Carrols Restaurant Group, Inc. TAST is likely to register year-over-year earnings and revenue growth in its fourth-quarter 2023 results. The uptrend is likely to have been driven by strong Burger King Performance, digital business growth and new product launches. In the last reported quarter, the company reported an earnings surprise of 128.6%.

How Are Estimates Placed?

The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at 5 cents, indicating growth of 200% from a loss of 5 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $470.4 million. The metric suggests growth of 5.7% from the year-ago quarter’s figure.

Carrols Restaurant Group, Inc. Price and EPS Surprise

 

Carrols Restaurant Group, Inc. price-eps-surprise | Carrols Restaurant Group, Inc. Quote

 

Let’s analyze the factors that are likely to impact the company’s performance in the quarter to be reported.

Factors at Play

For the to-be-reported quarter, TAST’s top line is expected to have reflected mid-single digits comparable sales growth at its Burger King restaurants supported by accelerating traffic and successful product launches (such as the BK Royal Crispy Wraps). This, along with the expansion of Carol's digital business (nearing 10% of total sales) and investments in digital infrastructure like self-order kiosks, is likely to have helped sustain momentum into the fourth quarter.

Burger King's latest restaurant format (Sizzle) is anticipated to contribute positively to the company's fourth-quarter performance. The upgraded Sizzle image is set to enhance the customer experience through digital advancements, revamped Drive-Thru and pickup processes and distinctive design elements.

The company forecasts adjusted EBITDA to fall within the $28-$32 million range for the fourth quarter. Favorable factors such as reduced beef costs, minimal commodity inflation (projected in the low-single digits) and enhanced vendor agreements are expected to have bolstered margins and profitability in the upcoming reporting period.

What Our Model Says

Our proven model does not predict an earnings beat for Carrols Restaurant 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. But that's not the case here.

Earnings ESP: Carrols Restaurant has an Earnings ESP of 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 has a Zacks Rank #1 at present.