After encountering the rough tides arising from the sluggishness witnessed in emerging markets such as China and Brazil, and the fears of challenging economic/political conditions in Europe post Brexit, the U.S. economy looks much steady now, and is geared up for the reporting cycle. The Q3 earnings season is underway, with results from 116 S&P 500 members.

Per the latest Earnings Trends report as of Oct 21, out of the 116 S&P 500 companies that have come up with their quarterly numbers, approximately 80.2% have posted positive earnings surprises, while 62.9% beat top-line expectations. According to the report, earnings for the 116 S&P 500 companies that have reported so far are up 3.3% from the same period last year, while revenues have increased 1.8%.

Further, the report projects that earnings for the total S&P 500 companies will improve 0.1% from the year-ago period, and total revenue will grow 1.5%. Well, as the earnings season gets into groove, the scenario would become much more transparent.

The performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, 7 are expected to witness an earnings decline in the third quarter, with Autos, Oil/Energy and Transportation being a big drag. However, the Consumer Discretionary sector is showing some resilience with total earnings expected to edge down 0.1%, while revenue is anticipated to surge 11.7%.

As of Oct 21, 17.1% of the total number of S&P 500 companies in this sector has reported their results, wherein 83.3% beat both earnings and revenue estimates. While earnings jumped 7% year over year, revenues advanced 8.6%.Apparel is a part of the Consumer Discretionary sector.

Among Apparel stocks lined up to report on Oct 25, let’s take a sneak peek at three companies.

Under Armour, Inc. (UA Quick QuoteUA - Free Report) , the developer, marketer and distributor of branded performance apparel, footwear, and accessories, is slated to report third-quarter 2016 results. The company’s sustained focus on brand development, expansion of its DTC business, product innovation and foray into the technology-based fitness business bode well, as evident from its revenue growth of over 20% for the past 25 straight quarters. At the moment, management envisions net revenue to increase approximately 20% in the third quarter and 24% in 2016.

However, Under Armour anticipates gross margin to be marginally down during third-quarter 2016 and for the full year. The company expects SG&A expense to rise approximately 28% in 2016 owing to investment activities. Additionally, Under Armour projects an increase in interest expense to approximately $32 million in 2016 on account of higher-debt levels. These are likely to weigh on the company’s bottom-line, thus posing concerns. (Read: Can Under Armour Pull a Surprise in Q3 Earnings?).

Our criteria of earnings beat has been let down by an Earnings ESP of 0.00%, as both the Most Accurate estimate and the Zacks Consensus Estimate both stand at 25 cents. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 26%. Under Armour currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Coach, Inc. , the designer and marketer of fine accessories and gifts and house of lifestyle brands is expected to release first-quarter fiscal 2017 results. Coach is undergoing a brand transformation and introducing modern luxury concept stores in key markets. The acquisition of Stuart Weitzman has been accretive to its performance and is being viewed as a significant step in its efforts toward becoming a multi-brand company. Moreover, management has undertaken transformation initiatives revolving around product, stores and marketing, which are likely to have a favorable impact in the quarter to be reported.

These initiatives seem feasible given a mature domestic market, foreign currency headwinds and cautious consumer spending. Coach sells products that are discretionary in nature and consequently depends upon consumers’ disposable income, which is sensitive to macroeconomic factors. Additionally, fashion obsolescence remains the main concern for the company’s business model.

Coach carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. The Zacks Consensus Estimate for the quarter stands at 44 cents. (Read: Coach Q1 Earnings: Stock to Beat Estimates Again?). In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 7.4%.

Another Apparel stock, Rocky Brands, Inc. (RCKY Quick QuoteRCKY - Free Report) is scheduled to release its third-quarter 2016 results. This designer, manufacturer and marketer of footwear and apparel has an Earnings ESP of 0.00% and a Zacks Rank #3. Although, Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat. The Zacks Consensus Estimate for the quarter currently stands at 17 cents. In the trailing four quarters, the company has missed the Zacks Consensus Estimate by an average of 104.3%.

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