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Can Francesca's (FRAN) Spring a Surprise in Q4 Earnings?
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Francesca’s Holdings Corporation is scheduled to release fourth quarter and fiscal 2016 results on Mar 21, 2017. Last quarter, the shoe and apparel retailer reported a positive surprise of 44.4%. In fact, the company surpassed earnings estimates in the trailing four quarters, with the average positive surprise being 26.6%.
What to Expect?
The question looming large on investors’ minds is whether Francesca’s will be able to beat estimates in the quarter to be reported. The current Zacks Consensus Estimate for earnings is pegged at 37 cents, reflecting a year-over-year rise of about 1.4%. We note that the Zacks Consensus Estimate has remained stable over the past 30 days. Meanwhile, analysts polled by Zacks expect revenues of $145.65 million, up over 8% from the year-ago quarter.
Francesca’s operates under the Consumer Discretionary sector. We note that the Consumer Discretionary sector surpassed the broader market in the past three months. While the Zacks categorized sector gained 11%, the S&P 500 Index advanced 6%.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Francesca’s has been delivering higher net sales on a year-over-year basis for the past several quarters. Further, the company’s aggressive store opening strategy is expected to boost the top line in the to-be-reported quarter. The company has further increased focus on boutique remodels and refreshing its existing stocks as an attempt to boost sales. It is also opening stores in underpenetrated markets and enhancing its in-store experience.
Francesca’s also has a strong e-commerce business and is working on improving it. The company has made strategic investments in systems and processes to improve its capabilities and better prepare for the future.
However, shoes and apparel companies like Francesca’s are grappling with headwinds like competition from online sales and declining footfall. Although the company has a strong eCommerce business, it can by no means pose any threat to Amazon.com Inc. (AMZN - Free Report) , which dominates a major part of the eCommerce market.
If we look at the share price movement of the company, we find that the shares have declined 21% in the past three months, underperforming the Zacks categorized Shoes & Retail Apparel industry which has showcased a gain of 11% in the same time frame.
Further, unusually warm weather conditions in some parts of the U.S. are denting sales of winter goods. This is likely to mar sales in the to-be-reported quarter as well.
Earnings Whispers
Our proven model does not conclusively show that Franceca’s 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Its Earnings ESP is 0.00% as both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at 37 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Francesca’s carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement.
Stocks That Warrant a Look
Here are some stocks in the broader consumer discretionary industry that investors may consider which as per our model, have the right combination of elements to post an earnings beat this quarter:
Comcast Corporation (CMCSA - Free Report) , with an Earnings ESP of +2.27% and a Zacks Rank #3.
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Can Francesca's (FRAN) Spring a Surprise in Q4 Earnings?
Francesca’s Holdings Corporation is scheduled to release fourth quarter and fiscal 2016 results on Mar 21, 2017. Last quarter, the shoe and apparel retailer reported a positive surprise of 44.4%. In fact, the company surpassed earnings estimates in the trailing four quarters, with the average positive surprise being 26.6%.
What to Expect?
The question looming large on investors’ minds is whether Francesca’s will be able to beat estimates in the quarter to be reported. The current Zacks Consensus Estimate for earnings is pegged at 37 cents, reflecting a year-over-year rise of about 1.4%. We note that the Zacks Consensus Estimate has remained stable over the past 30 days. Meanwhile, analysts polled by Zacks expect revenues of $145.65 million, up over 8% from the year-ago quarter.
Francesca’s operates under the Consumer Discretionary sector. We note that the Consumer Discretionary sector surpassed the broader market in the past three months. While the Zacks categorized sector gained 11%, the S&P 500 Index advanced 6%.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Francesca’s has been delivering higher net sales on a year-over-year basis for the past several quarters. Further, the company’s aggressive store opening strategy is expected to boost the top line in the to-be-reported quarter. The company has further increased focus on boutique remodels and refreshing its existing stocks as an attempt to boost sales. It is also opening stores in underpenetrated markets and enhancing its in-store experience.
Francesca’s also has a strong e-commerce business and is working on improving it. The company has made strategic investments in systems and processes to improve its capabilities and better prepare for the future.
However, shoes and apparel companies like Francesca’s are grappling with headwinds like competition from online sales and declining footfall. Although the company has a strong eCommerce business, it can by no means pose any threat to Amazon.com Inc. (AMZN - Free Report) , which dominates a major part of the eCommerce market.
If we look at the share price movement of the company, we find that the shares have declined 21% in the past three months, underperforming the Zacks categorized Shoes & Retail Apparel industry which has showcased a gain of 11% in the same time frame.
Further, unusually warm weather conditions in some parts of the U.S. are denting sales of winter goods. This is likely to mar sales in the to-be-reported quarter as well.
Earnings Whispers
Our proven model does not conclusively show that Franceca’s 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Its Earnings ESP is 0.00% as both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at 37 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Francesca’s carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement.
Stocks That Warrant a Look
Here are some stocks in the broader consumer discretionary industry that investors may consider which as per our model, have the right combination of elements to post an earnings beat this quarter:
Cinemark Holdings INc. (CNK - Free Report) , with an Earnings ESP of +2.04% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Comcast Corporation (CMCSA - Free Report) , with an Earnings ESP of +2.27% and a Zacks Rank #3.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>