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Dillard's (DDS) to Report Q3 Earnings: What to Expect?

Dillard's Inc.DDS is expected to report third-quarter fiscal 2015 results on Nov 12. In the last quarter, the company delivered a positive earnings surprise of 2.7%. Let's see how things are shaping up for this announcement.

Factors Influencing this Quarter

Though Dillard's posted better-than-expected results in the last quarter, earnings declined year over year due to weak margins and higher operating expenses. Moreover, the company's earnings have underperformed the Zacks Consensus Estimate by an average of roughly 2% over the past four quarters. Further, Dillard's guidance for fiscal 2015 indicates significant cost pressures which may hurt the bottom line again. While these factors keep us cautious of the upcoming results, we remain impressed with the company's focus on increasing productivity at existing stores, developing a leading omni-channel platform and enhancing its domestic operations to support top- and bottom-line growth. Consequently, we would prefer to wait and see what's in store for Dilliard's in the quarter to be reported.

Earnings Whispers

Our proven model does not conclusively show that Dillard'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: Earnings ESP for Dillard's is currently pegged at -9.92%. This is because the Most Accurate estimate of $1.09 stands below the Zacks Consensus Estimate of $1.21.

Zacks Rank: Dillard's Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

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

The Kroger Co. KR has an Earnings ESP of +2.56% and a Zacks Rank #2 (Buy).

Inter Parfums Inc. IPAR has an Earnings ESP of +15.00% and a Zacks Rank #2.

Campbell Soup Company CPB has an Earnings ESP of +2.63% and a Zacks Rank #3.

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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

KROGER CO (KR): Free Stock Analysis Report

DILLARDS INC-A (DDS): Free Stock Analysis Report

CAMPBELL SOUP (CPB): Free Stock Analysis Report

INTER PARFUMS (IPAR): 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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