Zumiez Inc. (ZUMZ Quick QuoteZUMZ - Free Report) is slated to report fourth-quarter fiscal 2016 results on Mar 9. The big question facing investors is, whether this mall-based specialty retailer will be able to deliver a positive earnings surprise in the quarter to be reported.

Last quarter, the company posted a positive earnings surprise of 19.4%. Further, it has outperformed the Zacks Consensus Estimate by an average of 30.9% in the trailing four quarters, recording a beat in each of those quarters. Let’s see how things are shaping up for this announcement.

Factors Influencing this Quarter

Zumiez’s strategic initiatives, focus on omni-channel growth, authentic lifestyle positioning and commitment to customer service positions it well to gain market share in the long term. Further, the recent revival of comps trend and its store growth strategies, along with its ability to generate a strong operating cash flow bode well for the stock.

The company has a record of positive earnings surprises in recent quarters and estimates have been stable lately ahead of the company’s fourth-quarter earnings release. However, the current Zacks Consensus Estimate of 67 cents per share for the fiscal fourth quarter reflects a substantial 25.9% growth from the prior-year quarter. Analysts polled by Zacks expect revenues of $261.7 million for the fiscal fourth quarter, reflecting nearly 8% growth from the year-ago quarter.

Further, Zumiez’s shares have surged about 23.4% in the past six months, substantially outperforming the Zacks categorized Retail–Apparel/Shoe industry’s decline of 12.9% in the same period.

However, the overall retail environment remains troubled due to sluggish mall traffic, volatile consumer spending and macroeconomic uncertainty, which caused management to issue a conservative earnings outlook for the fourth quarter. Despite these challenges, let’s see if the aforementioned optimism can help Zumiez maintain its positive streak this time.

Earnings Whispers

Our proven model does not conclusively show that Zumiez 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:

Zacks ESP: Zumiez currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 67 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Zumiez’ Zacks Rank #2 (Buy) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

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:

Tailored Brands Inc. , slated to report earnings on Mar 8, has an Earnings ESP of +9.09% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fred’s Inc. expected to report earnings on Mar 22, has an Earnings ESP of +21.05% and a Zacks Rank #3 (Hold).

Constellation Brands Inc. (STZ Quick QuoteSTZ - Free Report) expected to report earnings on Apr 5, has an Earnings ESP of +14.29% and a Zacks Rank #3.

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