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As we’ve profiled extensively in the past, the Wall St. consensus earnings estimates are not an even predictor of actual results. Not only are they usually wrong (which is to be expected of any sort of prediction), they’re consistently wrong in a peculiar way. Certain stocks never seem to miss estimates; that is, earnings and revenue estimates for certain stocks are almost always too low. While academics have been debating the reasons for why this may be happening (see here), we’ve developed a system to determine whether we can use this information to anticipate future earnings day beats.

Our system, which has served us well in the past (see here), is now anticipating a large (5-10%) EPS beat and a small (0-5%) revenue beat tomorrow for Michael Kors Holdings Ltd (NYSE:KORS).

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A quick look at KORS recent EPS history shows that the company hasn’t missed an EPS estimate in over 3 years. It also shows how quickly the company has been growing, and that earnings should be significantly lower this quarter (FQ4 2015) than last. A look at their revenue history shows a similar story:

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Sales have been growing at an impressive clip, and have been consistently outperforming the consensus. With only one miss in the last 10 quarters (FQ2 2013), it’s unlikely that KORS will suddenly miss tomorrow. Management has also done a good job of consistently growing earnings in line with revenue, as shown below:

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Though the trend is downward sloping for both EPS and revenue since FQ3 2014, it’s important to note the scale of this growth. While last quarter’s year-over-year (YoY – FQ3 2015 compared to FQ3 2014) growth rate of 33.33% was less than the previous quarter’s YoY growth rate of 40.85%, it’s still a duly impressive growth rate. The same can be said for last quarter’s revenue growth of 29.88%, especially considering the scale of these sales at $1.3 billion.

At a Wall St. consensus EPS estimate of $0.91, analysts are expecting a YoY earnings growth rate of 16.66% – last year’s FQ4 EPS was reported at $0.78. While 16.66% is an impressive growth rate, it would represent a huge slowdown from last quarter’s 33.33% growth rate. The same is true with revenue. The Wall St. consensus revenue estimate of $1.08B implies that analysts are expecting YoY revenue growth of 17.71% – last year’s FQ4 revenue was reported at $917.45M. Again, though this is an impressive growth rate, it would represent a huge slowdown from last quarter’s 29.88% growth rate.

Finally, before we get to our projections, it’s important to consider by how much KORS has been beating consensus estimates:

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The red line represents the consensus estimate; anything below the line is a miss, and anything above is a beat. KORS hasn’t missed on any estimates in the last 3 years other than 1 revenue miss more than 2 years ago. Last quarter’s EPS beat of 10.45% was low for the firm, and we don’t anticipate a beat much larger than that tomorrow. Last quarter’s revenue beat of 0.98% was also extremely small for the company, and we anticipate a slightly larger beat tomorrow.

To conclude, based on recent trends, we anticipate that KORS will beat EPS by approximately 9% and revenue by 1% when they announce tomorrow morning. These beats do not necessarily imply that the stock will gain tomorrow (the stock price has fallen on earnings day for the last 3 quarters), as the market may have loftier expectations than the Wall St. analysts. It is still worth considering though, as good news (an EPS beat) is a much better development than bad news (an EPS miss.)