Will Zumiez (ZUMZ) Miss This Earnings Season? - Analyst Blog

Zumiez Inc. ZUMZ is set to report fourth-quarter and fiscal 2013 results on Mar 13, 2014. Last quarter, it posted earnings per share in line with the Zacks Consensus Estimate. Let us see how things are shaping up for this announcement.

Growth Factors in the Past Quarter

Zumiez's third-quarter earnings mainly benefited from strong top-line growth but rise in expenses was a headwind. Operating expenses rose owing to continued investment in strengthening the company's omni-channel selling strategy. Top line was primarily attributed to solid comparable-store sales (comps) and e-Commerce performance, along with benefits from store openings. Comps in the quarter benefited from improvement in the juniors, hard goods, and accessories categories, offset by decline in the men's, boy's and footwear categories.

Earnings Whispers?

Our proven model does not conclusively project Zumiez to likely beat earnings this quarter. A stock needs to have both positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, that is not the case here due to the following factors:
 
Zacks ESP: ESP for Zumiez is 0.00% since the Most Accurate estimate stands at 61 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank: Zumiez's Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings surprise call. We caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is undergoing negative estimate revisions.

Other Stocks to Consider

Zumiez is not the only firm we are looking up to this earnings season. Our model shows that the following stocks have the right combination to post an earnings beat:

Emerge Energy Services LP EMES with Earnings ESP of +8.96% and a Zacks Rank #1 (Strong Buy)

Matador Resources Company MTDR with Earnings ESP of +7.14% and a Zacks Rank #3 (Hold)

Tiffany & Co. TIF with Earnings ESP of +0.66% and a Zacks Rank #3 (Hold)