V.F. Corp (VFC) Q1 Earnings: What's In Store For The Stock?

V.F. Corporation (NYSE:VFC) is scheduled to release first-quarter 2017 results on Apr 28. The big question facing investors is whether this apparel manufacturer and designer will be able to deliver a positive earnings surprise in the quarter to be reported.

V.F. Corp.’s earnings met the Zacks Consensus Estimate in the last reported quarter while it outperformed the same by an average of 2.1% in the trailing four quarters. The Zacks Consensus Estimate for the first-quarter and 2017 has been stable over the last 30 days. However, the current Zacks Consensus Estimate of 55 cents per share for the first quarter reflects a year-over-year decline of 9.8%. Further, analysts polled by Zacks expect revenues of $2.8 billion, down 2.9% from the year-ago quarter.

Factors Influencing this Quarter

V.F. Corp.’s shares gained 8% in the last six months, outperforming the Zacks categorized Textile – Apparel industry’s decline of 13.9%. The company’s focus on strategic buyouts and expansion of global operations emphasize its growth prospects. Also, its solid brand portfolio and opportunities with regard to distribution bode well. Moreover, V.F. Corp.’s recently outlined five-year strategic growth plan provides visibility to the company's efforts to grow business and boost shareholder value.

While these factors make us hopeful about the company’s upcoming results, we cannot ignore the threats posed by foreign currency headwinds. Evidently, currency challenges have been weighing upon its results for quite some time now. Also, adverse currency is expected to linger and hurt results in 2017. Management expects foreign currency woes to hurt 2017 revenues by about two percentage points. Further, the company envisions earnings per share to decline at a low-single digit percentage rate on a year-over-year basis, whereas the same is likely to rise in the mid-single digit rate on a currency neutral basis.

Given the mixed signals, let’s wait and see what’s in store for V.F. Corp. this earnings season.

Earnings Whispers

Our proven model does not conclusively show that V.F. Corp. is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:

Zacks ESP: V.F. Corp. currently has an Earnings ESP of 0.00%. This is because both, the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 55 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: V.F. Corp.’s Zacks Rank #3 increases the predictive power of ESP. However, the company’s Earnings ESP of 0.00% makes surprise prediction difficult.

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

Stocks Poised to Beat Earnings Estimates

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

McDonald's Corporation (NYSE:MCD) , which is expected to report earnings on Apr 28, currently has an Earnings ESP of +3.03% and a Zacks Rank #3.

Sprouts Farmers Market, Inc. (NASDAQ:SFM) , which is scheduled to release earnings on May 4, currently has an Earnings ESP of +3.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) , which is expected to release earnings on May 16, currently has an Earnings ESP of +17.24% and a Zacks Rank #3.

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