Ralph Lauren Corporation
) - a designer, marketer and distributor of lifestyle products -
is likely to beat expectations while reporting its fiscal 2013
third-quarter results on Feb 6.
Why a Likely Positive Surprise?
Our proven model shows that Ralph Lauren may beat earnings
because it has the right combination of two key components -
Positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #2.
Ralph Lauren currently has an Earnings ESP of +0.90%. This is
because the Most Accurate Estimate stands at $2.24, while the
Zacks Consensus Estimate is pegged at $2.22.
Zacks #2 Rank (Buy):
Stocks with Zacks Rank #1, #2 and #3 have significantly higher
chances of beating the earnings. The sell rated stocks (#4 and
#5) should never be considered going into an earnings
The combination of Ralph Lauren's Zacks Rank #2 (Buy) and
Earnings ESP of +0.90% makes us confident regarding a positive
earnings beat by the company on Feb 6.
What is Driving the Better-than-Expected Earnings?
We believe that Ralph Lauren's initiatives to capitalize on
opportunities in Asia, spurred by reduced long-term debt, augur
well for the future operating performance. Moreover, Ralph Lauren
leverages its globally renowned brands and premium positioning of
these to bolster its well-established business in the specialty
With respect to earnings surprise, Ralph Lauren has surpassed
the Zacks Consensus Estimate in the trailing 4 quarters with an
average surprise of 10.9%, and most recently topping by 6.5% in
the second quarter of fiscal 2013.
Other Stocks to Consider
Ralph Lauren is not the only firm we are looking up to this
earnings season. The following companies, which are also Ralph
Lauren's industry peers, are likely to beat the earnings in the
Abercrombie & Fitch
) with Earnings ESP of +5.18% and a Zacks Rank #1 (Strong
Michael Kors Holdings Limited
) with Earnings ESP of +5.00% and a Zacks Rank #1 (Strong
) with Earnings ESP of +0.67% and a Zacks Rank #3 (Hold).
ABERCROMBIE (ANF): Free Stock Analysis Report
MICHAEL KORS (KORS): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
RALPH LAUREN CP (RL): Free Stock Analysis
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