Will Macy's (M) Miss Earnings?

Zacks

Macy’s, Inc. (M) is slated to report its fourth-quarter fiscal 2013 results on Feb 25, 2014. In the last quarter, it posted a positive surprise of 23.7%. Let’s see how things are shaping up for this announcement.

Factors this Past Quarter

Macy’s delivered better-than-expected third-quarter fiscal 2013 results. Management cited that My Macy's localization initiatives, omnichannel integration, Magic Selling and promotional strategies were the driving factors behind the sturdy performance amid a tepid economic environment.

Earnings Whispers?

Our proven model does not conclusively show that Macy’s 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, #2 or #3 for this to happen. This is not the case here, as you will see below.

Negative Zacks ESP: ESP for Macy’s is -0.92%. This is because the Most Accurate Estimate stands at $2.15, while the Zacks Consensus Estimate is pegged at $2.17.

Zacks Rank #2 (Buy): Macy’s Zacks Rank #2 (Buy) when combined with a negative ESP of 0.92% makes surprise prediction difficult. We caution against stocks with 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 to post an earnings beat:

Foot Locker, Inc. (FL), Earnings ESP of +8.00% and a Zacks Rank #2 (Buy).

Finish Line Inc. (FINL), Earnings ESP of +2.35% and a Zacks Rank #2 (Buy).

Texas Roadhouse, Inc. (TXRH), Earnings ESP of +4.35% and a Zacks Rank #2 (Buy).

Read the Full Research Report on M
Read the Full Research Report on FL
Read the Full Research Report on TXRH
Read the Full Research Report on FINL


Zacks Investment Research

View Comments