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Will Coach (COH) Beat Earnings This Quarter?

Zacks Equity Research

Coach, Inc. (COH) is slated to report its fourth-quarter fiscal 2013 results on Jul 30, 2013. In the last quarter, it posted a positive surprise of 3.7%. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Coach posted better-than-expected third-quarter fiscal 2013 results attributable to the company’s proven strategy of investing in stores to enhance store sales productivity through product innovation, compelling pricing strategy, new merchandise assortments, and a cost-effective global sourcing model. The company’s long-term growth drivers include expansion of its global distribution model and venturing into under-penetrated markets.

Earnings Whispers?

Our proven model does not conclusively show that Coach is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a 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 Coach is 0.00%. This is because the Most Accurate Estimate stands at 89 cents, which is in line with the Zacks Consensus Estimate.

Zacks Rank #4 (Sell): Coach’s Zacks Rank #4 (Sell) lowers the predictive power of ESP because the Zacks Rank #4 when combined with 0.00% ESP 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 this quarter:

The Gap, Inc. (GPS), Earnings ESP of +1.70% and a Zacks Rank #1 (Strong Buy).

New York & Company Inc. (NWY), Earnings ESP of +33.33% and a Zacks Rank #1 (Strong Buy).

Abercrombie & Fitch Co. (ANF), Earnings ESP of +3.23% and a Zacks Rank #3 (Hold).

Read the Full Research Report on COH

Read the Full Research Report on ANF

Read the Full Research Report on GPS

Read the Full Research Report on NWY

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