DICK’S Sporting Goods Inc. DKS is slated to release its fourth-quarter fiscal 2014 results on Mar 3, 2014. In the previous quarter, this sporting goods retailer had reported a positive earnings surprise of 2.5%. Let’s see how things are shaping up for this announcement.
Factors Affecting This Quarter
Following a heartening third-quarter performance, DICK’S Sporting is optimistic about its fourth quarter and fiscal 2014 results. The company’s optimism regarding the fourth quarter stems from its attractive product offering and advertising initiatives that are expected to boost comps growth. Comps for the fourth quarter are estimated to increase in the range of 1%–3%. Also, DICK’S Sporting anticipates its earnings per share for the quarter to come in the range of $1.18–$1.28. However, fourth-quarter results may bear the negative impact of cautious consumer spending and higher promotional activities during the holiday season. Hence, we remain slightly apprehensive about the company’s upcoming quarterly results.
Earnings Whispers?
Our proven model does not conclusively show that DICK’S Sporting 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: DICK’S Sporting currently has an Earnings ESP of -1.64%. This is because the Most Accurate estimate stands at $1.20 a share, below the Zacks Consensus Estimate of $1.22.
Zacks Rank: DICK’S Sporting’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
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 these have the right combination of elements to post an earnings beat:
Kroger Co. KR has an Earnings ESP of +6.74% and a Zacks Rank #2 (Buy).
PetSmart Inc. PETM has an Earnings ESP of +1.46% and a Zacks Rank #2.
Zumiez Inc. ZUMZ has an Earnings ESP of +1.27% and a Zacks Rank #2.
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