Family Dollar Stores Inc.
), an S&P 500 company, is slated to report its third-quarter
fiscal 2013 results on Jul 10. In the last quarter, it posted a
negative surprise of 0.8%. Let's see how things are shaping up
for this announcement.
Growth Factors this Past Quarter
The unexpected delay in tax refunds of 2012 adversely impacted
sales at the end of January and at the beginning of February,
resulting in lower-than-expected second-quarter fiscal 2013
results. The increase in sales of lower margin merchandises
facilitated the contraction in gross margin. Further, management
hinted that discretionary sales would remain under pressure.
Our proven model does not conclusively show that Family Dollar
is likely to beat earnings this quarter. This 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 -2.91%. This is because the Most
Accurate Estimate stands at $1.00, while the Zacks Consensus
Estimate is pegged at $1.03.
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 +3.33% and a Zacks Rank #1 (Strong Buy).
Deckers Outdoor Corp.
), Earnings ESP of +13.21% and a Zacks Rank #2 (Buy).
), Earnings ESP of +1.33% and a Zacks Rank #3 (Hold).
DECKERS OUTDOOR (DECK): Free Stock Analysis
FAMILY DOLLAR (FDO): Free Stock Analysis
MANPOWER INC WI (MAN): Free Stock Analysis
RENT-A-CENTER (RCII): Free Stock Analysis
To read this article on Zacks.com click here.