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Will Carter's (CRI) Miss on Q2 Earnings Due to Rising Costs?

Zacks Equity Research

Apparel retailer, Carter's Inc. (CRI), is set to report its second-quarter 2014 results on Jul 24, 2014. Last quarter, it posted a positive surprise of 2.8%. Let us see how things are developing for this announcement.

Growth Factors this Quarter

Carter's second quarter earnings are likely to be impacted by the continuously rising product and investment costs. Moreover, unfavorable currency fluctuations are likely to add to the woes.

Earnings Whispers

Our proven model does not conclusively project Carter's as likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and Zacks Rank #1 #2 or #3 for this to happen. This is not the case here as you will see below.

Zacks ESP:  ESP for Carter's is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 47 cents.

Zacks Rank #4 (Sell): Carter's Zacks Rank #4 when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows these to have the right combination of elements to post an earnings beat:  

Archer Daniels Midland Company (ADM) Earnings ESP stands at +8.33% and it carries a Zacks Rank #2 (Buy).

Colgate-Palmolive Co. (CL) with an Earnings ESP of +1.37% holds a Zacks Rank #2.

Marinemax Inc. (HZO) has an Earnings ESP of +13.21% and a Zacks Rank #2.

Read the Full Research Report on ADM
Read the Full Research Report on CL
Read the Full Research Report on HZO
Read the Full Research Report on CRI

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