Family Dollar Stores Inc.
), an S&P 500 company, is slated to report its second-quarter
fiscal 2013 results on Apr 10. In the last quarter, it posted a
negative surprise of 6.8%. Let's see how things are shaping up
for this announcement.
Growth Factors this Past Quarter
Gross margin pressure coupled with anticipated headwinds
related to insurance expenditure weighed upon Family Dollar's
bottom-line performance during the first quarter of fiscal 2013.
The increase in sales of lower margin merchandises is resulting
in the contraction of gross margin. Increased discounts and
higher inventory shrinkage are also hurting the margins. For
fiscal 2013, management expects gross margin to remain under
Our proven model does not conclusively show that Family Dollar
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, #2 or #3 for this to happen. This is not
the case here as you will see below.
ESP for Family Dollar is -1.64%. This is because the Most
Accurate Estimate stands at $1.20, while the Zacks Consensus
Estimate is pegged at $1.22.
Zacks Rank #4 (Sell):
Family Dollar's Zacks Rank #4 (Sell) lowers the predictive power
of ESP because the Zacks Rank #4 when combined with a negative
ESP makes surprise prediction difficult. We caution against
stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into
the earnings announcement, especially when the company is seeing
negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
), Earnings ESP of +19.15% and Zacks Rank #1 (Strong Buy).
Kraft Foods Group, Inc.
), Earnings ESP of +4.69% and Zacks Rank #2 (Buy).
), Earnings ESP of +141.67% and Zacks Rank #3 (Hold).
AMAZON.COM INC (AMZN): Free Stock Analysis
CONNS INC (CONN): Free Stock Analysis Report
FAMILY DOLLAR (FDO): Free Stock Analysis
KRAFT FOODS GRP (KRFT): Free Stock Analysis
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