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Skechers U.S.A., Inc. (SKX - Analyst Report) is slated to report its second-quarter 2013 results on Jul 24. In the last quarter, it posted a negative surprise of 27.8%. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Skechers’ first-quarter 2013 bottom-line results missed the Zacks estimates. Management stated that the quarterly earnings were hurt by 8 cents a share due to foreign currency translation loss of $3 million and a credit of $2.5 million to an account that bought a major part of excess toning inventory back in 2011.

Earnings Whispers?

Our proven model does not conclusively show that Skechers 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 Skechers is -33.33%. This is because the Most Accurate Estimate stands at 2 cents, while the Zacks Consensus Estimate is pegged at 3 cents.

Zacks Rank #1 (Strong Buy): Skechers’ Zacks Rank #1 (Strong Buy) lowers the predictive power of ESP because the Zacks Rank #1 when combined with a negative 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.

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 this quarter:

The Gap, Inc. (GPS - Analyst Report), Earnings ESP of +1.70% and a Zacks Rank #2 (Buy).

New York & Company Inc. (NWY - Snapshot Report), Earnings ESP of +33.33% and a Zacks Rank #2 (Buy).

DSW Inc. (DSW - Snapshot Report), Earnings ESP of +6.58% and a Zacks Rank #2 (Buy).

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