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

Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

The Zacks Earnings ESP, Explained

The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.

Should You Consider Burlington Stores?

Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Burlington Stores (BURL) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $2.22 a share, just one day from its upcoming earnings release on August 27, 2026.

By taking the percentage difference between the $2.22 Most Accurate Estimate and the $2.18 Zacks Consensus Estimate, Burlington Stores has an Earnings ESP of +1.84%. Investors should also know that BURL is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

BURL is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Dollar Tree (DLTR) is another qualifying stock you may want to consider.

Dollar Tree is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on August 27, 2026. DLTR's Most Accurate Estimate sits at $1.13 a share one day from its next earnings release.

For Dollar Tree, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.12 is +0.98%.

BURL and DLTR's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

Should You Invest in Burlington Stores, Inc. (BURL)?

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

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