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Supervalu Inc. (SVU - Analyst Report) is set to report fourth-quarter and fiscal 2014 results on Apr 23. Last quarter, the company posted in-line results. Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

We are encouraged by Supervalu’s turnaround initiatives which helped counter persistent weakness and deliver healthy first-half fiscal 2014 results. We expect another good quarter from Supervalu as it is scheduled to report fourth-quarter results.

Save-a-Lot stores remain the major growth driver for Supervalu and it is in the process of revamping these stores. The company is focusing on the ‘fresh from farm’ department in these stores as the category reported decent sales in the past. We hope these initiatives will help boost the top line in the coming quarter.

However, the company’s margins may be affected in the upcoming quarter, owing to the fair price promotion strategy employed in fiscal 2013, which focuses at competitive pricing. However, we expect the program to help the company gain market share in the longer term.

Moreover, the military distribution segment may witness decline in comps following shutdown of several centers as part of the U.S. government’s sequestration measures. We do not expect the situation to improve in the coming quarter as well.

Earnings Whispers?

Our proven model does not conclusively show that Supervalu 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 estimate. However, that is not the case here due to the following factors:

Zacks ESP: ESP for Supervalu is 0.00%.

Zacks Rank: Supervalu has a Zacks Rank #2 (Buy) which 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 they have the right combination of elements to post an earnings beat this quarter:

Coca Cola Enterprises Inc. (CCE - Analyst Report), Earnings ESP of +2.27% and a Zacks Rank #2.

The Cheesecake Factory Incorporated. (CAKE - Analyst Report), Earnings ESP of +2.04% and a Zacks Rank #3 (Hold).

Church & Dwight Co. Inc. (CHD - Snapshot Report), Earnings ESP of +1.37% and a Zacks Rank #3.

Read the Full Research Report on SVU
Read the Full Research Report on CAKE
Read the Full Research Report on CCE
Read the Full Research Report on CHD


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