Will Conn's (CONN) Miss Earnings Estimates? - Analyst Blog

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Conn's Inc . ( CONN ), a Texas-based durable consumer goods retailer, is slated to report its first-quarter fiscal 2015 results on Jun 2, 2014. In the last quarter, it posted a negative surprise of 5.1%. Let's see how things are shaping up for this announcement.

Factors Influencing this Quarter

Following an impressive fourth-quarter fiscal 2014, the company remains optimistic about its results for fiscal 2015. The company expects comparable-store sales to increase in the range of 5%-10% while earnings to grow in the range of 32.3%- 44.0% and come in between $3.40 and $3.70 per share in fiscal 2015.

However, we believe this optimism for the rest of the year could be slightly impacted by the upcoming quarter's results. In the first-quarter of fiscal 2015, the company's sales might be hurt by a slowdown in the housing industry growth due to a severe winter in January and February, rising mortgage rates as well as increased housing prices. We expect the impact of the aforesaid factors on sales to slightly weigh on first-quarter earnings.

Earnings Whispers?

Our proven model does not conclusively show that Conn's 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 to surpass earnings estimates. However, this is not the case here, as you will see below:

Zero Zacks ESP: ESP (Expected Surprise Prediction) for Conn's is 0.00%. This is because the Most Accurate estimate stands at 73 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank #3 (Hold): Conn's Zacks Rank #3 when combined with a zero ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and 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 other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Quanex Building Products Corporation ( NX ) with an Earnings ESP of +100.00% holds a Zacks Rank #3.

HD Supply Holdings, Inc. ( HDS ) Earnings ESP stands at +11.77% and it carries a Zacks Rank #3.

Amira Nature Foods Ltd. ( ANFI ) has an Earnings ESP of +3.23% and a Zacks Rank #3.

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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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