Will Macy's (M) Miss Earnings this Quarter? - Analyst Blog

Macy's, Inc. (M), full-line departmental retailer, is slated to post its first quarter fiscal 2014 earnings results on May 14, 2014, before the market opens. In the previous quarter, it reported a positive earnings surprise of nearly 6.5%. Let's see how things are shaping up for this announcement.       

Growth Factors this Quarter

Although the company's results continue to be driven by My Macy's localization initiatives, omnichannel integration, Magic Selling, strong financials and promotional strategies, management remains cautious of the tepid macro economic environment, as consumers are still wary of discretionary spending.

Earnings Whispers?

Our proven model does not conclusively show that Macy's is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank  #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zero Zacks ESP: Macy's currently has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 59 cents.

Zacks Rank #3 (Hold): Macy's Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

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:

Rite Aid Corporation RAD, Earnings ESP of +14.29% and a Zacks Rank #1 (Strong Buy).

The Kroger Co.KR, Earnings ESP of +0.95% and a Zacks Rank #2 (Buy).

Foot Locker, Inc.FL, Earnings ESP of +1.9% and a Zacks Rank #3.