Avon Products Inc. (AVP - Analyst Report) is slated to report first-quarter 2015 results on Apr 30, before the opening bell. In the last quarter, the company had delivered a negative earnings surprise of 20%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Avon has underperformed the Zacks Consensus Estimate by an average of 5.3% over the past four quarters. The company’s glory has been fading due to continuous loss of active representatives, declining volumes, unfavorable foreign currency translations and reduced margins in mature markets like North America. Also, going forward, management anticipates currency headwinds to linger and hurt sales, making us apprehensive about the company’s upcoming results. Further, weakness in the emerging markets coupled with regulatory and cash flow issues remain concerns.
Earnings Whispers
Our proven model does not conclusively show that Avon is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Avon is currently pegged at -28.57%. This is because the Most Accurate estimate of 5 cents stands below the Zacks Consensus Estimate of 7 cents.
Zacks Rank: Avon carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) 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 this quarter:
Burlington Stores, Inc. (BURL - Snapshot Report) has an Earnings ESP of +2.50% and a Zacks Rank #2 (Buy).
Avon has underperformed the Zacks Consensus Estimate by an average of 5.3% over the past four quarters. The company’s glory has been fading due to continuous loss of active representatives, declining volumes, unfavorable foreign currency translations and reduced margins in mature markets like North America. Also, going forward, management anticipates currency headwinds to linger and hurt sales, making us apprehensive about the company’s upcoming results. Further, weakness in the emerging markets coupled with regulatory and cash flow issues remain concerns.
Earnings Whispers
Our proven model does not conclusively show that Avon is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Avon is currently pegged at -28.57%. This is because the Most Accurate estimate of 5 cents stands below the Zacks Consensus Estimate of 7 cents.
Zacks Rank: Avon carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) 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 this quarter:
Burlington Stores, Inc. (BURL - Snapshot Report) has an Earnings ESP of +2.50% and a Zacks Rank #2 (Buy).
American Eagle Outfitters, Inc. (AEO -Analyst Report) has an Earnings ESP of +18.18% and a Zacks Rank #2.
Best Buy Co., Inc. (BBY - Analyst Report) has an Earnings ESP of +3.45% and a Zacks Rank #3 (Hold).
Best Buy Co., Inc. (BBY - Analyst Report) has an Earnings ESP of +3.45% and a Zacks Rank #3 (Hold).
