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Will Aeropostale (ARO) Disappoint This Earnings Season? - Analyst Blog

Posted: 3/12/2014 9:00:00 AM
Referenced Stocks: ARO;BTE;EMES;REI

Aeropostale, Inc. ( ARO ), a specialty retailer of accessories and casual apparel, is set to report its fourth quarter and full-year 2013 results on Mar 13, 2014. Last quarter, it posted a negative surprise of 16.0%. Let us see how things are developing for this announcement.

Factors in the Past Quarter

Aeropostale's third-quarter 2013 earnings were battered by weak traffic and higher promotional expenses. Moreover, weakness in certain core categories affected the quarterly sales.

Earnings Whispers

Our proven model does not conclusively project Aeropostale as likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below.

Zacks ESP: ESP for Aeropostale is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 30 cents.

Zacks Rank #4 (Sell). Aeropostale's Zacks Rank #4 (Sell) lowers the predictive power of ESP because this Zacks Rank when combined with a 0.00% ESP makes surprise prediction difficult. 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 momentum.

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:  

Baytex Energy Corp. ( BTE ) with an Earnings ESP of +5.31% and a Zacks Rank #1

Emerge Energy Services LP ( EMES ) with an Earnings ESP of +8.96% and a Zacks Rank #1

Ring Energy, Inc. ( REI ) with an Earnings ESP of +50.00% and a Zacks Rank #2

AEROPOSTALE INC (ARO): Free Stock Analysis Report

BAYTEX ENERGY (BTE): Free Stock Analysis Report

EMERGE ENRG SVC (EMES): Free Stock Analysis Report

RING ENERGY INC (REI): Free Stock Analysis Report

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