Wolverine World Wide Inc.WWW , one of the leading footwear brands, is set to report its second-quarter fiscal 2015 results on Jul 21. Last quarter, it posted a positive surprise of 8.8%. Let's see how things are developing prior to this announcement.
Factors to Consider This Quarter
Strengthening of the U.S dollar is expected to have an adverse impact on the company's second-quarter performance given its widespread overseas operations. Moreover, exit of the Patagonia Footwear license, store closures and extensive brand building exercise will weigh on Wolverine's performance.
Our proven model does not conclusively project Wolverine as likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: ESP for Wolverine is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 21 cents.
Zacks Rank: Wolverine's Zacks Rank #3 increases the predictive power of ESP but we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some other companies you may want to consider as our model shows these to 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.
Amazon.com Inc. AMZN has an Earnings ESP of +33.33% and a Zacks Rank #2.
Hanesbrands Inc. HBI has an Earnings ESP of +6.00% and a Zacks Rank #2.
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