Central Garden & Pet Company (CENT) is expected to report fourth-quarter fiscal 2014 results on Dec 9. In the last quarter, it had posted a negative surprise of 12.5%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Despite being a leading name in the lawn, garden and pet supplies market, Central Garden & Pet has been facing difficulties for some time now. Lower-than-expected earnings and consistently lower revenues from the Pet segment are its major concerns. Moreover, stiff competition in the segment cannot be ignored. To mitigate its troubles, Central Garden & Pet is on an overhauling drive. How far the company has succeeded in its efforts remains to be noticed this quarter.
Earnings Whispers?
Our proven model does not conclusively show that Central Garden & Pet 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 Central Garden & Pet is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 25 cents.
Zacks Rank: Central Garden & Pet carries a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, 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:
Nike, Inc. (NKE) has an Earnings ESP of +1.45% and a Zacks Rank #2 (Buy).
Costco Wholesale Corporation (COST) has an Earnings ESP of +1.84% and a Zacks Rank #3.
AutoZone, Inc. (AZO) has an Earnings ESP of +0.56% and a Zacks Rank #3.
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