Back to top

Analyst Blog

The Wet Seal Inc. (WTSL - Analyst Report) is set to report third-quarter fiscal 2013 results on Dec 4. Last quarter, it posted in-line earnings. Let us see how things are shaping up for this announcement.

Factors to be Considered this Quarter

On Nov 7, Wet Seal announced third-quarter fiscal 2013 sales results. Though comparative sales increase of 0.8% improved from the prior-year quarter’s decline of 13.5%, it was below management’s expectation of low single-digits gain. Sales also declined 5.8% year over year. Wet Seal expects third-quarter loss to range between 10 cents to 12 cents per share. We want to remind investors that the guidance reflects a wider loss of a band of 2 cents to 3 cents expected previously. The cautious guidance reflects a weak mall traffic for the past few months.

Earnings Whispers?

Our proven model does not conclusively show that Wet Seal is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, that is not the case here due to the following factors:

Zacks ESP: ESP for Wet Seal is 0.00%.

Zacks Rank: Wet Seal’s Zacks Rank #4 (Sell) when combined with a 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.

Other Stocks to Consider

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

Hanesbrands Inc. (HBI - Analyst Report), with Earnings ESP of +1.11% and a Zacks Rank #1 (Strong Buy)

Michael Kors Holdings Limited (KORS - Analyst Report), with Earnings ESP of +1.16% and a Zacks Rank #2 (Buy)

The J. M. Smucker Company (SJM - Analyst Report), with Earnings ESP of +1.83% and a Zacks Rank #3 (Hold)

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.80 +7.04%
BANCO DO BR… BDORY 14.74 +5.66%
AIR INDUSTR… AIRI 9.99 +4.15%
EQT MIDSTRE… EQM 98.14 +3.38%
WEATHERFORD… WFT 23.64 +3.10%