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Factors Setting The Tone For YETI Holdings' (YETI) Q2 Earnings

By Zacks Investment ResearchStock MarketsJul 29, 2019 08:47AM ET
www.investing.com/analysis/factors-setting-the-tone-for-yeti-holdings-yeti-q2-earnings-200446377
Factors Setting The Tone For YETI Holdings' (YETI) Q2 Earnings
By Zacks Investment Research   |  Jul 29, 2019 08:47AM ET
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YETI Holdings, Inc. (NYSE:YETI) is scheduled to report second-quarter 2019 results on Aug 1, before the market opens. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 166.7%. Also, its earnings outpaced expectations in each of the last three quarters, the average being 63.4%.

Q2 Expectations

The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at 30 cents. Over the past 30 days, its earnings estimates have remained unchanged. For quarterly revenues, the consensus mark is pinned at $224.2 million.

Let’s delve deeper to find out how the company’s top and bottom lines will shape up this earnings season.

Factors Likely to Aid Q2 Results

YETI Holdings’ high-quality product pipeline, strong brand presence and robust supply chain are likely to have driven second-quarter results. The company’s robust growth across categories and channel has led it to witness revenue growth of 15% in the first quarter of 2019. This upside trend is likely to have continued in the second quarter as well.

Meanwhile, in the first quarter of 2019, YETI Holding’s gross margin expanded 700 basis points (bps) and adjusted operating margin was up 370 bps year over year. We believe that cost improvements across portfolios, favorable shift in channel mix and no inventory charges are likely to have driven earnings in the second quarter of 2019.

What Does the Zacks Model Say?

Our proven model does not conclusively predict that YETI Holdings is likely to beat earnings estimates in the second quarter. This is because a stock needs to have — 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.

YETI Holdings has an Earnings ESP of -1.24% and a Zacks Rank #3 at present, which make surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Meanwhile, 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.

YETI Holdings, Inc. Price and EPS Surprise

Stocks With Favorable Combinations

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 second quarter:

SeaWorld (NYSE:SEAS) presently has an Earnings ESP of +11.01% and a Zacks Rank #2. The company is scheduled to report quarterly numbers on Aug 6.

Callaway Golf (NYSE:ELY) currently sports a Zacks Rank #1 and is supposed to report quarterly results on Aug 8. The company’s Earnings ESP is +2.97%.

Wynn Resorts (NASDAQ:WYNN) has a Zacks Rank #3 and an Earnings ESP of +2.65% at present.

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Wynn Resorts, Limited (WYNN): Free Stock Analysis Report

Callaway Golf Company (ELY): Free Stock Analysis Report

SeaWorld Entertainment, Inc. (SEAS): Free Stock Analysis Report

YETI Holdings, Inc. (YETI): Free Stock Analysis Report

Original post

Zacks Investment Research
Factors Setting The Tone For YETI Holdings' (YETI) Q2 Earnings
 
Factors Setting The Tone For YETI Holdings' (YETI) Q2 Earnings

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