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Is Conns (CONN) Positioned to Beat Q2 Earnings Estimates?

We expect Conns Inc.CONN to beat expectations when it reports second-quarter fiscal 2016 results on Sep 9.

Why a Likely Positive Surprise?

Our proven model shows that Conns is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP: Conns currently has an Earnings ESP of +17.02%. This is because the Most Accurate estimate of 55 cents stands above the Zacks Consensus Estimate of 47 cents.

Zacks Rank: Conns carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

The combination of Conns' Zacks Rank #3 and Earnings ESP of +17.02% make us confident of an earnings beat.

What is Driving the Better-than-Expected Results?

A lot of optimism surrounds Conns following its better-than-expected first-quarter results and impressive fiscal 2016 outlook. First-quarter results mainly gained from higher top-line growth boosted by strong consumer demand for home appliances, furniture and mattresses as well as consumer electronics.

Further, the company's positive comparable sales (comps) results from May through July point toward a positive second quarter from sales standpoint. Moreover, the company's retail sales for the second quarter went up 12.7% to $325 million. Comps for the quarter grew 3.1%.

We believe Conns will continue to perform well given its growth initiatives, which include expansion of its store base and incorporation of technological advancements to better serve its patrons. The company leverages a wide network of stores to effectively penetrate into its target markets, this enables it to generate healthy sales and gain market share. These factors keep us optimistic about the company's upcoming quarterly results.

Other Stocks that Warrant a Look

Here are some companies you may want to consider as our model shows that these too, have the right combination of elements to post an earnings beat this quarter:

Constellation Brands Inc. STZ has an Earnings ESP of +6.11% and a Zacks Rank #2 (Buy).

Pepsico Inc. PEP has an Earnings ESP of +1.58% and a Zacks Rank #3.

Rite Aid Corp. RAD has an Earnings ESP of +33.33% and a Zacks Rank #3.

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RITE AID CORP (RAD): Free Stock Analysis Report

PEPSICO INC (PEP): Free Stock Analysis Report

CONSTELLATN BRD (STZ): Free Stock Analysis Report

CONNS INC (CONN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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