Are Investors Skeptical about Buckle's (BKE) Q1 Earnings?
The Buckle, Inc. BKE is all set to release first-quarter fiscal 2017 results on May 18. The question lingering in investors’ minds is whether this retailer of casual apparel, footwear and accessories will be able to deliver a positive earnings surprise in the to-be-reported quarter. In the trailing four quarters, the company underperformed the Zacks Consensus Estimate by an average of 6.3%. Let’s see how things are shaping up for this announcement.
Investors Remain Skeptical
Investors’ don’t seem enthusiastic ahead of Buckle’s earnings release. We observe that the stock has declined roughly 10% in the past five days. In fact, the stock has plunged approximately 14.3% in the past three months, while the Zacks categorized Retail-Apparel/Shoe industry has declined 10.6%. However, the broader Retail-Wholesale sector of which both are part of, has gained 7.6%.
Per the latest Earnings Preview report as of May 12, Retail-Wholesale sector is likely to witness earnings decline of 1.7% but revenue growth of 3.3%. Let’s take a closer look as to how Buckle is expected to contribute to the sector’s performance.
The current Zacks Consensus Estimate for the first quarter of fiscal 2017 is 34 cents, down about 29% from the year-ago period. We noted that the Zacks Consensus Estimate has been stable in the last 30 days. Analysts polled by Zacks anticipate revenues of $212.3 million, down nearly 13% from the prior-year quarter.
Factors at Play
Buckle has not been able to turn the performance of its Women’s business around. Women's merchandise sales were down about 21% in the fourth quarter of fiscal 2016, while Men's merchandise sales dropped 9%. Moreover, a competitive retail landscape and cautious consumer spending have been weighing upon the company’s performance. Comps for the 13-week period ended Apr 29, 2017 declined 12.7%, while net sales decreased by 12.8% to $212.3 million. However, management is trying all means to improve store traffic and taking measures to enhance its brands’ assortments. Whether these initiatives will actually benefit the company or not, is a wait-and-watch story.
Buckle, Inc. (The) Price, Consensus and EPS Surprise
Buckle, Inc. (The) Price, Consensus and EPS Surprise | Buckle, Inc. (The) Quote
What Does the Zacks Model Unveil?
Our proven model does not conclusively show that Buckle 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Buckle has an Earnings ESP of -5.88% as the Most Accurate estimate is at 32 cents, while the Zacks Consensus Estimate is pegged at 34 cents. Although, Buckle’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.
Where You Should Focus?
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Best Buy Co., Inc. BBY has an Earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Children's Place, Inc. PLCE has an Earnings ESP of +1.82% and a Zacks Rank #2.
Lowe's Companies, Inc. LOW has an Earnings ESP of +1.87% and a Zacks Rank #3.
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Buckle, Inc. (The) (BKE): Free Stock Analysis Report
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