These 2 Retail and Wholesale Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks identifies Kohl’s and Kroger as possible upcoming earnings beat candidates based on positive Earnings ESP readings. Kohl’s has a #2 (Buy) rank, a $0.03 Most Accurate Estimate versus consensus of -$0.01, and +460.00% ESP ahead of its November 24, 2026 report; Kroger has a #3 (Hold) rank and estimates of $1.20 versus $1.16 consensus, for +3.43% ESP ahead of its December 3, 2026 report. Zacks says positive ESP combined with a rank of #3 or better produced positive surprises 70% of the time in its historical analysis; neither company has reported results yet.

Analysis

The signal is much weaker than the headline framing implies. Kohl’s +460% ESP is a denominator artifact: moving from a consensus loss of $0.01 to an estimate of $0.03 creates a huge percentage, but only a $0.04/share estimate gap. A beat on such a low base would not establish improving demand, margins, or cash generation. Kroger’s +3.43% estimate gap is more interpretable, but still says little about whether the result or guidance will exceed what the stock already discounts.

For Kohl’s, the key question is whether discretionary demand and promotional intensity permit gross-margin improvement alongside sales; a nominal EPS beat driven by cost cuts or tax effects could be low quality. Weak results could reinforce pressure on department-store peers, while stronger apparel/beauty demand may benefit suppliers—but the article supplies no category or comp data to underwrite that spillover. For Kroger, grocery demand is relatively defensive, but pricing competition from Walmart, Costco, and Albertsons and labor/food-cost pressure can absorb sales gains.

Near-term catalysts are the November 24 Kohl’s and December 3 Kroger reports. In the next 1–3 months, watch comparable sales, gross margin, inventory/promotional commentary, and full-year guidance—not just EPS surprise. Over 6–18 months, sustained margin and cash-flow improvement would matter more than a single beat. The contrarian point: positive estimate revisions can be directionally useful, but a near-zero denominator and a vendor backtest do not establish tradeable risk-adjusted returns; a beat may already be reflected in estimates or fail to lift shares if guidance disappoints.

Key Decisions for Investors

• Do not buy Kohl’s solely on the +460% ESP. Before the report, verify estimate timestamps and revisions, comparable-sales trends, gross-margin expectations, and whether the estimate is on a comparable adjusted basis. Treat it as a watch item, not a stand-alone long signal.
• Kroger is the cleaner of the two estimate signals, but avoid an earnings-chase position absent evidence on comps, gross margin, and guidance. A small, defined-risk event position is only justified if those indicators confirm rather than merely echo the EPS estimate.
• For both reports, define the thesis around guidance and margin quality: a beat paired with weaker comps or lower guidance is a potential sell-the-news outcome. Falsifiers for a bullish view are deteriorating comparable sales, renewed promotional pressure, or a guidance reduction.
• No compelling pair trade from this article alone: Kohl’s and Kroger have materially different demand and margin drivers. Reassess after the releases rather than treating the shared ESP screen as evidence that the two stocks should move together.