Coach, Inc. COH is scheduled to release third-quarter fiscal 2016 results on Apr 26. The big question facing investors is, whether this designer and marketer of fine accessories and gifts, will be able to continue with its positive earnings surprise streak in the quarter to be reported. The company’s past performance reveals that it surpassed the Zacks Consensus Estimate in the trailing four quarters by an average of 4.9%. Let’s see how things are shaping up for this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Coach is likely to beat earnings estimates 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. Coach has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 41 cents. Coach’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
Factors Influencing this Quarter
Coach’s dwindling bottom-line performance remains the primary concern for investors. A look at the company's performance in fiscal 2015 unveils that earnings per share fell 31.2%, 32.1%, 47.1% and 47.5% year over year in the first, second, third and fourth quarters, respectively. In the first quarter of fiscal 2016, earnings per share plunged 22.6%. In the second quarter too, the figure dropped 5.6% but at a rate lower than the preceding quarters. A mature domestic market, foreign currency headwinds and cautious consumer spending continue to pose concerns.
However, Coach has undertaken transformation initiatives revolving around products, stores and marketing, to bring itself back on the growth trajectory and emerge as a multi-brand company.
Stocks Poised to Beat Earnings Estimates
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:
Beacon Roofing Supply, Inc. BECN has an Earnings ESP of +33.33% and a Zacks Rank #1 (Strong Buy).
Coca-Cola Enterprises, Inc. CCE has an Earnings ESP of +2.50% and a Zacks Rank #2 (Buy).
Cabela's Incorporated CAB has an Earnings ESP of +10.81% and a Zacks Rank #3.
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