DICK’S Sporting Goods Inc. (DKS) is slated to release its third-quarter fiscal 2014 results on Nov 18, 2014. In the previous quarter, this sporting goods retailer reported a positive earnings surprise of 3.08%. Let’s see how things are shaping up for this announcement.
Factors Affecting This Quarter
Though DICK’s Sporting sounded cautiously optimistic about its year-end results, following a slight recovery in the second quarter, the company stated that operating results for the latter half of the year will be negatively impacted by cautious consumer spending and higher promotional activities, which may drag down 2014 earnings. Although the company provided an encouraging earnings forecast for the third quarter, due to the impact of the previously stated factors, 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 (Expected Surprise Prediction) 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: DICK’S Sporting currently has an Earnings ESP of 0.00%. This is because the Most Accurate estimate stands at 40 cents a share, which is in line with the Zacks Consensus Estimate.
Zacks Rank #4 (Sell): DICK’S Sporting’s Zacks Rank #4 when combined with a Zero ESP makes surprise prediction unlikely. 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
Some other companies that are going to report earnings results next week are Best Buy Co. Inc. (BBY), GameStop Corp. (GME) and L Brands Inc. (LB). While Best Buy has a Zacks Rank #1 (Strong Buy), GameStop and L Brands carry a Zacks Rank #2 (Buy).
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