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Dollar General Corporation (DG - Analyst Report) is slated to report its third-quarter fiscal 2013 results on Dec 5, 2013. In the last quarter, it posted a positive surprise of 4.1%. Let’s see how things are shaping up for this announcement.          

Factors this Past Quarter

Dollar General posted better-than-expected second-quarter fiscal 2013 results, driven by a strong performance across the consumables category. Sales of the consumables category continue to improve, primarily buoyed by the introduction of tobacco products and robust sales of perishables and candy and snacks.

Earnings Whispers?

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

Negative Zacks ESP: ESP for Dollar General is -1.43%. This is because the Most Accurate Estimate stands at 69 cents, while the Zacks Consensus Estimate is pegged at 70 cents.

Zacks Rank #3 (Hold): Dollar General’s Zacks Rank #3 (Hold) lowers the predictive power of ESP. The Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with a 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:

Rite Aid Corporation (RAD - Analyst Report), Earnings ESP of +25.00% and a Zacks Rank #1 (Strong Buy).

The Kroger Co. (KR - Analyst Report), Earnings ESP of +1.89% and a Zacks Rank #2 (Buy).

Five Below, Inc. (FIVE - Snapshot Report), Earnings ESP of +25.00% and a Zacks Rank #2 (Buy).

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