Restaurant Stocks' Oct 30 Earnings Roster: SBUX, YUM & More
Zacks Investment Research | Oct 28, 2019 10:18PM ET
The Restaurant industry third-quarter 2019 performance is likely to reflect the impact of lower foot traffic and high costs. According to tdn2k, restaurant industry’s same-store sales are likely to see a decline of 0.4%. The decrease can primarily be attributed to same-store traffic decline of 3.5%.
Further, sales-building efforts such as promotional activities and prudent pricing plans have been eroding margins. Apart from this, intense competition, high wage and food cost inflation are likely to get reflected on the industry participants’ third-quarter results. Moreover, most restaurateurs have been facing rising employee vacancies and are perpetually understaffed, a trend that is likely to have continued in the third quarter and consequently might impact overall performance.
The restaurant operators are continuously trying to strategize and maintain competitive edge by catering to changing preferences and trends. This has been evident from collaborations with delivery channels and digital platforms to drive incremental sales. These efforts are anticipated to get reflected in the third-quarter results.
Per the latest Earnings Preview, total earnings of the Zacks Retail/Wholesale sector are expected to be down 0.7%. However, revenues for the sector are anticipated to improve by 8.7%.
Let’s take a sneak peek at how the following restaurant operators are poised prior to their earnings release on Oct 30
According to the Zacks model, 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Starbucks Corporation (NASDAQ:SBUX) is scheduled to report fourth-quarter fiscal 2019 results on Oct 30, after the closing bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 8.3%.
Robust performance of Americas and China-Asia-Pacific (CAP) segments are likely to get reflected in the company’s fourth-quarter results. Further, the company’s fourth-quarter performance is likely to reflect new store additions, expansion in China and positive global comparable store sales.
Get The News You Want
The Zacks Consensus Estimate for revenues for Americas and CAP segments is anticipated to witness year-over-year growth of nearly 7% and 11% to $1,322 million and $4,563 million, respectively. Rapid unit growth, rising brand awareness and increased usage of the digital/mobile/loyalty platforms is likely to have benefited China and the Asia-Pacific region.
However, Channel Development, and Europe, Middle East and Africa (EMEA) segments’ dismal performance are likely to have weighed on the company’s fourth-quarter performance. Revenues from Channel Development and EMEA is likely to decline nearly 14% and 12% to $465 million to $235 million, respectively. (Read More: Solid Americas Segment to Aid Starbucks' Q4 Earnings)
The company has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Starbucks Corporation Price and EPS Surprise
YUM! Brands, Inc. (NYSE:YUM) is scheduled to report third-quarter 2019 results, before the opening bell. In the last reported quarter, the company’s earnings and revenues topped the respective Zacks Consensus Estimate by 5.7% and 2.7%, respectively.
YUM! Brands is anticipated to have suffered from a sales slump, which can be attributed to continued refranchising initiatives. The de-risking strategy of the company by reducing the ownership of restaurants and expanding franchise is anticipated to have affected revenues in the to-be-reported quarter.
Despite high cost of operations, franchising is likely to have driven YUM! Brands’ third-quarter 2019 earnings. We note that refranchising a large portion of the system reduces the company’s capital requirements, and facilitates earnings per share growth and ROE expansion. (Read more: YUM! Brands to Report Q3 Earnings: What's in Store?)
The company has a Zacks Rank #3 and an Earnings ESP of -3.56%.
Yum! Brands, Inc. Price and EPS Surprise
Wingstop Inc. (NASDAQ:WING) is scheduled to report third-quarter 2019 results, before the opening bell. In the last reported quarter, the company’s earnings were in line with the Zacks Consensus Estimate.
Wingstop’s third-quarter top line is likely to have benefited from various sales boosting strategies including robust delivery program, efficient marketing and promotions, and increased focus on franchising. Moreover, higher royalty revenues and franchise fees, and increase in advertising fees and related income are likely to get reflected in the company’s third-quarter results.
Moreover, its partnership with DoorDash is likely to have driven digital sales in the third quarter. However, increase in costs and higher net interest expenses are likely to have weighed on the bottom line in the third quarter. (Read more: Factors Setting the Tone for Wingstop's Q3 Earnings)
The company has a Zacks Rank #2 and an Earnings ESP of +5.62%.
Wingstop Inc. Price and EPS Surprise
Brinker International, Inc. (NYSE:EAT) is scheduled to report first-quarter fiscal 2020 results, before the opening bell. In the last reported quarter, the company’s earnings surpassed the consensus estimate by 0.7%.
The company’s first-quarter top line is likely to have benefited from traffic-building strategies and efforts to capture increased market share. Moreover, Brinker’s remodeling efforts have gained momentum leading to improvement in sales. Notably, the company continues to invest in its reimage program.
However, costs related to various sales-boosting initiatives, including advertising expenses, and commodity inflation and labor costs are likely to get reflected in the company’s first-quarter results.
The company has a Zacks Rank #2 and an Earnings ESP of 0.00%.
Brinker International, Inc. Price and EPS Surprise
Dine Brands Global, Inc. (NYSE:DIN) is slated to report third-quarter 2019 results, before the opening bell. In the previous quarter, the company reported an earnings miss of 7.6%. Notably, the company’s earnings beat the consensus estimate in two of the trailing four quarters, the average being 0.2%. The company has an Earnings ESP of -1.56% and a Zacks Rank #4.
DINE BRANDS GLOBAL, INC. Price and EPS Surprise
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Brinker International, Inc. (EAT): Free Stock Analysis Report
Wingstop Inc. (WING): Free Stock Analysis Report
Starbucks Corporation (SBUX): Free Stock Analysis Report
DINE BRANDS GLOBAL, INC. (DIN): Free Stock Analysis Report
Yum! Brands, Inc. (YUM): Free Stock Analysis Report
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.