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Will V.F. Corp (VFC) Continue Its Earnings Beat Trend in Q2?
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V.F. Corporation (VFC - Free Report) is slated to report second-quarter fiscal 2021 results on Oct 16, before the opening bell. This lifestyle apparel designer player delivered an earnings surprise of 16.2% in the last reported quarter. Moreover, the company’s earnings outpaced the Zacks Consensus Estimate by 112%, on average, in the trailing four quarters.
The Zacks Consensus Estimate for fiscal second-quarter earnings is 49 cents per share, which suggests a decline of 61.1% from the year-ago reported figure. However, the earnings estimate has moved up by a penny in the past seven days. The consensus mark for revenues is pegged at $2.48 billion, indicating a decrease of 27% from the figure reported in the year-ago quarter.
Key Factors to Note
V.F. Corp has been witnessing improvements in its international business, as the stores across the globe began reopening from the middle of June. The company reopened the majority of its stores through the end of June and witnessed encouraging trends in the core outdoor, active and athletic categories. Moreover, its wholesale customers in APAC, North America and EMEA have re-opened most of their retail stores. Additionally, its supply chain and distribution centers have started their operations. This is expected to have aided the top line in second-quarter fiscal 2021.
In the last reported quarter’s earnings call, the company noted that these improving trends continued into July, despite the re-closure of stores in some parts of the United States due to the resurgence of COVID-19. It also predicted a revenue decline of less than 25% in the fiscal second quarter, which suggests a sequential improvement from the year-over-year sales decline of 47.5% in the last reported quarter.
Moreover, the company has been witnessing robust trends in its digital businesses due to the increased consumer shift to digital platforms amid the pandemic. Driven by these trends, the company accelerated its digital and hyper-digital business model transformation efforts through additional investments. Notably, it allotted 80% of its total investments in fiscal 2021 for enhancing digital capabilities. In the to-be-reported quarter, the company’s digital business is likely to have witnessed gains from the launch of buy online, pickup in store (BOPUS) and ship from store capabilities in the majority of its stores in the United States as well as in the North Face stores in EMEA.
However, the lower demand due to the pandemic is expected to mar the company’s top line to some extent, which is evident from the sales decline projection for the second quarter. Moreover, increased promotional activity to clear excess inventory is expected to have impacted margins in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for V.F. Corp this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
V.F. Corp carries a Zacks Rank #3 and an Earnings ESP of +8.16%.
Other Stocks With Favorable Combinations
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.
Whirlpool Corporation (WHR - Free Report) presently has an Earnings ESP of +9.25% and a Zacks Rank #2.
Deckers Outdoor Corporation (DECK - Free Report) currently has an Earnings ESP of +5.43% and a Zacks Rank #2.
Zacks’ 2020 Election Stock Report:
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.
Image: Bigstock
Will V.F. Corp (VFC) Continue Its Earnings Beat Trend in Q2?
V.F. Corporation (VFC - Free Report) is slated to report second-quarter fiscal 2021 results on Oct 16, before the opening bell. This lifestyle apparel designer player delivered an earnings surprise of 16.2% in the last reported quarter. Moreover, the company’s earnings outpaced the Zacks Consensus Estimate by 112%, on average, in the trailing four quarters.
The Zacks Consensus Estimate for fiscal second-quarter earnings is 49 cents per share, which suggests a decline of 61.1% from the year-ago reported figure. However, the earnings estimate has moved up by a penny in the past seven days. The consensus mark for revenues is pegged at $2.48 billion, indicating a decrease of 27% from the figure reported in the year-ago quarter.
Key Factors to Note
V.F. Corp has been witnessing improvements in its international business, as the stores across the globe began reopening from the middle of June. The company reopened the majority of its stores through the end of June and witnessed encouraging trends in the core outdoor, active and athletic categories. Moreover, its wholesale customers in APAC, North America and EMEA have re-opened most of their retail stores. Additionally, its supply chain and distribution centers have started their operations. This is expected to have aided the top line in second-quarter fiscal 2021.
In the last reported quarter’s earnings call, the company noted that these improving trends continued into July, despite the re-closure of stores in some parts of the United States due to the resurgence of COVID-19. It also predicted a revenue decline of less than 25% in the fiscal second quarter, which suggests a sequential improvement from the year-over-year sales decline of 47.5% in the last reported quarter.
Moreover, the company has been witnessing robust trends in its digital businesses due to the increased consumer shift to digital platforms amid the pandemic. Driven by these trends, the company accelerated its digital and hyper-digital business model transformation efforts through additional investments. Notably, it allotted 80% of its total investments in fiscal 2021 for enhancing digital capabilities. In the to-be-reported quarter, the company’s digital business is likely to have witnessed gains from the launch of buy online, pickup in store (BOPUS) and ship from store capabilities in the majority of its stores in the United States as well as in the North Face stores in EMEA.
V.F. Corporation Price and EPS Surprise
V.F. Corporation price-eps-surprise | V.F. Corporation Quote
However, the lower demand due to the pandemic is expected to mar the company’s top line to some extent, which is evident from the sales decline projection for the second quarter. Moreover, increased promotional activity to clear excess inventory is expected to have impacted margins in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for V.F. Corp this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
V.F. Corp carries a Zacks Rank #3 and an Earnings ESP of +8.16%.
Other Stocks With Favorable Combinations
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.
Tapestry, Inc. (TPR - Free Report) currently has an Earnings ESP of +22.17% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Whirlpool Corporation (WHR - Free Report) presently has an Earnings ESP of +9.25% and a Zacks Rank #2.
Deckers Outdoor Corporation (DECK - Free Report) currently has an Earnings ESP of +5.43% and a Zacks Rank #2.
Zacks’ 2020 Election Stock Report:
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.
Check out the 2020 Election Stock Report >>