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Will Aaron's (AAN) Surprise Estimates This Earnings Season? - Analyst Blog

Rent-to-own specialty retailer, Aaron's Inc.AAN , is set to report second-quarter 2015 earnings results on Jul 24. In the last quarter, it posted a positive surprise of 35.2%. Let's see how things are developing for this announcement.

Factors Influencing the Quarter

Following the strong first-quarter 2015 results, the company's second quarter performance is also expected to be robust. The company has made significant progress riding on its strategic initiatives, mainly cost reduction.

Overall, the company's strategic plans focus on bringing it back to profitability by stimulating same-store sales growth, building a strong online platform, optimizing cost savings to expand margins and encouraging expansion of its franchise stores. Further, the company's business appears impressive based on its eCommerce growth and the opportunities from the acquisition of Progressive, a merchandise lease-to-own company acquired in April 2014.

Earnings Whispers

Our proven model does not conclusively project Aaron's as likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and Zacks Rank #1 #2 or #3 for this to happen. This is not the case here as you will see below.

Zacks ESP: ESP for Aaron's is 0.00%. This is because the Most Accurate estimate stands at 46 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank: Aaron's Zacks Rank #1 (Strong Buy) when combined with an ESP of 0.00% makes surprise prediction difficult.

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

Stocks That Warrant a Look

Here are some other companies in the broader retail sector which you might want to consider as our model shows they have the right combination of elements to post an earnings beat:

Skechers USA Inc. SKX has an Earnings ESP of +2.02% and a Zacks Rank #1 (Strong Buy).

Amazon.com Inc. AMZN has an Earnings ESP of +33.33% and a Zacks Rank #2 (Buy).

Hanesbrands Inc. HBI has an Earnings ESP of +6.00% and a Zacks Rank #2.

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AARONS INC (AAN): Free Stock Analysis Report

AMAZON.COM INC (AMZN): Free Stock Analysis Report

SKECHERS USA-A (SKX): Free Stock Analysis Report

HANESBRANDS INC (HBI): 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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