Leading fashion apparel, cosmetics and home furnishings retailer, Dillard's Inc. (DDS) is expected to post its third-quarter fiscal 2014 results on Nov 13, 2014. In the previous quarter, the company delivered a negative earnings surprise of 11.1%. Let’s see how things are shaping up for this announcement.
Factors Influencing the Quarter
Dillard’s is poised to witness remarkable growth in the long run thanks to its strategic initiatives, including developing a leading omni-channel platform and enhancing domestic operations. However, we cannot ignore the near-term headwinds, such as soft economic recovery and intense competition, which has also battered its second-quarter revenues. Furthermore, the company’s bleak outlook for fiscal 2014 keeps us skeptical about the stock’s near-term performance.
Earnings Whispers?
Our proven model does not conclusively show that Dillard’s is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.
Zacks ESP: Dillard’s currently has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at $1.26 a share.
Zacks Rank: Dillard’s Zacks Rank #4 (Sell) when combined with a Zero ESP 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.
Other Stocks to Consider
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 this quarter:
Best Buy Co. Inc. (BBY) has an Earnings ESP of +4.17% and a Zacks Rank #1 (Strong Buy).
Dollar Tree Inc.’s (DLTR) Earnings ESP stands at +1.56% with a Zacks Rank #2 (Buy).
Foot Locker Inc. (FL) has an Earnings ESP of +1.28% and a Zacks Rank #3 (Hold).
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