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We expect Zumiez Inc. (ZUMZ - Analyst Report), a Wash.-based retailer of sports-related teen apparel, to beat expectations when it reports first-quarter fiscal 2013 results on May 23.

Why a Likely Positive Surprise?

Our proven model shows that Zumiez may beat earnings because it has the right combination of 2 key components.

Positive Zacks ESP: Zumiez currently has Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +8.33%. This is because the Most Accurate Estimate stands at 13 cents per share, while the Zacks Consensus Estimate is pegged at 12 cents.

Zacks #2 Rank (Buy): Note that stocks with a Zacks Rank #1, 2 and 3 have higher chances of beating earnings. The Sell rated stocks (#4 and 5) should never be considered going into an earnings announcement.

The combination of Zumiez’s Zacks Rank #2 (Buy) and Earnings ESP of +8.33% makes us confident of a positive earnings beat on May 23.

What is Driving the Better-than-Expected Earnings?

Zumiez’s strategy relies on offering action-sports merchandise focused on young men and women in the age of group of 12–24, which has enabled the company to carve a distinct niche for itself. Furthermore, the company’s stores are strategically located in busy areas of the mall, such as food courts, movie theatres and music/game stores, which are frequently visited by its target customers. We also believe that Zumiez’s initiatives such as store opening programs and the acquisition of Blue Tomato has provided it a solid platform to capitalize on the emerging opportunities.

The company has surpassed the Zacks Consensus Estimate in the trailing 4 quarters with an average surprise of approximately 19.6%.

Other Stocks to Consider

Zumiez is not the only firm we are looking up to this earnings season. The following companies are also likely to beat the earnings in the to-be-reported quarter:

Foot Locker Inc. (FL - Snapshot Report) with an Earnings ESP of +2.30% and a Zacks Rank #2 (Buy).

PVH Corp. (PVH - Analyst Report) with Earnings ESP of +0.73% and a Zacks Rank #3 (Hold).

Fifth & Pacific Companies Inc. has an Earnings ESP of +10.00% and a Zacks Rank #3 (Hold).

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