Will Dollar General (DG) Miss Earnings? - Analyst Blog

Dollar General Corporation DG is slated to report its fourth-quarter fiscal 2013 results on Mar 13, 2014. In the last quarter, it posted a positive surprise of 2.9%. Let's see how things are shaping up for this announcement.

Factors this Past Quarter

Dollar General posted better-than-expected third-quarter fiscal 2013 results, driven by a strong performance across the consumables category. Sales of the consumables category continue to improve, primarily buoyed by the introduction of tobacco products and robust sales of perishables and candy and snacks.

Earnings Whispers?

Our proven model does not conclusively show that Dollar General 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 for Dollar General is -1.98%. This is because the Most Accurate estimate stands at 99 cents, while the Zacks Consensus Estimate is pegged at $1.01.

Zacks Rank #3 (Hold): Dollar General's Zacks Rank #3 (Hold) when combined with a negative 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 momentum.

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:

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

Genco Shipping & Trading Ltd. GNK has an Earnings ESP of +10.26% and a Zacks Rank #2 (Buy).

Dick's Sporting Goods Inc. DKS has an Earnings ESP of +0.91% and a Zacks Rank #3 (Hold).