Apparel retailer, The Men's Wearhouse, Inc. (MW), is set to report its second-quarter fiscal 2014 results on Sep 10, 2014. Last quarter, it posted a positive surprise of 4.6%. Let us see how things are developing for this announcement.
Factors Affecting this Quarter
Men's Wearhouse second-quarter earnings are likely to be impacted by the higher advertising spend. The company has been battling soft revenues. To combat, it has merged with men’s apparel retailer Jos. A. Bank Clothiers Inc. The merger is expected to provide synergies that will benefit the new company. However, it will take some time to show results.
Earnings Whispers
Our proven model does not conclusively project Men's Wearhouse 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 Men's Wearhouse is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.06 per share.
Zacks Rank: Men's Wearhouse Zacks Rank #4 (Sell) lowers the predictive power of ESP. 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.
Other 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:
Limoneira Company (LMNR) with an Earnings ESP of +12.50% holds a Zacks Rank #2 (Buy).
Manchester United plc (MANU) has an Earnings ESP of +25.00% and a Zacks Rank #2.
Calavo Growers Inc. (CVGW) Earnings ESP stands at +8.70% and it carries a Zacks Rank #3.
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