Will Coach (COH) Miss on Earnings?

Zacks

Coach Inc. (COH), the designer and marketer of fine accessories and gifts for women and men, is slated to report its third-quarter fiscal 2014 results on Apr 29, 2014. In the last quarter, it posted a negative surprise of 4.5%. Let’s see how things are shaping up for this announcement.

Factors this Past Quarter

Coach disappointed on the sales front that fell 6% due to sluggishness in the North American market and also fell short of the Zacks Consensus Estimate. The bottom line also failed to impress, as earnings of $1.06 per share missed Zacks’ expectation of $1.11 and tumbled 13.8% from the prior-year quarter. A mature domestic market and difficult consumer spending environment remain causes of concern.

Earnings Whispers?

Our proven model does not conclusively show that Coach is likely to beat earnings 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. This is not the case here, as you will see below.

Negative Zacks ESP: ESP for Coach is -1.59%. This is because the Most Accurate estimate stands at 62 cents, while the Zacks Consensus Estimate is pegged at 63 cents.

Zacks Rank #4 (Sell): Coach’s Zacks Rank #4 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:

Unit Corporation (UNT) has an Earnings ESP of +2.70% and a Zacks Rank #1 (Strong Buy).

Wynn Resorts Ltd. (WYNN) has an Earnings ESP of +1.90% and a Zacks Rank #2 (Buy).

Time Warner (TWX) has an Earnings ESP of +1.14% and a Zacks Rank #3 (Hold).

Read the Full Research Report on COH
Read the Full Research Report on WYNN
Read the Full Research Report on TWX
Read the Full Research Report on UNT


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