Ascena Retail Group Inc. (ASNA), a specialty retailer that offers clothing for women as well as teen girls and boys, is slated to report fourth-quarter fiscal 2014 results on Sep 22. In the last quarter, it posted a positive surprise of 35%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Past Quarter
The company’s third-quarter results benefited from improved gross margin and lower-than-anticipated expenses.
Ascena remains focused on undertaking its long-term strategic plans as most of the brands are already operational in its Ohio distribution center. The company expects all its brands to be fully operational by fall 2014. However, Ascena indicated that challenging macroeconomic trends might spill over into this quarter.
Earnings Whispers
Our proven model does not conclusively show that Ascena 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. However, this is not the case here, as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 18 cents.
Zacks Rank: Ascena carries a Zacks Rank #3 (Hold). Though this increases our predictive power, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #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 companies you may want to consider as our model shows that these have the right combination of elements:
Barnes & Noble, Inc. (BKS) has an Earnings ESP of +5.88% and a Zacks Rank #1 (Strong Buy).
Chipotle Mexican Grill, Inc. (CMG) has an Earnings ESP of +1.56% and a Zacks Rank #1.
BJ's Restaurants, Inc. (BJRI) has an Earnings ESP of +15.39% and a Zacks Rank #2 (Buy).
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