The Q2 earnings season has reached its pinnacle as almost 317 S&P 500 members have already announced their results, and investors are still on the lookout for companies that can beat estimates.

Per the latest Zacks Earnings Trends report, as of Jul 29, out of the 317 S&P 500 members that have come up with their quarterly numbers, approximately 72.9% have posted positive earnings surprises while 53.6% beat top-line expectations.   

According to the report, earnings for the 317 S&P 500 companies that have reported so far are down 3.3% from the same period last year, while revenues have edged down 0.9%.

The report further projects that earnings will decrease 3.4% from the year-ago period for the S&P 500 companies and total revenue will fall 0.4%. We observe that this will likely be the fifth straight quarter of earnings decline.

With the earnings season already past the halfway mark, the widely diversified Consumer Discretionary sector has been grabbing much of the spotlight.

Per the latest report (as of Jul 29, 2016), nearly 48.8% of the Consumer Discretionary companies have already reported their second-quarter results, out of which 88.2% beat earnings and 47.1% surpassed revenue estimates. Total earnings for these companies were up 4.1% while revenues inched up 1.9% year over year. Textile-apparel stocks form a part of the Consumer Discretionary sector.

Among the Textile-apparel stocks lined up to report this week, let’s take a sneak peek at two companies.

Coach, Inc. is expected to release fourth-quarter fiscal 2016 results on Aug 2. The question lingering in investors’ minds is whether this designer and marketer of fine accessories and gifts and house of lifestyle brands will be able to continue with its positive earnings surprise streak in the to-be-reported quarter. The company’s past performance reveals that it surpassed the Zacks Consensus Estimate in the trailing four quarters by an average of 6%.

Coach is undergoing a brand transformation and introducing modern luxury concept stores in key markets. The Stuart Weitzman buyout 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. These factors are likely to have a favorable influence on the quarter to be reported. However, Coach sells products that are discretionary in nature, and thus depends upon consumers’ disposable income, which is sensitive to macroeconomic factors.

Coach carries a Zacks Rank #3 (Hold) and has an Earnings ESP of -2.50%. The Zacks Consensus Estimate for the quarter is pegged at 40 cents. (Read more: Coach to Report Q4 Earnings: What's in the Cards?).

Hanesbrands Inc. (HBI Quick QuoteHBI - Free Report) is set to report second-quarter 2016 results on Aug 2, after the market closes. Last quarter, the company posted a positive earnings surprise of 18.18%. In the trailing four quarters, the company delivered in-line results in one quarter, missed estimates in another and surpassed expectations in the other two, with an average beat of 6.24%.

We note that Hanesbrands has been posting decent results over the past few quarters on the back of strategic acquisitions and the success of the Innovate-to-Elevate strategy. The high-margin products that the strategy focuses on, should favor second-quarter margins as well. However, challenging operating environment, macroeconomic uncertainty and unfavorable inventory level may pose problems for the company in the to-be-reported quarter.

Hanesbrands carries a Zacks Rank #2 (Buy) and has an Earnings ESP of 0.00%, as the Most Accurate estimate and the Zacks Consensus Estimate, both stand at 51 cents. Note, earlier the company had an Earnings ESP of -3.77%.  (Read more: Hanesbrands to Report Q2 Earnings: What to Expect?).

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