Will Wolverine (WWW) Surprise this Earnings Season?

Zacks

Wolverine World Wide Inc. (WWW), one of the leading footwear brands, is slated to report its second-quarter fiscal 2014 earnings on Jul 15, before the opening bell. In the previous quarter, Wolverine recorded a positive earnings surprise of 26.7%. Let’s see how things are shaping up for this announcement.       

Factors Influencing this Quarter

In the previous quarter, the company’s results were driven by the robust performance of all its brands, which makes management optimistic about its operations going forward. Wolverine believes that its international spread, strong bonding with consumers and focus on product innovations will keep it well positioned and boost top and bottom line growth. Also, the Easter shift to the second quarter is likely to boost results. However, weather disruptions and currency translations remain threats.

Earnings Whispers

Our proven model does not conclusively show that Wolverine is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below:

Earnings ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 27 cents.

Zacks Rank: Wolverine carries a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

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

Other Stocks to Consider

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:

PetMed Express, Inc. (PETS), Earnings ESP of +4.00% and a Zacks Rank #2 (Buy).

Advance Auto Parts Inc. (AAP), Earnings ESP of +2.99% and a Zacks Rank #2 (Buy).

Conns Inc. (CONN), Earnings ESP of +2.70% and a Zacks Rank #2 (Buy).
 

Read the Full Research Report on PETS
Read the Full Research Report on AAP
Read the Full Research Report on WWW
Read the Full Research Report on CONN


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