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

Zacks Investment Research promotes its Earnings ESP (Expected Surprise Prediction) tool as a method for identifying companies likely to beat quarterly earnings estimates. The tool, which compares the Most Accurate Estimate to the Zacks Consensus Estimate, has historically shown that a positive ESP combined with a Zacks Rank #3 (Hold) or better results in positive earnings surprises 70% of the time and has yielded average annual returns of 28.3% over a decade. Currently, retail and wholesale stocks Urban Outfitters (URBN) and Abercrombie & Fitch (ANF) are highlighted with positive ESPs of +3.60% and +2.97% respectively, suggesting potential earnings beats ahead of their August 2025 reports.

Analysis

According to a quantitative screen using the Zacks Earnings ESP (Expected Surprise Prediction) model, two retail sector stocks, Urban Outfitters (URBN) and Abercrombie & Fitch (ANF), are positioned for a potential earnings beat in their upcoming quarterly reports. The model, which historically identifies positive earnings surprises with 70% accuracy for stocks with a positive ESP and a Zacks Rank of #3 (Hold) or better, flags both companies favorably. Urban Outfitters, reporting on August 20, 2025, holds a #3 (Hold) rank and exhibits a positive Earnings ESP of +3.60%, derived from its Most Accurate Estimate of $1.49 per share versus a Zacks Consensus Estimate of $1.44. Similarly, Abercrombie & Fitch, also a #3 (Hold) stock reporting on August 27, 2025, shows a positive ESP of +2.97%, with its Most Accurate Estimate at $2.33 per share against a consensus of $2.26. The analysis suggests that recent upward revisions by analysts for both firms indicate they may possess new, more accurate information, increasing the probability of surpassing market expectations.

Key Decisions for Investors

• Investors could consider short-term, catalyst-driven positions in URBN and ANF to potentially capitalize on price appreciation following a positive earnings surprise.
• Given that both stocks carry a Zacks Rank of #3 (Hold), which implies performance in-line with the broader market, the potential upside from an earnings beat should be weighed against this neutral fundamental outlook.
• It is prudent to monitor changes to the Most Accurate Estimate for both URBN and ANF as their August 2025 reporting dates approach, as shifts in analyst revisions will directly impact the ESP signal.
• For broader application, investors may find it useful to screen other holdings or sectors using the Earnings ESP filter to identify other potential event-driven trading opportunities ahead of earnings season.