Michael Kors Holding Ltd. KORS, a global luxury lifestyle company, is slated to report fourth-quarter fiscal 2015 results on May 27. In the last quarter, it posted a positive earnings surprise of 10.5%. Let’s see how things are shaping up for this announcement.
Factors Affecting this Quarter
Decelerating comps growth rate and shrinking margins raise concerns. Intensifying forex headwinds, along with delays caused by the West coast port disturbance add to the woes. Also, management retains a cautious outlook for fiscal 2015.
Earnings Whispers
Our proven model does not conclusively show that Michael Kors 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: Michael Kors has an Earnings ESP of -3.30%. This is because the Most Accurate estimate stands at 88 cents, whereas the Zacks Consensus Estimate is pegged higher at 91 cents.
Zacks Rank: Michael Kors carries a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) 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:
Casey's General Stores, Inc. CASY has an Earnings ESP of +14.29% and a Zacks Rank #1 (Strong Buy).
Tiffany & Co. TIF has an Earnings ESP of +7.25% and a Zacks Rank #3 (Hold).
Burlington Stores, Inc. BURL has an Earnings ESP of +5.00% and a Zacks Rank #3.
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