Will Ross Stores (ROST) Miss Earnings on Tough Retail Scene? - Analyst Blog


Shutterstock photo

Ross Stores Inc. ( ROST ) is set to report second-quarter fiscal 2014 results on Aug 21, 2014. Last quarter, it posted negative earnings surprise of 0.9%. Let us see how things are developing for this announcement.

Factors Affecting this Quarter

Uncertain economic scenario and a distressed retail market are likely to affect the company's second-quarter performance. Management, during last earnings release, had guided to a comps growth of 1%-2% in the second quarter, as against 4% and 7% growth in the comparable quarters of 2013 and 2012, respectively. Sales are expected to improve 5%-6%, as against 9% in the second quarter of fiscal 2013.

Earnings Whispers

Our proven model does not conclusively project Ross Stores 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, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP:  ESP for Ross Stores is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.09 per share.

Zacks Rank: Ross Stores carries a Zacks Rank #3 (Hold) 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:  

Abercrombie & Fitch Co. ( ANF ) has an Earnings ESP of +10.00% and a Zacks Rank #2 (Buy).

Zoe's Kitchen, Inc. ( ZOES ) has an Earnings ESP of +50.00% and a Zacks Rank #2.

Dollar Tree, Inc. ( DLTR ) has an Earnings ESP of +7.69% and a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DOLLAR TREE INC (DLTR): Free Stock Analysis Report

ABERCROMBIE (ANF): Free Stock Analysis Report

ROSS STORES (ROST): Free Stock Analysis Report

ZOES KITCHEN (ZOES): Free Stock Analysis Report

To read this article on Zacks.com click here.

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
More Headlines for: DLTR , ANF , ROST , ZOES

More from Zacks.com




Equity Research
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com