The Habit Restaurants, Inc.HABT is set to report first-quarter 2016 results on May 4, after the market closes. Last quarter, the company posted a positive earnings surprise of 25.00%, marking the fourth consecutive quarter of an earnings beat for the company. The company posted positive surprises in all of the previous four quarters, with an average earnings surprise of 30.89%. Let’s see what is in store this quarter.Factors at Play Habit Restaurants offers specialty sandwiches, fresh salads, shakes and malts. The company has been posting positive earnings surprises in the past few quarters, mainly backed by strong restaurant revenues in addition to comps growth. The trend is expected to continue in the to-be-reported quarter supported by the company’s increased focus on menu innovation and unit growth. Further, the company’s initiative to reduce the average cook time by five to seven minutes from order placing to delivery, is helping the company boost customer traffic, especially during peak hours. The company is also cashing in on the rising popularity of the niche burger segment. These positives are likely to boost first-quarter results. However, increases in labor and related expenses – mainly due to a spike in wages across most markets – are likely to hurt margins in the first quarter as it did in 2015. Further, the company has faced a deceleration in comps recently mainly due to heavy industry discounting and aggressive menu prices. Earnings Whispers Our proven model does not conclusively show that Habit Restaurants is likely to beat earnings this quarter. That 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. That is not the case here as you will see below. Zacks ESP: The Earnings ESP for Habit Restaurants is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 10 cents. Zacks Rank: Habit Restaurants’ Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.Stocks to Consider Here are some stocks in the restaurant sector that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter: Dave & Buster's Entertainment, Inc. PLAY, with an Earnings ESP of +1.70% and a Zacks Rank #1. The Wendy's Company WEN, with an Earnings ESP of +16.67% and a Zacks Rank #1. Red Robin Gourmet Burgers Inc. RRGB, with an Earnings ESP of +0.91% and a Zacks Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RED ROBIN GOURM (RRGB): Free Stock Analysis Report WENDYS CO/THE (WEN): Free Stock Analysis Report DAVE&BUSTRS ENT (PLAY): Free Stock Analysis Report HABIT RESTRNTS (HABT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research