Dillard's (DDS) To Report Q2 Earnings: What To Expect?

Dillard's Inc. (NYSE:DDS) , a department store chain featuring fashion apparel and home furnishings, is expected to report second-quarter fiscal 2016 results on Aug 11. The big question facing investors is, whether the company will be able to post a positive earnings surprise in the quarter to be reported. The company’s past performance reveals that it missed the Zacks Consensus Estimate in the preceding three quarters. Moreover, in the trailing four quarters, it underperformed the Zacks Consensus Estimate by an average of 8.8%. 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 Dillard’s 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. Dillard’s has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 34 cents. The company carries a Zacks Rank #2 (Buy), which increases the predictive power of ESP. However, its ESP of 0.00% makes surprise prediction difficult.

Factors Influencing this Quarter

Dillard’s constant efforts to capitalize on growth opportunities in its brick-and-mortar stores and eCommerce business place it well, as these are likely to help it retain existing customers and attract new ones. The company’s focus on increasing productivity, developing a leading omni-channel platform and enhancing its domestic operations is also expected to support future results.

However, Dillard’s commenced fiscal 2016 on a soft note, with lower-than-expected bottom-line results for the third straight time in the first quarter, while total revenue exceeded the Zacks Consensus Estimate. The company’s outlook for fiscal 2016 indicates significant cost pressures, which might hurt its margins and bottom line. Further, soft economic recovery and stiff competition in the retail merchandise space may prove to be hurdles.

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:

Dean Foods Company (NYSE:DF) has an Earnings ESP of +2.56% and a Zacks Rank #1 (Strong Buy).

Lowe's Companies, Inc. (NYSE:LOW) has an Earnings ESP of +2.84% and a Zacks Rank #2.

Macy's, Inc. (NYSE:M) has an Earnings ESP of +31.71% and a Zacks Rank #3 (Hold).