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Here's Why V.F. Corp (VFC) is Poised for Earnings Beat in Q4

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V.F. Corporation (VFC - Free Report) is slated to report fourth-quarter fiscal 2021 results on May 21, before the opening bell. The lifestyle apparel designer is expected to have witnessed earnings and sales growth in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at 29 cents per share, which suggests substantial growth from 10 cents reported in the year-ago quarter. Earnings estimates have been unchanged in the past 30 days.

The consensus mark for revenues is pegged at $2.51 billion, indicating growth of 19.3% from the figure reported in the year-ago quarter.

Moreover, the company delivered an earnings surprise of 1.1% in the last reported quarter. Moreover, its earnings outpaced the Zacks Consensus Estimate by 120.5%, on average, in the trailing four quarters.

Key Factors to Note

V.F. Corp has been benefiting from strong business performance in the 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. These are likely to have aided the top line in the holiday period.

Additionally, the company has been witnessing a spike in consumer spending, with growth in apparel and footwear categories in China. The robust China business also resulted in the APAC region returning to growth in the fiscal third quarter. Moreover, the company remains confident of continued momentum in China and retained its earlier guidance of 20% growth in the China business for fiscal 2021. The guidance also indicates that the company has been poised for significant gains in the China business in the fiscal fourth quarter.

V.F. Corporation Price and EPS Surprise

 

V.F. Corporation Price and EPS Surprise

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

On the last reported quarter’s earnings call, management noted that it is on track to return to growth in fourth-quarter fiscal 2021. The company’s results are likely to reflect benefits from the recovery in the COVID-related disruptions on its business and gains from the recently acquired streetwear brand — Supreme. It expects Supreme to contribute $125 million of revenues and 5 cents per share of adjusted earnings in the fourth quarter of fiscal 2021. Further, the company’s progress on its business transformation plans bodes well.

However, increased promotional activities to clear excess inventory are expected to have impacted margins in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model conclusively 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 has a Zacks Rank #3 and an Earnings ESP of +0.43%.

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.

Ralph Lauren Corporation (RL - Free Report) has an Earnings ESP of +6.25% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) presently has an Earnings ESP of +4.69% and a Zacks Rank #3.

NIKE, Inc. (NKE - Free Report) currently has an Earnings ESP of +2.67% and a Zacks Rank #3.

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