Will Foot Locker (FL) Post a Surprise this Earnings Season? - Analyst Blog


Foot Locker, Inc. ( FL ), athletic apparel and footwear retailer, is slated to report its second-quarter 2014 earnings on Aug 22, 2014, before the opening bell. In the previous quarter, the company delivered a positive earnings surprise of 4.72%. Let's see how things are shaping up for this announcement.       

Factors Influencing this Quarter

Foot Locker's stellar first-quarter performance was a result of the effective implementation of the operational and financial plans. The improved top line consequently pulled up the bottom line, leading to better-than-expected results. Management believes that by continuing to exploit opportunities like children's business, shop-in-shop expansion in collaboration with its vendors, development of banner.com and enhancement of assortments, the company is likely to benefit in the future.

Earnings Whispers

Our proven model does not conclusively show that Foot Locker is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (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.

Zero Zacks 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 the Most Accurate estimate and the Zacks Consensus Estimate, both stand at 54 cents.

Zacks Rank : Foot Locker 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 other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Abercrombie & Fitch Co. ( ANF ), Earnings ESP of +20.00% and a Zacks Rank #2 (Buy).

Dollar Tree, Inc. ( DLTR ), Earnings ESP of +7.69% and a Zacks Rank #3.

Costco Wholesale Corporation ( COST ), Earnings ESP of +1.33% and a Zacks Rank #3.

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ABERCROMBIE (ANF): Free Stock Analysis Report

COSTCO WHOLE CP (COST): Free Stock Analysis Report

FOOT LOCKER INC (FL): 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: DLTR , ANF , COST , FL



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