momentum across brands, whereas earnings will benefit from a decline in total operating costs.

Clarus has been focusing on product innovation, which successfully attracted customers. This is likely to have driven the company’s top line in the to-be-reported quarter. Moreover, its apparel category is likely to drive sales results. High demand for apparels and outdoor products has been helping the company to witness revenue growth and the trend is likely to have continued in the first quarter as well.

Meanwhile, Clarus has been taking cost-efficiency efforts in order to drive profits. The company worked with vendors and renegotiated its costing in order to offset tariff impacts. This is likely to have driven earnings in the first quarter of 2019.

What Does the Zacks Model Unveil?

Our proven model does not show that Clarus is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Clarus has an Earnings ESP of 0.00% and a Zacks Rank #2, which make surprise prediction difficult.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Clarus Corporation Price and EPS Surprise

 

Clarus Corporation Price and EPS Surprise | Clarus Corporation Quote

Stocks to Consider

Here are a few stocks from the Consumer Discretionary sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in the first quarter:

JAKKS Pacific JAKK has an Earnings ESP of +17.86% and it currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wynn Resorts WYNN has an Earnings ESP of +2.98% and a Zacks Rank #3 at present.

Norwegian Cruise NCLH currently has an Earnings ESP of +0.53% and a Zacks Rank #3.

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Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
 
Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
 
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Clarus Corporation (CLAR) : Free Stock Analysis Report
 
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