Michael Kors Holdings Limited KORS, the designer, marketer, distributor and retailer of branded apparel and accessories, is slated to report second-quarter fiscal 2016 results on Nov 4. The big question facing investors is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 10%. Let’s see how things are shaping up for this announcement.
Zacks Model Shows Likely Earnings Beat
Our proven model shows that Michael Kors is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. The Most Accurate estimate stands at 92 cents and the Zacks Consensus Estimate is pegged at 89 cents. So the ensuing +3.37% ESP and the company’s Zacks Rank #3 (Hold) make us reasonably confident of an earnings beat.
Factors Influencing this Quarter
Michael Kors, which boasts a robust balance sheet, continues to invest heavily in new store openings, expansion of existing outlets and building eCommerce infrastructure. The company has been constantly deploying resources to build new shop-in-shops and upgrade its information system and distribution infrastructure. Management had earlier projected second-quarter fiscal 2016 revenue in the range of $1.06–$1.08 billion and earnings in the band of 86–90 cents a share.
Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Ralph Lauren Corporation RL has an Earnings ESP of +0.58% and a Zacks Rank #3.
Dean Foods Company DF has an Earnings ESP of +4.00% and a Zacks Rank #3.
CST Brands, Inc. CST has an Earnings ESP of +3.57% and a Zacks Rank #3.
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