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L Brands (LB) to Report Q3 Earnings: What's in Store?

L Brands, Inc.LB , a specialty retailer of women's intimate and other apparel, beauty and personal care products, is slated to report third-quarter fiscal 2015 results on Nov 18. The big question facing investors is, whether the company will be able to continue with its positive earnings surprise streak in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 4%. Let's see how things are shaping up for this announcement.

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that L Brands is likely to beat earnings estimates 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. L Brands has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 53 cents. The company carries a Zacks Rank #2 (Buy), which increases the predictive power of ESP. However, the company's ESP of 0.00% makes surprise prediction difficult.

Factors Influencing this Quarter

L Brands commands a market-leading position in the lingerie, personal care and beauty segments. We believe that the company's innovations in merchandise and exclusive assortments remain popular among consumers, thereby setting it apart from peers. L Brands recently raised its earnings projection for third-quarter fiscal 2015. The company now expects earnings per share in the range of 51-53 cents, up from 40-45 cents expected earlier as well as the prior-year figure of 44 cents. However, given the competitive retail landscape, the aggressive promotional strategies undertaken to gain market share may weigh upon the company's margins in the quarter to be reported. Moreover, foreign currency headwinds may play spoilsport.

Stocks Poised to Beat Earnings Estimates

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:

Casey's General Stores, Inc. CASY has an Earnings ESP of +23.78% and a Zacks Rank #1 (Strong Buy).

Signet Jewelers Limited SIG has an Earnings ESP of +2.63% and a Zacks Rank #2.

Costco Wholesale Corporation COST has an Earnings ESP of +1.72% and a Zacks Rank #3 (Hold).

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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

COSTCO WHOLE CP (COST): Free Stock Analysis Report

SIGNET JEWELERS (SIG): Free Stock Analysis Report

CASEYS GEN STRS (CASY): Free Stock Analysis Report

L BRANDS INC (LB): 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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