Pacific Sunwear of California, Inc. (PSUN) looks strong moving in to 2015 as the stock has surged 29% since posting impressive third-quarter fiscal 2014 results on Dec 3, 2014.
This Anaheim, CA-based specialty retailer reported a loss of 3 cents a share that fared better than both the Zacks Consensus Estimate and the prior-year quarter loss of 5 cents. Moreover, revenues rose 4.6% to $212.3 million from $202.8 million in the year-ago period and came ahead of the Zacks Consensus Estimate of $207 million.
Sales were primarily driven by a 4% improvement in comps. This is the 11th straight quarter that the company has registered comps growth. Efficient inventory management also contributed to improved results.
Moreover, healthy results prompted management to provide an encouraging fourth-quarter fiscal 2014 outlook. The company expects to post adjusted loss of 12–17 cents a share compared with a loss of 17 cents in the year-ago quarter. Revenues are projected to be in the $218–$227 million range.
Further, strong results and an upbeat guidance led to an improvement in the Zacks Consensus Estimate. The Zacks Consensus Estimate of loss of 29 cents for fiscal 2014 and loss of 17 cents for fiscal 2015 narrowed from the estimate of a loss of 31 cents and 18 cents, respectively, over the past 60 days.
In addition, our proven model shows that Pacific Sunwear of California is likely to beat fourth-quarter earnings because it has the right combination of two key components, i.e. a positive Earnings ESP and a Zacks Rank of #1, 2 or 3. The company sports a Zacks Rank #1 (Strong Buy) and has an Earnings ESP of +7.69% (as the Zacks Consensus Estimate is pegged at a loss of 13 cents whereas and the Most Accurate estimate stands at a loss of 12 cents). The company is scheduled to release fourth-quarter results on Mar 17, 2015.
Noticeably, the company has beaten the Zacks Consensus Estimate in the trailing four quarters by an average of 15.2%.
Other Favorably Ranked Stocks
Other favorably-ranked stocks that are expected to continue with their upbeat performance include Shoe Carnival Inc. (SCVL), Bebe Stores, Inc. (BEBE) and DSW Inc. (DSW). Shoe Carnival sports a Zacks Rank #1 while Bebe Stores and DSW Inc carry a Zacks Rank #2 (Buy).
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