Ninety-Nine Cents Only Stores Earnings Preview

99 Cents Only Stores (NYSE: NDN  ) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday, Nov. 9. 99 Cents Only Stores' main business is the sale of various consumer products through its retail stores at price points of mainly $0.99 or less.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on 99 Cents Only Stores, with six out of nine analysts rating it a hold. Analysts don't like 99 Cents Only Stores as much as competitor Fred's overall. Four out of nine analysts rate Fred's a buy compared to one out of nine for 99 Cents Only Stores.
  • Revenue forecasts: On average, analysts predict $358.6 million in revenue this quarter. That would represent a rise of 7.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.22 per share. Estimates range from $0.19 to $0.24.

What our community says:
CAPS All-Stars are solidly backing the stock, with 84% giving it an outperform rating. The community at large agrees with the All-Stars, with 77.8% assigning it a rating of "outperform." Fools have embraced 99 Cents Only Stores and haven't been shy with their opinions lately, logging 147 posts in the past 30 days. 99 Cents Only Stores' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
99 Cents Only Stores' profit has risen year over year by an average of 13.8% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

40.4%

39.9%

42.1%

40.8%

Operating Margin

7.7%

7.4%

11.5%

6.2%

Net Margin

4.8%

4.7%

7.3%

3.9%

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