We expect luxury retailer
) to beat expectations when it reports fourth quarter and full
year fiscal 2013 results on Feb 26, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Saks is likely to beat estimates
because it has the right combination of two key ingredients.
Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at+6.67%.This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #3 (Hold):
Note that stocks with Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of beating earnings. The Sell-rated
stocks (#4 and #5) should never be considered going into an
earnings announcement. Saks currently retains a Zacks Rank #3
The combination of the stock's Zacks Rank #3 (Hold) and +6.67%
ESP makes us highly confident of a positive earnings beat on Feb
What is Driving the Better-than-Expected Earnings?
Saks' underlying business is gaining momentum due to its
strong same store sales that were the result of the company's
investments in omni channel initiatives and strategies coupled
with efficient cost management.
Saks delivered solid earnings results in both the second and
third quarters, which were well ahead of prior-year quarter
earnings. Saks posted positive surprises for the last four
quarters with an average surprise of 16.27%.
Saks women's and men's contemporary apparel, women's and men's
shoes, handbags, fine jewelry and fragrances, have continued to
post positive comparable store sales for more than two years
Investment in omni channel retailing will help Saks boost
sales as customers have the option of shopping through all
available shopping channels such as mobile Internet devices,
computers, television, catalog and others. Moreover, disciplined
cost management and operational initiatives are expected to
improve margins in the coming quarter.
Overall, growth prospects for 2013 look bright, as operating
margin and earnings improvements are expected to continue.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that they have the right combination of elements to
post an earnings beat this quarter:
New York & Company Inc.
) with an Earnings ESP of +12.50% and a Zacks Rank #2 (Buy).
Abercrombie & Fitch Company
) with an Earnings ESP of +2.59% and a Zacks Rank #2 (Buy).
Dollar Tree Inc.
) has an Earnings ESP of +1.01% and a Zacks Rank #3 (Hold).
ABERCROMBIE (ANF): Free Stock Analysis Report
DOLLAR TREE INC (DLTR): Free Stock Analysis
NEW YORK & CO (NWY): Free Stock Analysis
SAKS INC (SKS): Free Stock Analysis Report
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