Bed Bath & Beyond Inc. (BBBY), a specialty retailer that offers domestic merchandise and home furnishings, is slated to report second-quarter fiscal 2014 results on Sep 23. In the last quarter, it posted a negative surprise of 2.11%. Let’s see how things are shaping up for this announcement.

Factors Influencing this Past Quarter

The company has been reporting dismal earnings over the past few quarters due to a challenging retail environment, soft sales and cost increases from ongoing long-term investments. Despite these headwinds, we are encouraged by the company’s strategic initiatives toward expanding its store base, investments in improving consumer service and progress in online sales. Therefore, we are apprehensive about the company’s upcoming results.

Earnings Whispers?

Our proven model does not conclusively show that Bed Bath & Beyond 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. However, this is not the case here, as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.14.

Zacks Rank: Bed Bath & Beyond carries a Zacks Rank #2 (Buy). Though this increases our predictive power, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements:

Barnes & Noble, Inc. (BKS) has an Earnings ESP of +5.88% and a Zacks Rank #1 (Strong Buy).

Chipotle Mexican Grill, Inc. (CMG) has an Earnings ESP of +1.56% and a Zacks Rank #2.

BJ's Restaurants, Inc. (BJRI) has an Earnings ESP of +15.39% and a Zacks Rank #2.