We expect Ross Stores Inc. (ROST - Free Report) , a chain of off-price retail apparel and home accessories stores, to beat expectations when it reports second-quarter fiscal 2013 results on Aug 22.
Why a Likely Positive Surprise?
Our proven model shows that Ross Stores may beat the earnings because it has the right combination of two key components.
Positive Zacks ESP: Ross Stores currently has Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +1.08%. This is because the Most Accurate Estimate stands at 94 cents per share, while the Zacks Consensus Estimate is pegged at 93 cents.
Zacks #2 Rank (Buy): Note that stocks with a Zacks Rank #1, 2 and 3 have higher chances of beating the earnings estimate. The Sell rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of Ross Stores’ Zacks Rank #2 (Buy) and Earnings ESP of +1.08% makes us confident of a positive earnings beat on Aug 22.
What is Driving the Better-than-Expected Earnings?
Ross Stores sustained focus on top-line growth and profitability through strategic expansion in the most productive, existing markets, and full implementation of micro-merchandising tools, bodes well for the future. Going forward, the company remains committed to new store growth and maximizing shareholder value as the company boasts of a strong balance sheet.
Further, effective inventory management and strategic investments in merchandize organization will enhance the company’s long-term prospects for future growth and profitability.
Other Stocks to Consider
Ross Stores is not the only firm looking up this earnings season. The following companies are also likely to beat the earnings estimates in the to-be-reported quarter:
Citi Trends, Inc. , Earnings ESP of +2.33% and a Zacks Rank #2 (Buy).
New York & Company Inc. , Earnings ESP of +33.33% and a Zacks Rank #3 (Hold).
Cabela's Incorporated , Earnings ESP of +4.17% and a Zacks Rank #3 (Hold).