Limited Brands, Inc.
), a specialty retailer of women's intimate and other apparel,
beauty and personal care products, to beat expectations when it
reports fourth-quarter fiscal 2012 results on Feb 27, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Limited Brands is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Limited Brands currently has an Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of +0.58%. This is because the Most Accurate Estimate stands at
$1.74, while the Zacks Consensus Estimate is pegged at $1.73.
Zacks Rank #3 (Hold):
Note that stocks with Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of beating earnings estimates. The
sell-rated stocks (Zacks Rank #4 and #5) should never be
considered going into an earnings announcement.
The combination of Limited Brands' Zacks Rank #3 (Hold) and
+0.58% ESP make us very confident regarding a positive earnings
beat on Feb 27.
What is Driving the Better Than Expected Earnings?
Limited Brands' sustained focus on cost containment, inventory
management, and merchandise initiatives has kept it afloat in a
sluggish consumer environment. Management also expects gross
margin to improve, primarily driven by leverage in buying and
occupancy expense, and the sale of third-party apparel sourcing
business in Nov 2011.
Limited Brands seeks to expand aggressively in Canada and
internationally. The stores are generating sales volumes, nearly
two and a half times more than the U.S. average.
The positive trend is seen in the trailing four-quarter
average surprise of 3.4%.
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:
CONAGRA FOODS (CAG): Free Stock Analysis
LIMITED BRANDS (LTD): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
NEW YORK & CO (NWY): Free Stock Analysis
To read this article on Zacks.com click here.
ConAgra Foods, Inc.
), Earnings ESP of +1.79% and Zacks Rank #1 (Strong Buy)
New York & Company Inc. (
, Earnings ESP of +12.50% and Zacks Rank #2 (Buy)
), Earnings ESP of +0.51% and Zacks Rank #3 (Hold)