Ascena Retail Group Inc. ASNA is slated to report third-quarter fiscal 2015 results on Jun 2. In the last quarter, the company had delivered a negative earnings surprise of 12.5%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
We remain apprehensive about Ascena’s upcoming results, given the persistent weakness at the company’s Justice brand. Though Ascena is making efforts to bring a turnaround in the brand, it has been reporting softer-than-expected results over the past few quarters. Also, we remain cautious due to the port labor headwinds at the West Coast which are expected to impact the company’s results in the quarter to be reported.
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 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 19 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:
Big 5 Sporting Goods Corp. BGFV has an Earnings ESP of +6.67% and a Zacks Rank #1 (Strong Buy).
Casey's General Stores, Inc. CASY has an Earnings ESP of +14.29% and a Zacks Rank #2 (Buy).
Burlington Stores, Inc. BURL has an Earnings ESP of +5.00% and a Zacks Rank #3 (Hold).
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