Genesco Inc. (GCO) is slated to report its third-quarter fiscal 2015 results on Dec 5, before the opening bell. In the last quarter, the company had delivered a negative earnings surprise of 38.2%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Genesco boasts a strategic advantage of operating through both, its brick and mortar, and its digital existence. The company’s constant omnichannel initiatives are expected to drive results in the quarter. However, Genesco has been delivering dismal results over the past two quarters. The last quarter was mainly impacted by lower-than-expected sales and gross margin at the Lids Sports Group segment. Further, we remain concerned about the company’s rising costs, which was also reflected by the increase in selling, general and administrative expenses as a percentage of sales in the previous quarter. Hence, we remain cautious of its performance this quarter.
Earnings Whispers?
Our proven model does not conclusively show that Genesco 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, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at $1.44.
Zacks Rank: Genesco 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:
Restoration Hardware Holdings, Inc. (RH) has an Earnings ESP of +2.13% and a Zacks Rank #2 (Buy).
Best Buy Co., Inc. (BBY) has an Earnings ESP of +0.76% and a Zacks Rank #2.
Zumiez, Inc. (ZUMZ) has an Earnings ESP of +1.92% 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
Be the first to comment