Guidewire Gears up for Q2 Earnings: Here's What Investors Should Know

Victoria's Secret & Co. VSCO is slated to release fourth-quarter 2024 results on March 5, after the closing bell.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 21.9%. VSCO surpassed earnings estimates in the trailing four quarters, the average beat being 10.3%, as shown in the chart below.

VSCO’s Q4 Earnings Estimate Revisions

The Zacks Consensus Estimate for fourth-quarter adjusted earnings is pegged at $2.30 per share, suggesting a 10.9% year-over-year decline. In the past seven days, earnings estimates for the quarter have been revised downward by 1 cent per share. For revenues, the consensus mark is pegged at $2.08 billion, suggesting a 0.1% year-over-year slip.

What the Zacks Model Unveils for VSCO

Our proven model predicts an earnings beat for Victoria's Secret this time around. 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.

VSCO’s Earnings ESP: Victoria's Secret currently has an Earnings ESP of +0.01%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank of Victoria's Secret: The company carries a Zacks Rank #3 at present.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Influencing VSCO’s Q4 Performance

Victoria's Secret’s fourth-quarter performance is likely to have been aided by strong brand momentum, digital expansion and marketing initiatives. The company has likely benefited from strong sales momentum in North America, which carried over from the third quarter into the key holiday months of November and December. The consensus estimate for North America sales is pinned at $1.19 billion, implying 3% year-over-year growth.

On Jan. 29, the company said that it was pleased with its holiday results. It revealed that it experienced a notable increase in foot traffic to its physical stores and higher engagement on its digital platforms. This uptick is likely linked to an enhanced product assortment and the positive brand exposure generated by the Victoria’s Secret Fashion Show in late October.

VSCO is likely to have benefited from robust growth in the beauty segment, and strong performances in the sports bra segment and the PINK apparel category. The enhanced performance of the company’s customer loyalty program bodes well. However, softness in the intimate apparel market, as well as uncertain economic conditions, is likely to have negatively impacted the top line.

Conversely, the company’s bottom line in the quarter to be reported is likely to have been hurt by increased transportation costs and higher incentive compensation expenses.

Stock Price Performance & Valuation of VSCO

The VSCO stock has gained 2% over the past year, underperforming its industry. However, the company has outperformed other industry players like American Eagle Outfitters’ AEO 45.7% decline, The Buckle, Inc.’s BKE 2.8% dip and Capri Holdings’ CPRI 52% decrease.

VSCO Stock Price Performance

Gap's 4Q results --expected on Thursday, will likely not move sell-side FY EPS estimates much, UBS analysts say in a research note. The apparel retailer has started off the year worse than UBS appreciated, which could result in a 1Q outlook miss. However, its FY25 outlook could also make Wall Street EPS estimates and the stock rise, the analysts say. "We lack conviction around which scenario will play out and thus see a balanced upside/downside skew around the event," the analysts add. Shares fall 2.8% to $21.98. (sabela.ojea@wsj.com; @sabelaojeaguix)

Tecnoglass Inc. TGLS reported fourth-quarter 2024 results, with the top and bottom lines increasing year over year. Revenues missed the Zacks Consensus Estimate, while earnings beat the same.

Management attributed the strong performance in 2024 to market share gains in single-family residential, robust multi-family/commercial demand and the efficiencies of Tecnoglass’ vertically integrated business model. Investments in automation and capacity enhancements drove operational improvements, allowing the company to maintain strong margins and generate record cash flow despite early-year currency headwinds.

TGLS’ Q4 Performance: Key Metrics & Insights

Tecnoglass’ adjusted earnings were $1.05 per share, an improvement from 80 cent in the same quarter last year. The metric beat the Zacks Consensus Estimate of $1.01 per share.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Tecnoglass Inc. Price, Consensus and EPS Surprise

Tecnoglass Inc. price-consensus-eps-surprise-chart | Tecnoglass Inc. Quote

Tecnoglass reported total revenues of $239.6 million, which missed the Zacks Consensus Estimate of $241 million. Revenues increased 23.1% from $194.6 million in the year-ago period.

Multi-family and commercial revenues rose 24.3% year over year to record levels, driven by sustained strong activity in key markets. Single-family residential revenues grew 21.3% year over year, indicating market share gains from geographic expansion and a broader product offering. Foreign currency exchange fluctuations negatively impacted total quarterly revenues by $0.3 million.

Tecnoglass’ Margin & Cost Details

Gross profit was $106.5 million, up 28.3% from $83 million in the year-ago quarter. Gross margin expanded 190 bps to 44.5%, driven by stronger pricing, stable raw material costs, operational leverage and favorable foreign exchange rates.

Selling, general and administrative expenses increased to $39.4 million from $32.4 million in the prior-year quarter. The rise was primarily caused by higher transportation and commission costs associated with revenue growth, increased personnel expenses following company-wide salary adjustments at the beginning of the year and certain non-recurring costs related to the previously announced strategic review. As a percentage of revenues, the metric was 16.4% compared with 16.7% in the prior year.

Adjusted EBITDA was $79.2 million, representing a rise of 27.9% from the previous year. The adjusted EBITDA margin was 33.1%, indicating an increase of 130 bps from the prior-year period, driven by higher revenues and improved gross margins.

TGLS’ Financial Health Snapshot

TGLS ended the quarter with $134.9 million in cash and cash equivalents and $170 million in available credit under its revolving facilities, bringing total liquidity to $305 million.

In 2024, the company generated $170.5 million in operating cash flow. Capital expenditure was $79.6 million for the period.

The company returned $19.7 million to its shareholders through cash dividends during the year. As of Feb. 27, 2025, approximately $76.5 million remains under the current share repurchase program.

What to Expect From Tecnoglass in 2025

For 2025, management expects revenues between $940 million and $1.02 billion, representing growth of approximately 10% at the midpoint of the range. Adjusted EBITDA is predicted to range from $300 million to $340 million, up from $275.8 million in 2024.

This Zacks Rank #3 (Hold) stock has lost 9.8% in the past three months compared with the industry’s decline of 11.2%.

The Kroger Co. KR is likely to register decreases in the top and bottom lines when it reports fourth-quarter fiscal 2024 results on March 6. The Zacks Consensus Estimate for revenues is pegged at $34,594 million, indicating a decline of 6.7% from the prior-year reported figure.

The consensus mark for the bottom line has increased a penny in the past seven days and is pegged at $1.10. The consensus figure implies a decline of 17.9% from the prior-year quarter. The company delivered a trailing four-quarter earnings surprise of 6.8%, on average. In the last reported quarter, the bottom line was in line with the Zacks Consensus Estimate.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The Kroger Co. Price, Consensus and EPS Surprise

The Kroger Co. price-consensus-eps-surprise-chart | The Kroger Co. Quote

Things to Know Before KR’s Q4 Earnings

Kroger continues to navigate a challenging operating environment, shaped by tightening consumer spending and stiff competition. Budget-conscious households remain under pressure due to multiyear inflation and higher interest rates, which might have impacted Kroger’s sales and customer behavior in the fourth quarter.

The company has been grappling with rising operating, general and administrative (OG&A) expenses. In the third quarter, the OG&A rate, excluding fuel and adjustment items, increased 22 basis points, caused by higher incentive plan expenses and the divestiture of Kroger Specialty Pharmacy. Any deleverage in OG&A could weigh on profitability.

The Zacks Consensus Estimate for total retail sales, excluding fuel, is pinned at $30,895 million, indicating a 7.3% year-over-year decline. Identical sales without fuel are predicted to grow 1.8%, which shows a deceleration from 2.3% increase registered in the preceding quarter. The consensus mark indicates supermarket fuel sales to fall 4.2% year over year to $3,323 million. Meanwhile, the consensus estimate for other sales is pegged at $293 million, up from $285 million in the prior year.

Despite challenges, Kroger’s customer segmentation strategy, emphasis on value-driven offerings and expansion of ‘Our Brands’ portfolio are likely to have helped it maintain a competitive position. The company remains committed to its core strengths, including a diverse fresh product selection, personalized shopping experiences and a seamless digital ecosystem. These strategic endeavors are likely to have played a key role in supporting Kroger’s performance in the fourth quarter.

What the Zacks Model Predicts for KR

Our proven model does not conclusively predict an earnings beat for Kroger this time around. 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. However, that is not the case here.

Kroger has a Zacks Rank #3 and an Earnings ESP of -0.20% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

DICK'S Sporting Goods, Inc. DKS currently has an Earnings ESP of +0.11% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company's top line is anticipated to have decreased year over year when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.8 billion, which indicates a 3.3% decrease from the figure reported in the year-ago quarter.

The company is expected to register a decline in the bottom line. The consensus estimate for DICK'S Sporting Goods’ fourth-quarter earnings is pegged at $3.47 per share, down 9.9% from the year-ago quarter. DKS delivered a trailing four-quarter earnings surprise of 11.4%, on average.

Costco Wholesale Corporation COST currently has an Earnings ESP of +0.14% and a Zacks Rank of 2. The company is likely to register growth in both top and bottom lines when it reports second-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Costco’s quarterly revenues is pegged at $63.2 billion, which indicates 8.2% growth from the prior-year quarter.

The Zacks Consensus Estimate for Costco’s quarterly earnings per share is pegged at $4.09, indicating a 10.2% increase from the year-ago period. COST delivered a trailing four-quarter earnings surprise of 2%, on average.

Five Below, Inc. FIVE has an Earnings ESP of +1.45% and a Zacks Rank of 3 at present. FIVE is likely to register top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.4 billion, indicating 2.9% growth from the figure reported in the year-ago quarter.

The consensus estimate for Five Below’s fiscal fourth-quarter earnings is pegged at $3.35 per share, implying an 8.2% decline from the figure reported in the year-ago quarter. FIVE delivered delivered an average earnings surprise of 39% in the trailing four quarters.

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

The Gap, Inc. GAP is expected to register top and bottom-line declines when it reports fourth-quarter fiscal 2024 results on March 6, after the closing bell.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at 36 cents per share, suggesting a 26.5% decline from the year-ago quarter’s reported figure. The consensus estimate for fiscal fourth-quarter earnings has been unchanged in the past 30 days. For revenues, the consensus mark is pegged at $4.1 billion, indicating a 5.4% rise from the year-ago quarter’s reported figure.

The San Francisco, CA-based company has been reporting steady earnings outcomes, as evident from its positive top and bottom-line surprise trends in the trailing four quarters. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 28.6%. GAP has a trailing four-quarter earnings surprise of 101.2%, on average. Given its positive record, the question is whether the stock can maintain its momentum.

Earnings Whispers for GAP

Our proven model conclusively predicts an earnings beat for Gap this time around. 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. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Gap currently has an Earnings ESP of +11.55% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

What to Expect From GAP’s Q4 Earnings: Key Trends

GAP’s fourth-quarter fiscal 2024 results are expected to reflect its ability to gain market share and revive its brand position. Management has been committed to creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda and efficiently controlling expenses. Gains from these actions are expected to have bolstered the company’s performance in fourth-quarter fiscal 2024.

Fueled by optimism around its holiday collection, Gap raised its fiscal 2024 outlook. In the fourth quarter of fiscal 2024, the company prioritized enhanced experiences for online and in-store shoppers by refreshing product imagery on its website and remodeling 15% of its stores. Gap was committed to executing with excellence in the fiscal fourth quarter.

Strong performances in the fiscal third quarter and the early fourth quarter positioned the company well for the holiday season. This has bolstered its confidence to raise its fiscal 2024 outlook for sales, gross margin and operating income growth. As a result, management forecast sales growth of 1.5-2% on a 52-week basis for fiscal 2024, implying fourth-quarter net sales growth of 1-2%.

The company’s fourth-quarter fiscal 2024 performance is expected to have gained from improved margins, driven by lower airfreight and increased promotional activity. Lower advertising expenses and technology investments from cost-saving actions bode well. The company has been aggressively undertaking cost-management actions, which are expected to have improved its performance in the to-be-reported quarter.

The Gap, Inc. Price and EPS Surprise

The Gap, Inc. price-eps-surprise | The Gap, Inc. Quote

On the last reported quarter’s earnings call, Gap anticipated the gross margin to expand at least 220 basis points (bps) year over year for fiscal 2024, including 100 bps of commodity cost gains realized in the first half of the fiscal year. This improvement was driven by commodity cost tailwinds in the first half of fiscal 2024, improved inventory management and relatively neutral ROD. In fourth-quarter fiscal 2024, the gross margin is expected to have been consistent with last year. Operating income for fiscal 2024 is projected to increase year over year in the mid-to-high 60%. This represents substantial progress toward restoring historical operating profit levels.

We expect the adjusted gross margin to expand 210 basis points for fiscal 2024. Our model projects adjusted operating income to surge 69.1% year over year in fiscal 2024, with an operating margin of 6.8%. Our model predicts year-over-year adjusted operating expenses to decline 7.1% for the fourth quarter and 1.1% in fiscal 2024.

Gap has been navigating an uncertain macroeconomic environment, including inflationary pressures and other challenges, which are expected to have impacted its top-line performance in the to-be-reported quarter. A decline in consumer confidence — a key economic indicator — could have further affected spending. Rising operating and SG&A expenses may put pressure on the company’s profitability for the fiscal fourth quarter.

Gap’s Price Performance & Valuation Look Promising

The company’s shares have exhibited an uptrend in the past year, rising 17.7%, leaving behind its industry peers and the S&P 500. In the past year, the apparel retailer’s shares have jumped 17.7%, outperforming the industry’s growth of 4.9% and the S&P 500’s rally of 17.1%. Meanwhile, the stock has underperformed the sector’s rise of 24% in the same period.

The Gap stock has displayed a significant rally compared with Deckers Outdoor DECK, American Eagle Outfitters Inc. AEO and Abercrombie & Fitch’s ANF declines of 9.7%, 45.7% and 25%, respectively, in the past year.

GAP's One-Year Price Performance