Ascena Retail Group Inc. ASNA, a specialty retailer offering clothing for women as well as teen girls and boys, is slated to report second-quarter fiscal 2015 results on Mar 3. In the last quarter, the company had delivered a positive earnings surprise of 3.7%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Ascena has outperformed the Zacks Consensus Estimate by an average of 6.5% over the past four quarters, with positive surprises in three quarters. Although this bodes well for the company, we remain cautious of its upcoming results as the Ascena’s Justice brand has been disappointing lately. The constant softer-than-expected results delivered by the brand triggered Ascena to lower its earnings per share outlook for fiscal 2015, thus making us less constructive on the company’s results for the second quarter.
Earnings Whispers
Our proven model does not conclusively show that Ascena is likely to beat earnings 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 Ascena is currently pegged at +12.50%. This is because the Most Accurate estimate of 9 cents stands above the Zacks Consensus Estimate of 8 cents.
Zacks Rank: Ascena carries a Zacks Rank #4 (Sell). 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 to post an earnings beat this quarter:
The Kroger Co. KR has an Earnings ESP of +6.74% and a Zacks Rank #2 (Buy).
Casey's General Stores Inc. CASY has an Earnings ESP of +30.14% and a Zacks Rank #2.
Zumiez, Inc. ZUMZ has an Earnings ESP of +1.27% and a Zacks Rank #2.
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