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What's in the Cards for GrowGeneration's (GRWG) Q3 Earnings?
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GrowGeneration Corp. (GRWG - Free Report) is scheduled to report third-quarter 2021 results on Nov 11, before the market opens.
Q3 Estimates
The Zacks Consensus Estimate for third-quarter total sales is pegged at $115.3 million, suggesting growth of 110% from the prior-year quarter. The consensus mark for earnings per share currently stands at 9 cents, which indicates an improvement of 50% from the prior-year quarter. Earnings estimates have gone down 18% over the past 30 days.
Q2 Results
GrowGeneration reported record second-quarter 2021 adjusted earnings per share of 11 cents, which marked an improvement of 83% from 6 cents per share in the prior-year quarter. The company generated record revenues of $126 million, reflecting a whopping year-over-year growth of 190%. While the bottom line missed the Zacks Consensus Estimate, the top line beat the same.
The company beat earnings estimates in one of the trailing four quarters, missed twice and came in line in the remaining one. It has a trailing four-quarter negative earnings surprise of 3.9%, on average.
Factors to Note
GrowGeneration’s online sales have been surging, and the trend is expected to have continued in the third quarter as customers continue to stay home. In the second quarter, the company had launched GrowGeneration.com, which is a one-stop e-commerce destination for commercial and craft growers, with a solid inventory of over 10,000 products, ranging from organic nutrients and soils to advanced lighting technology. This newly redesigned e-commerce platform now includes the option to Buy Online Pickup in Store (BOPIS). Visitors to its website have been trending more than 150,000 per month.
Sales to commercial customers, including expert growers and cultivators, have been rising given the company’s continued focus on increasing commercial revenues by adding new customer accounts. Walk-in transactions at stores have been averaging around 100,000 walk-ins per month. In addition to store openings, the company has been active on the acquisition front this year, expanding its geographic presence and private label products.
All these factors might have favored the company’s performance in the to-be-reported quarter.
Meanwhile, higher store operating costs due to the opening of new stores and acquired stores, and rising salary expense on account of the increase in corporate staff to support expanding operations are likely to have weighed on the to-be-reported quarter’s performance. The company might have faced supply chain interruptions and higher costs through the quarter. However, its focus on margin expansion strategies that include furthering the deployment of more private-label products and driving more efficiency at the purchasing level are expected to have offset these impacts. This, in turn, may have benefited the third-quarter performance.
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 -18.44%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #4 (Sell).
Price Performance
Image Source: Zacks Investment Research
Shares of the company have gained 3.2% in the past year compared with the industry’s rally of 49.1%.
Stocks Poised to Beat Earnings Estimates
Here are some stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
Image: Bigstock
What's in the Cards for GrowGeneration's (GRWG) Q3 Earnings?
GrowGeneration Corp. (GRWG - Free Report) is scheduled to report third-quarter 2021 results on Nov 11, before the market opens.
Q3 Estimates
The Zacks Consensus Estimate for third-quarter total sales is pegged at $115.3 million, suggesting growth of 110% from the prior-year quarter. The consensus mark for earnings per share currently stands at 9 cents, which indicates an improvement of 50% from the prior-year quarter. Earnings estimates have gone down 18% over the past 30 days.
Q2 Results
GrowGeneration reported record second-quarter 2021 adjusted earnings per share of 11 cents, which marked an improvement of 83% from 6 cents per share in the prior-year quarter. The company generated record revenues of $126 million, reflecting a whopping year-over-year growth of 190%. While the bottom line missed the Zacks Consensus Estimate, the top line beat the same.
The company beat earnings estimates in one of the trailing four quarters, missed twice and came in line in the remaining one. It has a trailing four-quarter negative earnings surprise of 3.9%, on average.
Factors to Note
GrowGeneration’s online sales have been surging, and the trend is expected to have continued in the third quarter as customers continue to stay home. In the second quarter, the company had launched GrowGeneration.com, which is a one-stop e-commerce destination for commercial and craft growers, with a solid inventory of over 10,000 products, ranging from organic nutrients and soils to advanced lighting technology. This newly redesigned e-commerce platform now includes the option to Buy Online Pickup in Store (BOPIS). Visitors to its website have been trending more than 150,000 per month.
Sales to commercial customers, including expert growers and cultivators, have been rising given the company’s continued focus on increasing commercial revenues by adding new customer accounts. Walk-in transactions at stores have been averaging around 100,000 walk-ins per month. In addition to store openings, the company has been active on the acquisition front this year, expanding its geographic presence and private label products.
All these factors might have favored the company’s performance in the to-be-reported quarter.
Meanwhile, higher store operating costs due to the opening of new stores and acquired stores, and rising salary expense on account of the increase in corporate staff to support expanding operations are likely to have weighed on the to-be-reported quarter’s performance. The company might have faced supply chain interruptions and higher costs through the quarter. However, its focus on margin expansion strategies that include furthering the deployment of more private-label products and driving more efficiency at the purchasing level are expected to have offset these impacts. This, in turn, may have benefited the third-quarter performance.
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 -18.44%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #4 (Sell).
Price Performance
Shares of the company have gained 3.2% in the past year compared with the industry’s rally of 49.1%.
Stocks Poised to Beat Earnings Estimates
Here are some stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
Central Garden & Pet Company (CENT - Free Report) has an Earnings ESP of +22.22% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Jabil Inc. (JBL - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank #2.
Tetra Tech, Inc. (TTEK - Free Report) has a Zacks Rank #2 and an Earnings ESP of +0.50%, at present.