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Can Zumiez’s (ZUMZ) Q3 Earnings Maintain Positive Trend?


Zumiez, Inc. ZUMZ is slated to report third-quarter fiscal 2016 results on Dec 1. Last quarter, the company posted a positive earnings surprise of 62.5%. Further, it has outperformed the Zacks Consensus Estimate by an average of 32% in the trailing four quarters, with a beat in each. Let’s see how things are shaping up for this announcement.

ZUMIEZ INC Price and EPS Surprise

ZUMIEZ INC Price and EPS Surprise | ZUMIEZ INC Quote

Factors Influencing this Quarter

After posting negative comparable store sales (comps) for 17 straight months, Zumiez had made a comeback with its September sales data. Further, in its recently reported October sales metrics, the company witnessed positive comps and sales growth, indicating that it is back on track. Also, a strong quarter-to-date performance revealed that the company is still showing resilience. Notably, Zumiez raised its third quarter earnings outlook to a range of 35–36 cents per share, following the robust October sales data.

While the overall retail environment remains challenging owing to weak consumer demand, let’s see if the aforementioned optimism can help Zumiez maintain its positive streak this time.

Earnings Whispers

Our proven model does not conclusively show that Zumiez 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:

Zacks ESP: Zumiez currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 36 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Zumiez’ Zacks Rank #2 increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

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:

Sanderson Farms, Inc. SAFM, slated to report earnings on Dec 15, has an Earnings ESP of +4.48% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ascena Retail Group Inc. ASNA scheduled for earnings on Dec 1, carries a Zacks Rank #3 and an Earnings ESP of +14.29%.

Express Inc. EXPR also slated for earnings on Dec 1, has an Earnings ESP of +16.67% and a Zacks Rank #3.

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