Will Gildan Active Wear (GIL) Disappoint This Earnings Season? - Analyst Blog


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Apparel retailer Gildan Activewear Inc . ( GIL ) is set to report its third-quarter fiscal 2014 results on Jul 31, 2014. Last quarter, it posted a positive surprise of 1.6%. Let us see how things are developing for this announcement.

Growth Factors This Quarter

Increased year-over-year cotton prices and inflationary pressures are likely to remain a drag on the company's earnings. Moreover, sales at the company's Printwear segment have not picked up as per expectations after a severe winter marred its earlier quarterly performance. 

However, the company is enhancing its operational efficiency as well as executing its retail initiatives which are likely to cushion earnings going forward. Investor focus for this quarter will also be on the company's update on its newest facility in Costa Rica.

Earnings Whispers

Our proven model does not conclusively project Gildan Activewear as likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below.

Zacks ESP:  ESP for Gildan Activewear is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 96 cents.

Zacks Rank: Gildan Activewear carries a Zacks Rank #2 which increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings surprise call. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Stocks to Consider

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

Archer Daniels Midland Co. ( ADM ) Earnings ESP stands at +5.26% and it carries a Zacks Rank #2.

Colgate-Palmolive Co. ( CL ) with an Earnings ESP of +1.37% holds a Zacks Rank #2.

Newell Rubbermaid Inc. ( NWL ) has an Earnings ESP of +1.85% and a Zacks Rank #2.

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GILDAN ACTVWEAR (GIL): Free Stock Analysis Report

NEWELL RUBBERMD (NWL): Free Stock Analysis Report

ARCHER DANIELS (ADM): Free Stock Analysis Report

COLGATE PALMOLI (CL): Free Stock Analysis Report

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

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: GIL , NWL , ADM , CL

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