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The Zacks Consensus Estimate for fourth-quarter total sales is pegged at $89.2 million, suggesting growth of 44% from the prior-year quarter’s reported figure. The consensus mark for the bottom line is currently pegged at a loss of 8 cents per share. The company reported earnings per share of 3 cents in the fourth quarter of 2020. The estimate has been unchanged over the past 30 days.
GrowGeneration’s third-quarter 2021 adjusted earnings per share of 7 cents marked a 17% improvement from the prior-year quarter. The company generated record revenues of $116 million, reflecting whopping year-over-year growth of 111%. While the top line missed the Zacks Consensus Estimate, the bottom line beat the same. The company has a trailing four-quarter negative earnings surprise of 9.4%, on average.
Factors to Note
Last month, GrowGeneration revised its financial guidance for the fourth quarter of 2021. The company suffered unexpected pressures in fourth-quarter 2021 due to the slowdown in the hydroponics market. An over-supply of cannabis in California and slower-than-initially-anticipated licensing in the newly legalized state has been weighing on the industry currently. Supply-chain disruptions also remained headwinds throughout the quarter.
Nevertheless, GRWG provided revenue guidance between $88 million and $90 million for the to-be-reported quarter. The company reported sales of $62 million in the last year quarter.
GrowGeneration, however, anticipated a decline in same-store sales of 12.3% for the fourth quarter of 2021, whereas it reported an increase of 58% in same-store sales in the prior-year quarter. The sales performance combined with one-time expenses is expected to lead to a loss between $2 million and $4 million in EBITDA on an adjusted basis. Notably, adjusted EBITDA was $5.6 million for the fourth quarter of 2020.
Meanwhile, higher store operating costs due to the opening of stores and acquired stores, and rising salary expenses on account of the increase in corporate staff to support expanding operations are likely to have weighed on the company’s margins in the to-be-reported quarter.
What Our Model Unveils
Our proven Zacks model does not predict a beat for GrowGeneration this earnings season. 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 is not the case here, as you will see below.
Earnings ESP: GrowGeneration has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: GRWG currently carries a Zacks Rank #4 (Sell).
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Shares of the company have plunged 84.7% in the past year against the industry’s growth of 11.9%.
Stocks Poised to Beat Earnings Estimates
Here are some companies worth considering as our model shows that these have the right combination of elements to beat on earnings this season:
Foot Locker FL currently has an Earnings ESP of +3.51% and a Zacks Rank of 3. FL is scheduled to report fourth-quarter fiscal 2021 results on Feb 24, after the closing bell. The Zacks Consensus Estimate for the company’s quarterly revenues is pegged at $2.31 billion, indicating 5.7% growth from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Foot Locker’s bottom line has moved up 1% over the past 30 days and is pegged at $1.45 per share. The consensus mark for earnings suggests a decrease of 6.4% from the year-ago reported figure. FL has a trailing four-quarter earnings surprise of 58.1%, on average.
Dollar Tree DLTR currently has an Earnings ESP of +3.05% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar Tree is scheduled to report fourth-quarter fiscal 2021 numbers on Mar 2, before market open. The Zacks Consensus Estimate for the company’s quarterly revenues is pegged at $7.13 billion, which indicates 5.3% growth from the prior-year quarter’s reported number.
The Zacks Consensus Estimate for Dollar Tree’s earnings per share for the fourth quarter is pegged at $1.79, which suggests a fall of 16% from the year-ago quarter’s reported figure. The consensus estimate has moved up 1% over the past 30 days. DLTR has a trailing four-quarter earnings surprise of 8.8%, on average.
Costco Wholesale COST currently has an Earnings ESP of +0.75% and a Zacks Rank of 3. It is scheduled to report second-quarter fiscal 2022 numbers on Mar 3, after market close. The Zacks Consensus Estimate for its quarterly revenues is pegged at $51 billion, which suggests growth of 14% from the prior-year reported figure.
The Zacks Consensus Estimate for Costco’s quarterly earnings per share of $2.67 suggests 25% growth from the year-ago period’s reported number. The consensus estimate has been revised upward by 1% over the past 30 days. COST has a trailing four-quarter positive earnings surprise of 8.3%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Dollar Tree, Inc. (DLTR): Free Stock Analysis Report
Costco Wholesale Corporation (COST): Free Stock Analysis Report
Foot Locker, Inc. (FL): Free Stock Analysis Report
GrowGeneration Corp. (GRWG): Free Stock Analysis Report
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