Will Crocs (CROX) Beat Earnings Estimates this Quarter? - Analyst Blog


Crocs, Inc. ( CROX ), one of the leading footwear brands, is slated to report its second-quarter fiscal 2014 earnings on Jul 22, before the opening bell. In the previous quarter, Crocs recorded a negative earnings surprise of 18.8%. Let's see how things are shaping up for this announcement.       

Factors Influencing this Quarter

The company intends to focus on boosting casual lifestyle footwear revenues, and maximize shareholder value. Given the tough retail environment, Crocs also aims to create a balance between achieving growth and enhancing its operating margin. The company expects robust contributions to its second quarter sales from its Asian and European businesses. However, its Japanese and American operations are likely to remain under pressure, owing to economic and distributional headwinds.

Earnings Whispers

Our proven model does not conclusively show that Crocs is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below:

Earnings ESP : The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 31 cents.

Zacks Rank : Crocs carries a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company's ESP of 0.00% makes surprise prediction difficult.

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.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

PetMed Express, Inc. ( PETS ), Earnings ESP of +4.00% and a Zacks Rank #2 (Buy).

Advance Auto Parts Inc. ( AAP ), Earnings ESP of +2.99% and a Zacks Rank #2.

Conns Inc. ( CONN ), Earnings ESP of +2.70% and a Zacks Rank #2.

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PETMED EXPRESS (PETS): Free Stock Analysis Report

ADVANCE AUTO PT (AAP): Free Stock Analysis Report

CROCS INC (CROX): Free Stock Analysis Report

CONNS INC (CONN): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: PETS , AAP , CROX , CONN



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