Apparel and shoe retailer, ANN INC. ANN is slated to report its fourth-quarter fiscal 2014 earnings on Mar 13, 2015. In the previous quarter, the company reported positive earnings surprise of 4.4%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
ANN’s fourth quarter results are likely to bear the brunt of the ongoing labor disruption at the West Coast ports. The company has been facing incremental air freight costs due to the disruption. Moreover, a tepid performance by its Ann Taylor and LOFT brands and a highly promotional retail environment may pressure margins and revenues.
Earnings Whispers
Our proven model does not conclusively show that ANN 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.
Negative Zacks ESP: ESP is currently pegged at -200.00% for ANN. This is because the Most Accurate estimate stands at a loss of 6 cents per share whereas the Zacks Consensus Estimate is pegged at a loss of 2 cents.
Zacks Rank: ANN’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about a bottom line beat.
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
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:
The Men’s Wearhouse Inc. MW has an Earnings ESP of +57.14% and a Zacks Rank #2 (Buy).
Genesco Inc. GCO has an Earnings ESP of +0.42% and a Zacks Rank #3.
Nike Inc. NKE has an Earnings ESP of +1.18% and a Zacks Rank #3.
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