Dj Beaten-Up Yeti Stock Looks Like A Buy - Barron'S

The Gap, Inc. GAP is expected to register top and bottom-line decline when it reports fourth-quarter fiscal 2024 results on March 6, after the closing bell. For revenues, the Zacks Consensus Estimate is pegged at $4.07 billion, indicating a 5.4% drop from the year-ago quarter’s figure.

The consensus estimate for the bottom line is pegged at 36 cents per share, indicating a 26.5% decline from the year-ago quarter’s figure. The consensus estimate for fourth-quarter fiscal earnings has been stable in the past 30 days.

The San Francisco, CA-based company has been reporting steady earnings outcomes, as evident from its bottom and top-line surprise trends in the trailing four quarters. GAP has a trailing four-quarter earnings surprise of 101.2%, on average. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 28.6%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Factors Likely to Impact Gap’s Q4 Results

Gap’s quarterly results are likely to reflect the adverse impacts of a volatile macroeconomic landscape, including inflationary pressures and other headwinds. Soft spending patterns on evolving consumer preferences and adverse foreign currency translations are likely to have been other deterrents. The company has been witnessing soft store sales for a while now. We anticipate store and franchise sales to decline 12.7% year over year.

In addition, tough comparisons and weather-related headwinds are likely to hurt results. These factors, coupled with any deleverage in operating and other expenses, are expected to hurt the company’s top and bottom-line results. We expect total revenues to decrease 3.1% year over year at Gap, 6% at Old Navy, 6.2% at Banana Republic and 6.5% at Athleta.

On the flip side, Gap has been smoothly progressing on the reinvigoration of its brands. Management has been committed to creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda and efficiently controlling expenses. Gains from these actions are expected to have somewhat offered a cushion to the company’s performance.

On its last reported quarter’s earnings call, management had anticipated the gross margin to be similar year over year for the fourth quarter of fiscal 2024. This excludes roughly one percentage point of deleveraged ROD from soft sales in the quarter, owing to the absence of the 53rd week.

What the Zacks Model Unveils for GAP

Our proven model predicts an earnings beat for Gap this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Gap currently has an Earnings ESP of +11.55% and a Zacks Rank of 2.

The Gap, Inc. Price and EPS Surprise

The Gap, Inc. price-eps-surprise | The Gap, Inc. Quote

Valuation Picture of GAP Stock

Gap stock is trading at an attractive valuation relative to the industry. Going by the price/earnings ratio, the stock is currently trading at 10.44 on a forward 12-month basis, lower than 18.32 of the industry. Also, it is trading lower than its median of 14.15.

The recent market movements show that Gap’s shares have lost 0.6% in the past six months against the industry's 3.3% growth.

Other Stocks With the Favorable Combination

Here are three more companies, which according to our model, have the right combination of elements to post an earnings beat this season:

Abercrombie & Fitch ANF currently has an Earnings ESP of +0.59% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is likely to register growth in its top and bottom lines when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.6 billion, which indicates an increase of 7.6% from the figure reported in the prior-year quarter.

The consensus estimate for ANF’s earnings per share is pegged at $3.49, indicating an increase of 17.5% from the year-ago quarter’s figure. The consensus mark for earnings has moved down 0.6% in the past seven days. ANF has delivered a trailing four-quarter earnings surprise of 14.8%, on average.

Ulta Beauty, Inc. ULTA has an Earnings ESP of +1.62% and a Zacks Rank of 2 at present. ULTA is likely to register a decline in its top and bottom lines when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.5 billion, which indicates a 2.6% drop from the figure reported in the year-ago quarter.

The consensus estimate for Ulta Beauty’s fourth-quarter earnings is pegged at $7.06 per share, indicating a 12.6% decline from the figure in the year-ago quarter. The consensus mark for earnings has moved down a penny in the past 30 days. ULTA has delivered an earnings beat of 6.2%, on average, in the trailing four quarters.

DICK'S Sporting Goods, Inc. DKS currently has an Earnings ESP of +0.98% and a Zacks Rank of 2. DKS is expected to report a decline in its top and bottom lines when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.75 billion, which indicates a 3.3% decrease from the figure in the year-ago quarter.

The consensus estimate for DICK'S fiscal fourth-quarter earnings is pegged at $3.47 per share, down 9.9% from the year-ago quarter. The consensus mark for earnings has moved up 0.6% in the past 30 days. DKS has delivered a trailing four-quarter earnings surprise of 11.4%, on average.

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Ross Stores, Inc. ROST is expected to register a decline in its top and bottom lines when it reports fourth-quarter fiscal 2024 earnings on March 4, after market close. The Zacks Consensus Estimate for earnings is pegged at $1.65 per share, suggesting a 9.3% drop from $1.82 reported in the year-earlier period. The consensus mark has been unchanged in the past 30 days.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Ross Stores, Inc. Price, Consensus and EPS Surprise

Ross Stores, Inc. price-consensus-eps-surprise-chart | Ross Stores, Inc. Quote

The consensus estimate for quarterly revenues is pegged at $5.95 billion, indicating a decline of 1.2% from the year-ago quarter’s reported figure.

ROST has a trailing four-quarter earnings surprise of 8.5%, on average. In the last reported quarter, the company posted an earnings surprise of 6.5%.

Earnings Whispers for ROST Stock

Our proven model conclusively predicts an earnings beat for Ross Stores this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Ross Stores currently has an Earnings ESP of +2.26% and a Zacks Rank of 3.

Key Factors to Influence ROST’s Q4 Results

Ross Stores’ quarterly performance is expected to have been bolstered by strong growth across its merchandise categories, driven by positive customer responses across both banners. The company’s ability to offer value-driven bargains continues to resonate with price-conscious consumers, particularly in an environment where discretionary spending remains cautious.

Ross Stores is expected to benefit from its off-price retail model to attract value-focused shoppers. Additionally, its micro-merchandising strategy optimizes product allocation, ensuring inventory aligns with regional consumer preferences and supports margins. The company’s proven business model is likely to drive higher traffic, robust same-store sales growth and improved profitability.

Consistent execution of store expansion plans is also expected to have supported top-line growth. These efforts have focused on expanding penetration in existing and new markets, with contributions from new stores anticipated to be reflected in the to-be-reported quarter’s results.

However, Ross Stores has been cautious regarding the ongoing macroeconomic and geopolitical uncertainties and persistent inflation, which have been impacting consumer spending on essentials like housing, food and gasoline.

On its last reported quarter’s earnings call, management emphasized that ROST’s core customer base, primarily low-to-moderate-income shoppers, has been burdened by high costs for necessities. These inflationary pressures have been limiting discretionary spending and reducing the demand for the company’s brands.

As a result, Ross Stores expects total sales to drop 1-3% year over year in the fiscal fourth quarter. It forecasts an operating margin of 11.2-11.5%, down from the 12.4% recorded last year. This view reflects a soft merchandise margin as the company has been increasing the penetration of premium branded merchandise, somewhat offset by lower incentive and freight costs.

Our model expects a year-over-year sales decline of 1.7% and a comps rise of 2.4% for the fiscal fourth quarter.

ROST’s Stock Price Performance & Valuation Picture

From a valuation perspective, Ross Stores is trading at a discount relative to industry benchmarks. The company has a forward 12-month price-to-earnings of 20.66x, which is below the five-year high of 79.52x and lower than the Retail-Discount Stores industry’s average of 32.53x.

The recent market movements show that ROST’s shares have declined 10.4% in the past three months against the industry's 2.7% growth.

ROST Stock Performance in the Past Three Months

Nordstrom, Inc. JWN is expected to report a decline in both top and bottom lines when it reports its fourth-quarter fiscal 2024 results on March 4, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $4.29 billion, which indicates a decline of 2.9% from the prior-year reported figure.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Nordstrom, Inc. Price, Consensus and EPS Surprise

Nordstrom, Inc. price-consensus-eps-surprise-chart | Nordstrom, Inc. Quote

The consensus mark for earnings has decreased by a penny in the past seven days to 90 cents per share, indicating a decline of 6.3% from 96 cents reported in the year-ago period.

In the last reported quarter, the company surpassed earnings estimates by 43.5%. Nordstrom has delivered a trailing four-quarter negative earnings surprise of 30.03%, on average.

Earnings Whispers for JWN Stock

Our proven model conclusively predicts an earnings beat for Nordstrom this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Nordstrom has an Earnings ESP of +14.99% and a Zacks Rank of 2 at present.

Factors to Consider Ahead of JWN’s Upcoming Results

Nordstrom has been enhancing its digital capabilities to drive growth and improve customer engagement. The company continues to leverage technology to optimize operations, refine inventory management and create seamless shopping experiences. These initiatives are expected to aid performance in the to-be-reported quarter.

Additionally, Nordstrom’s fourth-quarter results are expected to reflect gains from its digital-first approach to better serve customers, expand market share and achieve profitable growth.

The holiday season is a crucial selling period for retailers across the world. In January 2025, Nordstrom reported strong results for the holiday season, reflecting a total company net sales increase of 4.9% and a comparable sales increase of 5.8% for the nine-week holiday period ending Jan. 4, 2025. The robust holiday results exceeded the company's cautious expectations, driven by increased consumer engagement and successful sales strategies during the holiday season.

Based on the stronger-than-anticipated holiday shopping performance across its stores and online platforms, JWN has raised its fiscal 2024 sales outlook. The revised fiscal 2024 also suggests stronger revenue performance in the fourth quarter, driven by better-than-expected holiday sales and momentum across its store banners and digital platforms.

The company expects revenue growth of 1.5% to 2.5% for fiscal 2024, including retail sales and credit card revenues. Revenues for the Nordstrom Rack banner are projected to grow 7.6% year over year, offsetting the expected decline of 0.9% for the Nordstrom banners. However, the company expects the absence of the 53rd week this year to hurt the top line by 135 basis points.

Our model predicts revenues to decline 5.3% year over year at Nordstrom and remain flat year over year at Nordstrom Rack in the fourth quarter. For fiscal 2024, revenues are expected to decline 0.9% at Nordstrom and improve 7.6% at Nordstrom Rack.

For fiscal 2024, the company expects comparable sales growth of 2.5-3.5% versus the 52 weeks in fiscal 2023, compared with its prior outlook of 1% to 2% growth.

Nordstrom has been making efforts to enhance customer experience through faster delivery. Hence, the company remains focused on operational optimization. JWN continues seeking additional efficiencies in flow and improved productivity through inventory management initiatives. These upsides are likely to have aided fourth quarter results.

However, Nordstrom has been facing ongoing challenges such as competitive pressures, high operating costs, inflation and evolving consumer spending trends. The company has been experiencing elevated selling, general and administrative (SG&A) expenses in recent quarters, primarily driven by higher labor costs and a charge related to accelerated technology depreciation. The elevated SG&A expenses are expected to have slightly weighed on margins in the to-be-reported quarter.

JWN’s Price Performance & Valuation

JWN shares have exhibited an uptrend, increasing as much as 10.5% in the past six months. The stock has outperformed the broader industry’s growth of 4%.

From a valuation standpoint, JWN offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings of 12.05x, the industry’s average of 18.32x, the stock offers compelling value for investors seeking exposure to the sector.

JWN Stock's Performance in the Past Six Month