Will Conn's (CONN) Miss Earnings Estimates? - Analyst Blog

Conn's Inc. CONN, a Texas-based durable consumer goods retailer, is slated to report its first-quarter fiscal 2015 results on Jun 2, 2014. In the last quarter, it posted a negative surprise of 5.1%. Let's see how things are shaping up for this announcement.

Factors Influencing this Quarter

Following an impressive fourth-quarter fiscal 2014, the company remains optimistic about its results for fiscal 2015. The company expects comparable-store sales to increase in the range of 5%–10% while earnings to grow in the range of 32.3%– 44.0% and come in between $3.40 and $3.70 per share in fiscal 2015.

However, we believe this optimism for the rest of the year could be slightly impacted by the upcoming quarter's results. In the first-quarter of fiscal 2015, the company's sales might be hurt by a slowdown in the housing industry growth due to a severe winter in January and February, rising mortgage rates as well as increased housing prices. We expect the impact of the aforesaid factors on sales to slightly weigh on first-quarter earnings.

Earnings Whispers?

Our proven model does not conclusively show that Conn's 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 to surpass earnings estimates. However, this is not the case here, as you will see below:

Zero Zacks ESP: ESP (Expected Surprise Prediction) for Conn's is 0.00%. This is because the Most Accurate estimate stands at 73 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank #3 (Hold): Conn's Zacks Rank #3 when combined with a zero ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

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:

Quanex Building Products Corporation NX with an Earnings ESP of +100.00% holds a Zacks Rank #3.

HD Supply Holdings, Inc. HDS Earnings ESP stands at +11.77% and it carries a Zacks Rank #3.

Amira Nature Foods Ltd. ANFI has an Earnings ESP of +3.23% and a Zacks Rank #3.

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