Coach, Inc. COH is scheduled to release fourth-quarter fiscal 2015 results on Aug 4. The big question facing investors is, whether this designer and marketer of fine accessories and gifts, will be able to continue with its positive earnings surprise streak in the quarter to be reported.
The company’s past performance reveals that it has outperformed the Zacks Consensus Estimate in the trailing four quarters by an average of 10.2%. Analysts believe that the momentum building around the stock is guiding toward another impressive performance. Let’s see how things are shaping up for this announcement.
Zacks Model Shows Likely Earnings Beat
Our proven model shows that Coach is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. The Most Accurate estimate stands at 30 cents and the Zacks Consensus Estimate is pegged at 29 cents. So the ensuing +3.45% ESP and the company’s Zacks Rank #3 (Hold) make us reasonably confident of an earnings beat.
Factors Influencing This Quarter
Management had earlier projected a sales decline in low double-digits on a constant currency basis for fiscal 2015 due to lower promotions and store closures. However, we cannot ignore the company’s initiatives related to product launches, stores and marketing to bring itself back on the growth trajectory.
Management anticipates savings of approximately $100 million from its transformational initiative undertaken in fiscal 2015 and of about $150 million in ongoing annual savings in fiscal 2016. Coach also boasts a proven strategy of investing in stores to enhance store sales productivity through product innovation, compelling pricing strategy, new merchandise assortments, and a cost-effective global sourcing model. Moreover, the company is transforming itself into a lifestyle brand and is introducing modern luxury concept stores in key markets.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Guess' Inc. GES has an Earnings ESP of +6.67% and a Zacks Rank #1 (Strong Buy).
Dean Foods Co. DF has an Earnings ESP of +3.85% and a Zacks Rank #2 (Buy).
ULTA Salon, Cosmetics & Fragrance, Inc. ULTA has an Earnings ESP of +0.90% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment