The first-quarter earnings season is halfway through and despite macroeconomic issues and continued volatility in the equity markets, a number of companies have come out with positive surprises, in terms of both earnings and revenues.
As per our Earnings Preview report, out of the 62% of the S&P 500 members who have already reported their first quarter results, 71.9% of the companies have beaten earnings estimates and 57.1% have surpassed top-line expectations, despite a decline in earnings and sales on a year-over-year basis.
This implies that either investors were prepared for even weaker results or the guidance for most companies was already lowered to easy-to-beat levels.
Footwear stocks also had a good start to 2016. Carter's, Inc.CRI that reported last week, posted better-than-expected results for both earnings and revenues. Among the few that reported on Apr 22, the designer of branded and lifestyle shoes - Skechers USA Inc.SKX - beat the Zacks Consensus Estimate for both earnings and revenues despite rising currency headwinds and other global pressures. Another footwear company Steven Madden, Ltd.SHOO posted in-line earnings and beat the Zacks Consensus Estimate for revenues.
The growing demand for brands as well as greater sales internationally has boosted profits at most of these shoe companies, despite issues like rising competition and changing consumer preferences.
Here we have two footwear stocks, each of which is scheduled to release its first-quarter numbers on May 5. Let's see how things are shaping up for this announcement.
Sequential Brands Group, Inc.SQBG , a licensing and brand management company, has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for first quarter earnings is pegged at 1 cent. Estimates have remained unchanged over the past 30 day period.
In the trailing four quarters, the company has outperformed the Zacks Consensus Estimate by an average of 36.34%.
New-York based Iconix Brand Group, Inc.ICON has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell). Meanwhile, the Zacks Consensus Estimate for first-quarter earnings is pegged at 23 cents.
The company posted negative earnings surprise in all the trailing four quarters, with a negative average surprise of 35.96%. Estimates have also been declining over the past 60 days.
We note that the company's performance has gone downhill since the beginning of the year 2015. Many law firms have filed a class action lawsuit against Iconix, criticizing the company's alleged accounting irregularities concerning free-cash flow accounting, organic growth, and gains on licensing fees.
Though the company restated its historical statements along with the fourth quarter 2015 results, these issues have adversely impacted growth. Further, for 2016, the company expects other headwinds like higher expenses, adjustments related to the financial restatement, transition costs to hamper its profitability.
Stay tuned! Check later on our full write-up on earnings releases of these stocks.
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CARTERS INC (CRI): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis Report
ICONIX BRAND GP (ICON): Free Stock Analysis Report
STEVEN MADDEN (SHOO): Free Stock Analysis Report
SEQUENTIAL BRND (SQBG): 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.
