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Apparel Stocks Q2 Earnings Queued Up for This Week: SKX, VFC
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Time flies and how. It seems that the first-quarter earnings season had just pulled its curtains down and we are already into the next earnings season. After all the market volatility caused by Brexit, the whistle has been blown for the Q2 earnings season, shifting investors’ focus right here.
While still in the early phase, the results announced so far give us a decent picture. Evidently, out of the 36 S&P 500 members that have come up with their quarterly numbers, approximately 66.7% have posted positive earnings surprises, while 41.7% surpassed top-line expectations – per the latest Zacks Earnings Trends report as of Jul 15. However, earnings for these companies are down 3.9% from the same period last year, while revenues have dipped 0.1%.
Among the 16 Zacks sectors which together decide the fate of the index, 9 are anticipated to post a year-over-year decline in earnings in the second quarter. Once again, Oil/Energy is expected to cause most of the damage, with Basic Materials, Industrial Products and Transportation also being a drag.
The Consumer Discretionary sector, however, looks bright currently. As of Friday, 5.7% of the total number of S&P 500 companies in this sector had reported their results, wherein all delivered an earnings beat and about half cruised ahead of revenue estimates. While earnings surged 15.2% year over year, revenues advanced 5.1%.
Taking a look at the forecasts, total earnings for the Consumer Discretionary sector are expected to drop 1.3%, whereas revenues are anticipated to increase 3.4%. Such projections even in the face of foreign currency fluctuations, uncertainties looming over the Fed’s rate hike decision and volatile commodity prices, highlight the strength of this sector, which mainly runs on consumer behavior.
However, the show has just begun and hence, it’s better to wait and see if this sector, which houses major apparel stocks, can keep its solid streak alive. In the meantime, let’s catch a glimpse of a couple of apparel stocks, lined up for earnings releases this week.
Skechers U.S.A., Inc. (SKX - Free Report) , the designer, developer and marketer of footwear, is slated to report second-quarter 2016 results on Jul 21. The company also sells branded apparel, toys, and more accessories through licensing deals. We believe that with added emphasis on the new line of products, store openings, cost containment efforts, inventory management, a global distribution platform, multi-brand strategy and strong backlogs, Skechers remains well positioned to sustain its growth momentum. However, the competitive retail landscape and foreign currency headwinds may weigh upon its performance in the quarter to be reported.
Notably, the company’s past performance reveals that in the trailing four quarters, it outperformed the Zacks Consensus Estimate by an average of 21%. However, the company, which has an Earnings ESP of 0.00%, recently got downgraded from a Zacks Rank #3 (Hold) to a Zacks Rank #4 (Sell). (Read more: Skechers Q2 Earnings: What's in Store for the Stock?))
Next, let’s take a sneak peek at designer, manufacturer and marketer of branded apparel and related products – V.F. Corporation (VFC - Free Report) . The company, which is slated to release second-quarter 2016 results on Jul 22, has underperformed the Zacks Consensus Estimate by an average of 0.8% over the trailing four quarters.
V.F. Corp., which has been battling adverse foreign currency fluctuations for a while now, expects these headwinds to persist and hurt results. This is evident from its 2016 outlook, wherein currency translations are anticipated to have a 1 percentage point and 70 basis points negative impact on revenues and gross margin, respectively. Further, while currency neutral earnings are expected to increase 11%, reported earnings are projected to improve only 5%. This Zacks Rank #4 company currently has an Earnings ESP of 0.00%. (Read more: Will Currency Woes Subdue V.F. Corp’s Q2 Earnings?)
So, do check back on our full write-up on earnings releases of these stocks.
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Apparel Stocks Q2 Earnings Queued Up for This Week: SKX, VFC
Time flies and how. It seems that the first-quarter earnings season had just pulled its curtains down and we are already into the next earnings season. After all the market volatility caused by Brexit, the whistle has been blown for the Q2 earnings season, shifting investors’ focus right here.
While still in the early phase, the results announced so far give us a decent picture. Evidently, out of the 36 S&P 500 members that have come up with their quarterly numbers, approximately 66.7% have posted positive earnings surprises, while 41.7% surpassed top-line expectations – per the latest Zacks Earnings Trends report as of Jul 15. However, earnings for these companies are down 3.9% from the same period last year, while revenues have dipped 0.1%.
Among the 16 Zacks sectors which together decide the fate of the index, 9 are anticipated to post a year-over-year decline in earnings in the second quarter. Once again, Oil/Energy is expected to cause most of the damage, with Basic Materials, Industrial Products and Transportation also being a drag.
The Consumer Discretionary sector, however, looks bright currently. As of Friday, 5.7% of the total number of S&P 500 companies in this sector had reported their results, wherein all delivered an earnings beat and about half cruised ahead of revenue estimates. While earnings surged 15.2% year over year, revenues advanced 5.1%.
Taking a look at the forecasts, total earnings for the Consumer Discretionary sector are expected to drop 1.3%, whereas revenues are anticipated to increase 3.4%. Such projections even in the face of foreign currency fluctuations, uncertainties looming over the Fed’s rate hike decision and volatile commodity prices, highlight the strength of this sector, which mainly runs on consumer behavior.
However, the show has just begun and hence, it’s better to wait and see if this sector, which houses major apparel stocks, can keep its solid streak alive. In the meantime, let’s catch a glimpse of a couple of apparel stocks, lined up for earnings releases this week.
Skechers U.S.A., Inc. (SKX - Free Report) , the designer, developer and marketer of footwear, is slated to report second-quarter 2016 results on Jul 21. The company also sells branded apparel, toys, and more accessories through licensing deals. We believe that with added emphasis on the new line of products, store openings, cost containment efforts, inventory management, a global distribution platform, multi-brand strategy and strong backlogs, Skechers remains well positioned to sustain its growth momentum. However, the competitive retail landscape and foreign currency headwinds may weigh upon its performance in the quarter to be reported.
SKECHERS USA-A Price and EPS Surprise
SKECHERS USA-A Price and EPS Surprise | SKECHERS USA-A Quote
Notably, the company’s past performance reveals that in the trailing four quarters, it outperformed the Zacks Consensus Estimate by an average of 21%. However, the company, which has an Earnings ESP of 0.00%, recently got downgraded from a Zacks Rank #3 (Hold) to a Zacks Rank #4 (Sell). (Read more: Skechers Q2 Earnings: What's in Store for the Stock?))
Next, let’s take a sneak peek at designer, manufacturer and marketer of branded apparel and related products – V.F. Corporation (VFC - Free Report) . The company, which is slated to release second-quarter 2016 results on Jul 22, has underperformed the Zacks Consensus Estimate by an average of 0.8% over the trailing four quarters.
V F CORP Price and EPS Surprise
V F CORP Price and EPS Surprise | V F CORP Quote
V.F. Corp., which has been battling adverse foreign currency fluctuations for a while now, expects these headwinds to persist and hurt results. This is evident from its 2016 outlook, wherein currency translations are anticipated to have a 1 percentage point and 70 basis points negative impact on revenues and gross margin, respectively. Further, while currency neutral earnings are expected to increase 11%, reported earnings are projected to improve only 5%. This Zacks Rank #4 company currently has an Earnings ESP of 0.00%. (Read more: Will Currency Woes Subdue V.F. Corp’s Q2 Earnings?)
So, do check back on our full write-up on earnings releases of these stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>