), apparel and shoe retailer is slated to report its second-quarter
fiscal 2014 earnings on Aug 22, 2014. In the previous quarter, the
company delivered a negative earnings surprise of 2.94%. Let's see
how things are shaping up for this
Factors Influencing this Quarter
ANN's first quarter was impacted by extreme winter, slow consumer
traffic and intense promotional headwinds. The company's
preliminary results on this quarter were not as impressive as ANN
delivered dismal preliminary comparable store sales (comps) and
gross margin results. While weak comps were blamed on the same
aforementioned headwinds, the built-up pressure on gross margin was
due to the measures taken by the company to clear summer inventory.
Given the soft preliminary results, we remain less constructive on
the company's earnings results for the second quarter.
Our proven model does not conclusively show that ANN is likely to
beat earnings this quarter. This is because a stock needs to have
both a positive
(Expected Surprise Prediction) and a Zacks Rank #1, #2 or #3 for
this to happen. This is not the case here as you will see below.
Negative Zacks ESP
: The Earnings ESP, which represents the difference between the
Most Accurate estimate and the Zacks Consensus Estimate, is
currently pegged at -1.43%. This is because the Most Accurate
estimate of 69 cents is below the Zacks Consensus Estimate of 70
: ANN carries a Zacks Rank #5 (Strong Sell). We caution against
stocks with Zacks Rank #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
Abercrombie & Fitch Co. (
), Earnings ESP of +10.00% and a Zacks Rank #2 (Buy).
Dollar Tree, Inc. (
), Earnings ESP of +7.69% and a Zacks Rank #3.
Costco Wholesale Corporation (
), Earnings ESP of +1.33% and a Zacks Rank #3.
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