Dollar Tree, Inc.
), operator of discount variety stores, is slated to report its
first-quarter fiscal 2014 results on May 22, 2014. In the last
quarter, it posted a negative surprise of 2.86%. Let's see how
things are shaping up for this announcement.
Factors Influencing This Quarter
The disappointing fourth-quarter fiscal 2013 results put the
company on the back foot. The adverse weather conditions locked
consumers indoor, while the soft economic recovery compelled
management to take a cautious stance while providing sales and
earnings guidance for the first quarter. Margins are also expected
to remain under pressure.
Our proven model does not conclusively show that Dollar Tree is
likely to beat earnings estimates this quarter. This is because a
stock needs to have both a positive
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:
ESP for Dollar Tree is -1.49%. This is because the Most Accurate
estimate stands at 66 cents, while the Zacks Consensus Estimate is
pegged at 67 cents a share.
Dollar Tree's Zacks Rank #4 (Sell) lowers the predictive power of
ESP. However, we need to have a positive ESP to be confident about
an earnings surprise. 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
Stocks that Warrant a Look
Here are some other companies you may want to consider as our
model shows they have the right combination of elements:
The Kroger Co.
) has an Earnings ESP of +0.95% and a Zacks Rank #2 (Buy).
Lions Gate Entertainment Corp.
) has an Earnings ESP of +7.69% and a Zacks Rank #3 (Hold).
Best Buy Co., Inc.
) has an Earnings ESP of +10.53% and a Zacks Rank #3 (Hold).
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