Will Skechers (SKX) Keep the Earnings Streak Alive in Q3? - Analyst Blog
Skechers U.S.A., Inc. ( SKX ), the designer, developer, marketer and distributor of footwear for men and women, is slated to report third-quarter 2014 results on Oct 22. Last quarter, it had posted a positive surprise of 65.9%. Let's see how things are shaping up for this announcement.
Factors Influencing this Quarter
Skechers remains committed to focus on innovative products, open additional stores and increase distribution channels with development of international distribution agreements for improvement of sales and profitability. Moreover, international business remains a significant growth driver for the company's sales. However, intense competition in the footwear industry and soft economic recovery may remain a drag in the quarter.
Our proven model does not conclusively show that Skechers 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. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP for Skechers is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 91 cents.
Zacks Rank: Skechers sports a Zacks Rank #1 (Strong Buy). Though a favorable Zacks Rank increases the predictive power of ESP, the company's ESP of 0.00% makes surprise predictions difficult.
The Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
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 beat earnings this quarter:
L Brands, Inc. ( LB ) has an Earnings ESP of +3.13% and a Zacks Rank #2 (Buy).
Under Armour, Inc. ( UA ) has an Earnings ESP of +2.50% and a Zacks Rank #2.
The Home Depot, Inc. ( HD ) has an Earnings ESP of +0.89% and a Zacks Rank #2.