Skechers U.S.A., Inc. SKX, designer, developer, marketer, and distributor of footwear, is slated to report first-quarter 2015 results on Apr 22. In the last quarter, the company had posted a negative earnings surprise of 2.3%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
With increased focus on the new line of products, efforts directed toward cost containment and inventory management, a global distribution platform and sturdy backlogs, Skechers remains confident of sustaining growth in the quarter to be reported. However, unfavorable currency fluctuations may hurt the company’s results, similar to the fourth quarter of 2014, during which the bottom line was impacted by 9 cents a share, leaving investors disappointed.
Earnings Whispers
Our proven model does not conclusively show that Skechers 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: Skechers has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at $1.01.
Zacks Rank: Skechers carries a Zacks Rank #3 (Hold). Though a Zacks Rank #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:
Tyson Foods, Inc. TSN has an Earnings ESP of +1.35% and a Zacks Rank #2 (Buy).
BJ's Restaurants, Inc. BJRI has an Earnings ESP of +7.14% and a Zacks Rank #2.
The New York Times Company NYT has an Earnings ESP of +12.50% and a Zacks Rank #3.
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