) is set to report secons quarter fiscal 2014 results on Aug 28,
2013. Last quarter, it posted a 75.0% negative surprise. Let's
see how things are shaping up for this announcement.
Factors to Consider This Quarter
According to data published by the company last month comps in
the first two months of the second quarter were sluggish due to
unfavorable weather. Although weather improved in the subsequent
month, the 'back to school' season was unable to trigger much
gain in sales for GES because of lower domestic spending.
Overall, revenues and comps have been soft for the past few
quarters, due to the tough retail conditions prevailing
throughout the nation. Margins have also been sluggish due to
higher cost of sales. We do not expect the second quarter to be
Our proven model does not conclusively show that Guess? is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive earnings Expected Surprise
Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as shown below.
Negative Zacks ESP:
The Most Accurate estimate stands at $1.14 while the Zacks
Consensus Estimate is higher at $1.20. That is a difference of
Zacks Rank #4 (Sell):
Guess?'s Zacks Rank #4 (Sell) lowers the predictive power of ESP
because the Zacks Rank #4 (Sell) when combined with a negative
ESP 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 momentum.
Other Stocks to Consider
Here are some other companies worth considering as our model
shows that they have the right combination of elements to post an
earnings beat this quarter:
BUCKLE INC (BKE): Free Stock Analysis Report
CITI TRENDS INC (CTRN): Free Stock Analysis
GUESS INC (GES): Free Stock Analysis Report
PILGRIMS PRIDE (PPC): Free Stock Analysis
To read this article on Zacks.com click here.
Pilgrims Pride Corp.
) -- Earnings ESP of +35.09% and a Zacks Rank #1 (Strong
Citi Trends Inc.
) -- Earnings ESP of +10.00% and a Zacks Rank #1 (Strong
The Buckle Inc.
) -- Earnings ESP of +2.20% and a Zacks Rank #3 (Hold)