Will Buckle (BKE) Disappoint This Earnings Season? - Analyst Blog

The Buckle, Inc. BKE, retailer of casual apparel, footwear and accessories for men and women, is set to report its first quarter fiscal 2014 results on May 22, 2014. Last quarter, it posted a positive surprise of 1.65%. Let us see how things are developing for this announcement.

Factors Influencing the Quarter

Difficult retail environment along with inclement weather (February and March) is likely to have a negative impact on Buckle's first-quarter fiscal 2014 results. The company also lags behind its peers in terms of online sales volume.

The company concluded fourth quarter fiscal 2013 on a very high inventory level (up 19.5% year over year). Promotional activity associated with the inventory clearance might drag down profits.

Earnings Whispers

Our proven model does not conclusively project Buckle as likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here, as you will see below.

Negative Zacks ESP:  ESP for Buckle is -1.28%. This is because the Most Accurate estimate is pegged at 77 cents while the Zacks Consensus Estimate stands at 78 cents.

Zacks Rank: Buckle's Zacks Rank #4 (Sell), when combined with a negative ESP, makes surprise prediction unlikely. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows these to have the right combination of elements to post an earnings beat:  

The Kroger Co. KR with an Earnings ESP of +0.95% holds a Zacks Rank #2.

The Gap, Inc. GPS with an Earnings ESP of +1.79% holds a Zacks Rank #3.

Lions Gate Entertainment Corp. LGF has an Earnings ESP of +7.69% and a Zacks Rank #3.