CHICAGO, July 1, 2014 /PRNewswire/ -- Zacks Equity Research highlights Red Robin Gourmet Burgers (Nasdaq:RRGB-Free Report) as the Bull of the Day and DSW (NYSE:DSW-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onKate Spade & Company (NYSE:KATE-Free Report), General Electric Company (NYSE:GE-Free Report) and Adobe Systems Inc. (Nasdaq:ADBE-Free Report).
Here is a synopsis of all five stocks:
2014 has been an extremely tough year for the restaurant industry as heavy competition and changing customer tastes led to slumping stock prices for many names in the sector. Yet while it has certainly been difficult as of late, a few companies are well-positioned for gains in this space, and may be ready to surprise investors in the second half of the year.
In particular, a small cap burger company based out of Colorado, Red Robin Gourmet Burgers (Nasdaq:RRGB-Free Report), could be worth a closer look in this regard. RRGB has proven to be an all-star in earnings season, and there is plenty of reason to believe that this trend can continue in its upcoming earnings report too.
In RRGB's last earnings report, the company easily beat the Zacks Consensus Estimate, outpacing this figure by about 12.3%. This reported EPS was also 24.2% higher than the year ago numbers, while revenues were also higher as well.
This strong earnings beat was a bit of a surprise since inclement weather was a culprit for the weak performances by many other companies in the space for the period. RRGB appears to be bucking the trend in the sector, and given its big expansion plans, it could continue to post strong results in the near term.
But before investors think that the latest earnings beat by RRGB was a fluke, consider that the stock has beaten estimates in each quarter for the past three years, so clearly the company knows how to rise to the occasion. Plus, in the last four quarters, the average beat was about 13.15%, underscoring the fact that RRGB isn't just squeaking by, but is easily getting by the earnings estimate hurdles.
While DSW (NYSE:DSW-Free Report)stores might be a fashionable place to pick up a new pair of shoes, the stock probably doesn't look great in your portfolio. The company has been under severe competitive pressure this year, while unfavorable weather trends haven't helped matters either.
In fact, shares of the embattled retailer have plunged by about 35% YTD, including a 20% slump in the past quarter alone. The vast majority of these losses came following a terrible earnings report from DSW in which the company both missed estimates, and showed a 16% earnings slump year-over-year.
For the most recent earnings report, DSW posted earnings of 42 cents a share, missing the Zacks Consensus Estimate of 48 cents a share. While this miss was obviously unwelcomed news, the real pain arguably came from news that comparable store sales were declining at a rate of 3.7% year-over-year, while the firm also expects comparable store sales to decline by a low single-digit rate this fiscal year too.
And thanks to these declining comparables, the company gave earnings guidance of between $1.45-$1.60/share for fiscal 2014. But since the Zacks Consensus Estimate was at $1.89/share before this report, investors sold-off shares of DSW in droves while analysts raced to slash their full year estimates on this stock as well.
Estimates have actually moved universally lower in the past two months in response to this DSW news, pushing the company's growth rates deep into contraction levels. The company is now poised to see earnings fall by 36% for the current quarter (year-over-year), while current year earnings are expected to contract by just over 19%.
Additional content:
Kate Spade Announces New Director
Accessories and apparel retailerKate Spade & Company (NYSE:KATE-Free Report) recently elected Doug Mack to its management board, taking its tally to 11.
Mack has a tangible experience in diverse fields such as marketing, technology and customer service. Gifted with e-commerce innovating skills, Mack assumed charge as one of the directors of the company with immediate effect. His term will cease with the company's Annual Shareholders' Meet in 2015.
A graduate from Boston University, Mack commenced his professional path as General Electric Company (NYSE:GE-Free Report) management trainee, from where he eventually became the engagement manager at McKinsey & Company.
Mack also joined the billion dollar e-commerce retailer Fanatics, Inc. as Chief Executive Officer (CEO) in Apr 2014. Prior to this, Mack served as CEO in various online companies including One Kings Lane, Scene7 and Adobe Systems Inc. (Nasdaq:ADBE-Free Report), where he was the General Manager of the digital media segment.
With such enriched knowledge in the world of technology, Mack is likely to be an asset for the company and is likely to take it forward in the omni-channel space.
Kate Space recently announced robust first quarter 2014 results where in its adjusted loss from continuing operations narrowed to 6 cents a share from 16 cents in the prior year quarter. However, the loss was wider than the Zacks Consensus Estimate of 4 cents.
Moreover, benefitting from an additional week and a 43% surge in comparable store sales, the company's net sales from continuing operations jumped 33.5% to $328.1 million. Net sales also cruised way ahead of the Zacks Consensus Estimate of $199.0 million.
Kate Spade currently carries a Zacks Rank #3 (Hold).
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on RRGB - FREE
Get the full Report on DSW - FREE
Get the full Report on KATE - FREE
Get the full Report on GE - FREE
Get the full Report on ADBE - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
SOURCE Zacks Investment Research, Inc.
Share this article