Will V.F. Corp (VFC) Deliver A Beat This Earnings Season?

V.F. Corporation (NYSE:VFC) is slated to release results for the transitional period ending Mar 31, 2018, on May 3, before the market opens. As previously announced, the company decided to change its fiscal year-end to the Saturday closest to Mar 31 from the current Saturday closest to Dec 31. This change was effective from Mar 31, 2018.

In the last reported quarter, the designer, manufacturer and marketer of branded apparel and related products delivered a negative earnings surprise of 0.98%. However, the company recorded an average positive surprise of 3.1% in the last four quarters.

What to Expect?

The question lingering on investors’ minds is whether V.F. Corp. will be able to deliver positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the quarter under review is 65 cents per share, reflecting a year-over-year decline of 18.2%. We note that the Zacks Consensus Estimate has been stable ahead of the earnings release. Analysts polled by Zacks anticipate revenues of $2.9 billion, up 12.8% from the year-ago quarter.

Moreover, we note that the stock has outperformed the industry in the past year, where its shares have increased 52.6% while the industry grew 34.7%.

Factors at Play

V.F. Corp. is gaining from its progress on the 2021 growth strategy, which focuses on responding to the changing marketplace while targeting shareholder returns. The company’s focus on this plan is evident from the growth in direct-to-consumer and digital businesses as well as the international segment, which are among the key aspects of the 2021 plan.

Additionally, the company is gaining from strength in the international and direct-to-customer platforms, Outdoor & Action Sports coalition and workwear businesses. Moreover, contributions from the recently-concluded Williamson-Dickie buyout are aiding results. The company’s shareholder-friendly moves also bode well.

V.F. Corp. provided an encouraging view for the transition period. It expects revenues of nearly $2.9 billion, an increase of 16%. This includes a $200-million contribution from the Williamson-Dickie acquisition. Excluding the acquisition, revenues are likely to increase at a high-single-digit rate. The company envisions adjusted earnings per share for the transitional period to be around 65 cents, marking 27% growth, including a contribution of 2 cents from the aforementioned acquisition. Excluding effects of this acquisition, adjusted earnings per share are estimated to increase more than 20%.

However, currency woes, which impacted gross and operating margins in the fourth quarter of 2017, continued to be a hurdle. Further, the company is being troubled by a difficult global economic environment for over a year now.

What the Zacks Model Unveils

Our proven model shows that V.F. Corp. is likely to beat earnings estimates this quarter. 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.

The company’s Earnings ESP of +8.49% and Zacks Rank #3 make us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks Poised to Beat Earnings Estimates

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

Ralph Lauren Corporation (NYSE:RL) has an Earnings ESP of +2.92% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Estee Lauder Companies Inc. (NYSE:EL) has an Earnings ESP of +0.67% and a Zacks Rank #3.

Under Armour, Inc. (NYSE:UAA) has an Earnings ESP of +11.31% and a Zacks Rank #3.

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