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Things You Need to Know Before Dean Foods' (DF) Q3 Earnings

Zacks Equity Research

Dean Foods Company DF is scheduled to release third-quarter 2019 results on Nov 12, before the opening bell. This manufacturer of dairy and other specialty food products reported wider-than-expected loss in the preceding quarter.

Q3 Estimates

The Zacks Consensus Estimate for third-quarter 2019 is pegged at a loss of 17 cents, which indicates a sharp improvement from a loss of 28 cents reported in the year-ago quarter. The consensus mark has remained unchanged over the past 30 days.

For revenues, the consensus mark is pegged at $1,902 million, suggesting marginal growth of 0.4% from the figure reported in the year-ago quarter.

Dean Foods Company Price, Consensus and EPS Surprise

Dean Foods Company Price, Consensus and EPS Surprise

Dean Foods Company price-consensus-eps-surprise-chart | Dean Foods Company Quote

Key Factors to Note

Dean Foods remains on track with its enterprise-wide cost productivity program to boost savings. This productivity program encompasses three major areas -- enhancement of supply-chain network, optimization of spending across all key categories and integration of the operating model along with minimizing G&A expenses.

However, Dean Foods grapples with lower volumes and loss of share in U.S. fluid milk. This has been exerting pressure on the company’s top line. Volumes in the fluid milk category have been declining at a high rate owing to consumers’ shift to other food and beverage options. Unfavorable pricing on private-label milk and input cost inflation in Class I raw milk remain headwinds. On the last earnings call, the company had projected an increase of 19% in Class I raw milk costs for the third quarter.

Nevertheless, Dean Foods has been undertaking pricing actions to address cost hurdles. Also, the company has been steadily diversifying its portfolio beyond pure milk products and focusing on foodservice and other beverages as well as organic space.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Dean Foods this time around. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Dean Foods carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combination

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

Foot Locker, Inc. FL has an Earnings ESP of +2.80% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Grocery Outlet Holding Corp. GO has an Earnings ESP of +2.70% and a Zacks Rank #2.

Ollie's Bargain Outlet Holdings, Inc. OLLI has an Earnings ESP of +3.45% and a Zacks Rank #3.

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Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
 
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Foot Locker, Inc. (FL) : Free Stock Analysis Report
 
Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report
 
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