Will Macy's Beat Earnings? - Analyst Blog

By Zacks Equity Research,

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Macy's, Inc. ( M ) is slated to report its third-quarter fiscal 2013 results before the market opens on Nov 13, 2013. In the last quarter, it posted a negative surprise of 7.69%. Let's see how things are shaping up for this announcement.

Factors this Past Quarter

Macy's posted lower-than-expected second-quarter fiscal 2013 results as consumers' cautious attitude towards making any discretionary purchases resulted in soft sales. Moreover, discounts offered also hurt margins. As a result, management trimmed its comparable sales and earnings outlook.

Earnings Whispers?

Our proven model does not conclusively show that Macy's is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3 for this to happen. This is not the case here, as you will see below.

Zacks ESP: ESP for Macy's is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 38 cents.

Zacks Rank #3 (Hold): Macy's Zacks Rank #3 lowers the predictive power of ESP. The Zacks Rank #3 when combined with an ESP of 0.00% 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.

Stocks that Warrant a Look

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:

Hanesbrands Inc. ( HBI ), Earnings ESP of +1.11% and Zacks Rank #1 (Strong Buy).

Lumber Liquidators Holdings, Inc. ( LL ), Earnings ESP of +1.39% and Zacks Rank #2 (Buy).

Michael Kors Holdings Limited ( KORS ), Earnings ESP of +1.16% and a Zacks Rank #2 (Buy).

HANESBRANDS INC (HBI): Free Stock Analysis Report

MICHAEL KORS (KORS): Free Stock Analysis Report

LUMBER LIQUIDAT (LL): Free Stock Analysis Report

MACYS INC (M): 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 Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: HBI , KORS , LL , M

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