Wolverine World Wide, Inc. WWW is scheduled to report third-quarter 2016 financial numbers before the opening bell on Oct 18.
In second-quarter, the company reported an earnings beat of 13.6%. Notably, the company has surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average positive earnings surprise of 15.8%. Here’s a discussion on the determinants of third-quarter results.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Wolverine World Wide is likely to beat estimates 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. Wolverine World Wide has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 48 cents. The company carries a Zacks Rank #3 (Hold). While the company’s Zacks Rank #3 increases the predictive power of ESP, yet we need to have a positive ESP to be confident about an earnings surprise.
Factors Influencing This Quarter
Though Wolverine World Wide surpassed the Zacks Consensus Estimate in the trailing three quarters, it might not be able to maintain the momentum in the third quarter due to tough domestic retail environment. Strengthening of the U.S. dollar is also likely to have an adverse effect on its performance in the quarter to be reported, given its huge overseas operations.
The company’s Sperry brand which declined to high teens in the second quarter is expected to return to growth trajectory in the latter half of 2016. Moreover, the company is keen on gross margin expansion, improving its DTC operations, managing operating expenses and portfolio management.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Big 5 Sporting Goods Corp. BGFV has an Earnings ESP of +3.33%. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots Inc. BIG carries a Zacks Rank #2 (Buy) and has an Earnings ESP of +50.00%.
Leggett & Platt, Incorporated LEG has an Earnings ESP of +1.61% and carries a Zacks Rank #3.
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