Skechers U.S.A., Inc. (SKX), the designer, developer, marketer and distributor of footwear for men and women, is slated to report fourth-quarter 2014 results on Feb 11. Last quarter, it had posted a positive surprise of 17.9%. Let’s see how things are shaping up for this announcement.
Factors Affecting this Quarter
Skechers remains focused on product innovation, opening additional stores and increasing distribution channels along with development of international distribution agreements for improvement of sales and profitability. Moreover, international business remains a significant growth driver for the company’s sales. However, intense competition in the footwear industry and currency headwinds might weigh upon the quarterly performance.
Earnings Whispers?
Our proven model does not conclusively show that Skechers is likely to beat earnings estimates 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 for Skechers is -4.55%. This is because the Most Accurate estimate stands at 42 cents and the Zacks Consensus Estimate stands at 44 cents.
Zacks Rank: Skechers' Zacks Rank #1 (Strong Buy) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
The Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
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 beat earnings this quarter:
Select Comfort Corporation (SCSS) has an Earnings ESP of +4.35% and a Zacks Rank #1.
Whole Foods Market, Inc. (WFM) has an Earnings ESP of +2.22% and a Zacks Rank #2 (Buy).
McGraw Hill Financial, Inc. (MHFI) has an Earnings ESP of +2.22% and a Zacks Rank #3 (Hold).
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