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V.F. Corp (VFC) to Report Q3 Earnings: Is a Beat Likely?

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V.F. Corporation (VFC - Free Report) is slated to report third-quarter fiscal 2021 results on Jan 27, before the opening bell. This lifestyle apparel designer player is likely to have witnessed earnings and sales declines in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 88 cents per share, which suggests a decline of 28.5% from the year-ago reported figure. However, earnings estimates have moved up by a penny in the past seven days.

The consensus mark for revenues is pegged at $2.98 billion, indicating a decrease of 11.9% from the figure reported in the year-ago quarter.

Moreover, the company delivered an earnings surprise of 31.4% in the last reported quarter. Moreover, its earnings outpaced the Zacks Consensus Estimate by 120.6%, on average, in the trailing four quarters.

V.F. Corporation Price and EPS Surprise


V.F. Corporation Price and EPS Surprise

V.F. Corporation price-eps-surprise | V.F. Corporation Quote

Key Factors to Note

V.F. Corp has been benefiting from strong business performance in digital channel and across China. 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, it accelerated its digital and hyper-digital business model transformation efforts through additional investments. Moreover, management launched more omni-channel options ahead of the holiday season. These are likely to have aided the top line in the holiday period.

Additionally, it has been benefiting from the reopening of closed stores across the globe. Nearly all its stores have been operational in the reported quarter in the EMEA and APAC regions, including Mainland China. Moreover, the company reopened several other stores in North America in the fiscal second quarter, with nearly all stores in the region now operational. 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 been operational. These factors are likely to have contributed to sales in the fiscal third quarter.

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% for the fiscal second quarter, which suggests a sequential improvement from sales decline of 47.5% in the last reported quarter.

Also, it is on track with the 2024 strategy for transitioning to a consumer-minded and retail-centric business. Further, increased focus on its Asia Pacific business and Emerging Brands platform bode well.

However, lower demand due to the pandemic is expected to have marred the company’s top line to some extent in the fiscal third 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. 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 #2 and an Earnings ESP of +4.76%.

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.

Steven Madden, Ltd. (SHOO - Free Report) has an Earnings ESP of +1.61% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Deckers Outdoor Corporation (DECK - Free Report) currently has an Earnings ESP of +7.61% and a Zacks Rank #2.

Whirlpool Corporation (WHR - Free Report) presently has an Earnings ESP of +4.76% and a Zacks Rank #3.

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