Markets
GCO

Is Genesco (GCO) Poised to Beat Earnings Estimates in Q4? - Analyst Blog

Genesco Inc.GCO is slated to report fourth-quarter fiscal 2015 results on Mar 12. In the last quarter, the company had delivered a negative earnings surprise of 11.1%. Let's see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Genesco is likely to beat earnings estimates this quarter as it has the right combination of two key ingredients.

Zacks ESP:Earnings ESP for Genesco is currently pegged at +0.42%. This is because the Most Accurate estimate of $2.41 a share stands above the Zacks Consensus Estimate of $2.40.

Zacks Rank: Genesco carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

The company's Zacks Rank #3 and positive ESP make us confident of an earnings beat.

What is Driving the Better-than-Expected Earnings?

Though Genesco's results lagged expectations in the previous quarter, we remain optimistic about the company's performance in the upcoming quarter taking into consideration its strategic advantage of operating through both its brick and mortar stores as well as its digital existence. Also, Genesco recently posted a 9% rise in comparables store sales for the holiday period, reflecting favorable fashion trends and efficient execution. These bullish factors along with the company's constant omni-channel endeavors make us optimistic about its upcoming results.

Notably, management envisions fiscal 2015 earnings in the range of $4.75 to $4.85 per share.

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:

Chipotle Mexican Grill Inc. CMG has an Earnings ESP of +0.84% and a Zacks Rank #3.

Dollar General Corporation DG has an Earnings ESP of +0.86% and a Zacks Rank #3.

Signet Jewelers Limited SIG has an Earnings ESP of +0.33% 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

CHIPOTLE MEXICN (CMG): Free Stock Analysis Report

DOLLAR GENERAL (DG): Free Stock Analysis Report

SIGNET JEWELERS (SIG): Free Stock Analysis Report

GENESCO INC (GCO): 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.


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

In This Story

GCO SIG CMG DG

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More