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Hudson (HUD) Earnings to Gain in Q4 Despite Cost Concerns

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Hudson Ltd. is scheduled to report fourth-quarter 2018 earnings on Mar 14, 2019, before the market opens. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 36.7%. Notably, its earnings surpassed the consensus estimate in all of the trailing four quarters, the average being 63.6%.

Q4 Expectations

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 15 cents, higher than 13 cents reported in the year-ago quarter. In the past 30 days, earnings estimates have witnessed a downward revision of 6.3%. In third-quarter 2018, it witnessed earnings growth of 127.8% on a year-over-year basis. Let’s delve deeper to find out how the company’s top and bottom lines will shape up this earnings season.

Factors at Play

Hudson results in fourth-quarter 2018 are likely to be driven by robust turnover, which includes net sales and advertising income. In the last reported quarter, turnover increased 6% year over year to $526.6 million. Further, store openings are likely to drive the company’s results. It expended the footprint at Philadelphia International Airport, Dallas/Fort Worth International Airport and in Nashville as well as Atlanta.

However, rise in costs remains a concern. In third-quarter 2018, selling expenses increased 7.2% to $121.7 million, whereas personnel expenses increased10.1% to $105.4 million.

Hudson Ltd. Price, Consensus and EPS Surprise

What Does the Zacks Model Unveil?

Our proven model does not conclusively predict that Hudson is likely to beat earnings estimates in the fourth quarter. This 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.

Currently, Hudson has an Earnings ESP of -13.33% and a Zacks Rank #3, which make the surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combinations

Here are a few stocks from the Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat:

Carnival Corporation (CCL - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #3.

PVH Corp. (PVH - Free Report) has an Earnings ESP of +1.14% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Adidas AG (ADDYY - Free Report) has an Earnings ESP of +13.04% and a Zacks Rank #3.

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