Beacon Roofing Supply, Inc. (BECN Quick QuoteBECN - Free Report) is slated to report fiscal fourth-quarter 2021 results on Nov 18, after market close.

In the last reported quarter, the company came up with better-than-expected earnings and revenues, which topped the Zacks Consensus Estimate by 21.4% and 2.1%, respectively. On a year-over-year basis, its top and bottom lines rose 20.8% and 71%, respectively.

Beacon beat the consensus mark in the trailing five quarters.

Earnings & Revenue Expectation

The Zacks Consensus Estimate for Beacon’s fiscal fourth-quarter revenues is pegged at $1.9 billion, indicating a decrease of 6.1% from the year-ago reported figure. The consensus estimate for earnings is pegged at $1.50 per share, implying growth of 15.4% on a year-over-year basis.

Factors to Note

Beacon — a distributor of residential and commercial roofing materials as well as complementary building products — is likely to have registered year-over-year lower revenues in the fiscal fourth quarter. About 70-75% of overall sales and more than 80% of the roofing business is R&R based, largely non-discretionary, and is vulnerable to COVID-induced economic disruptions. Also, it has been witnessing cost increases for a number of product categories, owing to which it announced an early September price increase. The significant increase in prices may have hampered the demand for its products.

Nonetheless, the company expects total sales growth in the mid-single-digit range for the fiscal fourth quarter. Yet, it believes demand for the to-be-reported quarter to be below the prior-year quarter that included the impact of wind storms and hurricane-related demand.

That said, it has been benefiting from disciplined cost management and productivity initiatives. Further, strategic moves undertaken to strengthen the balance sheet, enhance financial flexibility and sharpen focus on the core exteriors business are commendable.

The company anticipates gross margin to increase 180 basis points year over year to 26.9%. Also, it expects fiscal fourth-quarter adjusted EBITDA between $190 million and $205 million, and full-year fiscal 2021 adjusted EBITDA within $635-$650 million.

The Zacks Consensus Estimate for Residential roofing revenues of $1.01 billion indicates 4.2% growth from the year-ago period. The same for Non-residential roofing products’ net sales is $473 million, suggesting 6.1% growth from $446 million reported a year ago. The consensus mark for Complementary building products’ existing market net sales is $518 million, indicating a 14.1% year-over-year fall.

What Our Model Indicates

Our proven model predicts an earnings beat for Beacon this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Its Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With a Favorable Combination

Here are a few companies from the Zacks Retail-Wholesale sector that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat for the to-be-reported quarter:

Home Depot (HD Quick QuoteHD - Free Report) currently has an Earnings ESP of +1.89% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for quarterly earnings has moved up 2.1% in the past seven days to $3.40 per share, suggesting growth of 6.9% from the year-ago reported number.

Home Depot’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $34.9 billion, which indicates an improvement of 4.1% from the prior-year quarter. HD has a trailing four-quarter earnings surprise of 9.2%, on average.

Lowe's Companies (LOW Quick QuoteLOW - Free Report) currently has an Earnings ESP of +5.71% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for quarterly earnings has moved up 2.2% in the past seven days to $2.32 per share, suggesting a 17.2% increase from the year-ago reported number.

Yet, Lowe’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $21.94 billion, which suggests a decline of 1.6% from the prior-year quarter. LOW has a trailing four-quarter earnings surprise of 10.1%, on average.

Macy's (M Quick QuoteM - Free Report) currently has an Earnings ESP of +9.77% and a Zacks Rank #2. The company is likely to register bottom-line improvement when it reports third-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for quarterly earnings has moved up 19.2% in the past seven days to 31 cents per share, suggesting a substantial improvement from a loss of 19 cents reported in the year-ago quarter.

Macy's top line is also expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.29 billion, which indicates an improvement of 32.6% from the figure reported in the prior-year quarter. M has a trailing four-quarter earnings surprise of 269.8%, on average.