Will Duluth Holdings (DLTH) Q4 Earnings & Sales Grow Y/Y?

Duluth Holdings Inc. (NASDAQ:DLTH) is slated to release fourth-quarter fiscal 2017 results on Mar 20. We note that the apparel retailer has reported an average negative earnings surprise of 7.7% over the trailing four quarters. Let’s see how things are placed ahead of the upcoming results.

What to Expect

The current Zacks Consensus Estimate for the quarter under review is pegged at 54 cents, which shows a 25.6% surge from 43 cents recorded in the year-ago period. However, the estimate has declined in the past seven days. Nevertheless, analysts polled by Zacks expect revenues of $209 million, up 19.4% from the year-ago quarter.

Factors Driving the Quarter

We remain encouraged about Duluth Holdings’ upcoming performance, given the strength at both its direct and retail businesses. In fact, improved sales at both these segments and all product categories helped the company achieve its 31st straight quarter of year-over-year increase in net sales when it reported third-quarter fiscal 2017 results. Notably, Duluth Holdings has been steadily expanding store base, driven by strong growth in direct and retail segments.

In this regard, the company successfully concluded its plans of opening 15 new stores in fiscal 2017, and the same are delivering impressive results. Thus, we expect Duluth Holdings fourth-quarter performance to benefit from store expansion initiatives. Apart from this, the company’s widening consumer base is also attributable to dedicated omni-channel expansion efforts and marketing strategies. Management remains committed toward undertaking constant investments in the omnichannel space — which plays a major role in enhancing brand awareness and growth.

However, retail store expansions have substantially raised the company’s selling, general and administrative (SG&A) expenses. SG&A expenses rose 39.4%, 26.1% and 26.7% year on year during the first, second and third quarters of fiscal 2017, respectively. Though this poses threat for the quarter to be reported, we expect strength in the retail model, favorable consumer spending and strategic growth initiatives to offset these hurdles and fuel top and bottom-line growth this quarter.

What the Zacks Model Unveils

However, our proven model doesn’t show that Duluth Holdings is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

While Duluth Holdings carries a Zacks Rank #2, its Earnings ESP of -0.37% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Guess? (NYSE:GES) has an Earnings ESP of +2.19% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Children’s Place (NASDAQ:PLCE) , a Zacks #3 Ranked stock, has an Earnings ESP of +0.40%.

Bed Bath & Beyond (NASDAQ:BBBY) , a #3 Ranked company, has an Earnings ESP of +2.55%.

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