ANN INC. (ANN), the women’s clothing retailer, is slated to post fourth-quarter fiscal 2013 results on Mar 14, 2014. In the previous quarter, the company delivered a positive earnings surprise of 2.3%. Let’s see how things are shaping up for this quarter.
Factors in the Past Quarter
In the previous quarter, Ann’s strong financial results were primarily driven by robust top-line performance along with effective cost management and lower share counts. Net sales of $657.5 million grew year over year and also beat the Zacks Consensus Estimate, backed by a 3.7% rise in same-store sales. Moreover, Selling, General and Administrative (SG&A) expenses, as a percentage of sales dipped to 45%, due to cost savings and increased net sales, partially offset by higher store expansion costs.
Earnings Whispers
Our proven model does not conclusively show that Ann is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.
Zacks ESP: Ann currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 7 cents.
Zacks Rank: Ann’s Zacks Rank #3 (Hold) when combined with a 0.00% ESP 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 momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
TD Ameritrade Holding Corporation (AMTD), Earnings ESP of +6.25% and a Zacks Rank #1 (Strong Buy).
CommScope Holding Company, Inc. (COMM), Earnings ESP of +5.71% and a Zacks Rank #1 (Strong Buy).
First Merchants Corporation (FRME), Earnings ESP of +2.56% and a Zacks Rank #1 (Strong Buy).
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