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Here's How V.F. Corp is Poised Ahead of Q2 Earnings: Factors to Note
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V.F. Corporation (VFC - Free Report) is likely to register top and bottom-line declines year over year when it posts second-quarter fiscal 2025 results on Oct. 28, after the closing bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.8 billion, indicating a 7.3% decline from the prior-year quarter’s figure.
The consensus estimate for earnings is pegged at 42 cents per share, which indicates a decrease of 33.3% from the year-ago quarter’s figure. The metric has fallen by a penny in the past seven days.
V.F. Corp delivered an earnings surprise of 5.7% in the last reported quarter. In the trailing four quarters, the company’s earnings missed the Zacks Consensus Estimate by a sharp margin.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Key Factors to Influence VFC’s Q2 Results
V.F. Corp’s results are likely to be marred by a tough operating environment, including inflationary pressures. The company has been witnessing soft performance across some regions and channels for a while. VFC’s wholesale business, mainly in the United States, has been witnessing challenges as its major partners have been taking a more cautious approach to forward orders, thus hurting the segment’s results.
V.F. Corp has also been battling softness across its brands like The North Face and Vans. These brands have been experiencing weak sales and struggling to connect with the core customer bases. For The North Face, the issues stem from shifting consumer preferences and increased competition in the outdoor apparel market. The brand has struggled to maintain its premium positioning while appealing to a broader audience. Vans is grappling with a saturated sneaker market and a decline in its appeal among younger customers. These limitations, coupled with elevated promotional activity and higher costs, are likely to have dented VFC’s bottom-line performance .
Management, on its last earnings call, anticipated SG&A expenses to be up slightly year over year in the fiscal second quarter, due to increased spending for the holiday season and reinvestments in its business, offset by Reinvent savings and normalized incentive compensation and inflation. We anticipate sales at Vans and The North Face brands to decline 17.7% and 4.7%, respectively. Our model expects sales in the Americas to fall 6.5% year over year and a fall of 7.3% in wholesale revenues and 6.1% direct-to-consumer revenues.
On the flip side, the company’s transformation program, Reinvent, which targets enhancing focus on brand-building and improving the operating performance, appears encouraging. The plan focuses on four objectives, including improving the North America performance, turning Vans around, reducing costs and strengthening the balance sheet. The company has been managing costs effectively.
What the Zacks Model Unveils for VFC
Our proven model does not conclusively predict 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 before they’re reported with our Earnings ESP Filter.
V.F. Corp has an Earnings ESP of -5.18% and a Zacks Rank #4 (Sell).
V.F. Corp stock is trading at a premium valuation relative to the industry. Going by the price/earnings ratio, VFC stock is currently trading at 20.52 on a forward 12-month basis, higher than 12.84 of the Textile - Apparel industry. Also, it is trading higher than its median of 11.36.
The recent market movements show that VFC’s shares have lost 1.6% in the past three months against the industry's 9.9% growth.
Stocks With the Favorable Combination
Here are three companies, which according to our model, have the right combination of elements to post an earnings beat this season:
LULU is likely to register top-line growth when it reports fiscal third-quarter results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.35 billion, indicating 6.8% growth from the figure reported in the year-ago quarter.
The consensus estimate for LULU’s earnings is pegged at $2.76 a share, implying a 9.1% increase from the year-earlier quarter. LULU has a trailing four-quarter earnings surprise of 7.9%, on average.
Disney (DIS - Free Report) currently has an Earnings ESP of +2.09% and a Zacks Rank of 3. DIS is likely to register bottom and top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $22.6 billion, indicating a 6.4% increase from the figure reported in the year-ago quarter.
The consensus estimate for DIS’ earnings is pegged at $1.09 per share, implying 32.9% growth from the year-ago quarter’s actual. DIS has a trailing four-quarter earnings surprise of 18%, on average.
Ralph Lauren (RL - Free Report) currently has an Earnings ESP of +1.32% and a Zacks Rank of 3. The company is expected to register an increase in the bottom and top lines when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for quarterly earnings per share of $2.39 indicates a rise of 13.8% from the year-ago quarter.
The consensus mark for RL’s revenues is pegged at $1.67 billion, which implies an increase of 2.1% from the year-ago quarter. RL has a trailing four-quarter earnings surprise of 10.3%, on average.
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Here's How V.F. Corp is Poised Ahead of Q2 Earnings: Factors to Note
V.F. Corporation (VFC - Free Report) is likely to register top and bottom-line declines year over year when it posts second-quarter fiscal 2025 results on Oct. 28, after the closing bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.8 billion, indicating a 7.3% decline from the prior-year quarter’s figure.
The consensus estimate for earnings is pegged at 42 cents per share, which indicates a decrease of 33.3% from the year-ago quarter’s figure. The metric has fallen by a penny in the past seven days.
V.F. Corp delivered an earnings surprise of 5.7% in the last reported quarter. In the trailing four quarters, the company’s earnings missed the Zacks Consensus Estimate by a sharp margin.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Key Factors to Influence VFC’s Q2 Results
V.F. Corp’s results are likely to be marred by a tough operating environment, including inflationary pressures. The company has been witnessing soft performance across some regions and channels for a while. VFC’s wholesale business, mainly in the United States, has been witnessing challenges as its major partners have been taking a more cautious approach to forward orders, thus hurting the segment’s results.
V.F. Corp has also been battling softness across its brands like The North Face and Vans. These brands have been experiencing weak sales and struggling to connect with the core customer bases. For The North Face, the issues stem from shifting consumer preferences and increased competition in the outdoor apparel market. The brand has struggled to maintain its premium positioning while appealing to a broader audience. Vans is grappling with a saturated sneaker market and a decline in its appeal among younger customers. These limitations, coupled with elevated promotional activity and higher costs, are likely to have dented VFC’s bottom-line performance .
Management, on its last earnings call, anticipated SG&A expenses to be up slightly year over year in the fiscal second quarter, due to increased spending for the holiday season and reinvestments in its business, offset by Reinvent savings and normalized incentive compensation and inflation. We anticipate sales at Vans and The North Face brands to decline 17.7% and 4.7%, respectively. Our model expects sales in the Americas to fall 6.5% year over year and a fall of 7.3% in wholesale revenues and 6.1% direct-to-consumer revenues.
On the flip side, the company’s transformation program, Reinvent, which targets enhancing focus on brand-building and improving the operating performance, appears encouraging. The plan focuses on four objectives, including improving the North America performance, turning Vans around, reducing costs and strengthening the balance sheet. The company has been managing costs effectively.
What the Zacks Model Unveils for VFC
Our proven model does not conclusively predict 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 before they’re reported with our Earnings ESP Filter.
V.F. Corp has an Earnings ESP of -5.18% and a Zacks Rank #4 (Sell).
V.F. Corporation Price and EPS Surprise
V.F. Corporation price-eps-surprise | V.F. Corporation Quote
Valuation Picture of VFC Stock
V.F. Corp stock is trading at a premium valuation relative to the industry. Going by the price/earnings ratio, VFC stock is currently trading at 20.52 on a forward 12-month basis, higher than 12.84 of the Textile - Apparel industry. Also, it is trading higher than its median of 11.36.
The recent market movements show that VFC’s shares have lost 1.6% in the past three months against the industry's 9.9% growth.
Stocks With the Favorable Combination
Here are three companies, which according to our model, have the right combination of elements to post an earnings beat this season:
lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +7.26% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
LULU is likely to register top-line growth when it reports fiscal third-quarter results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.35 billion, indicating 6.8% growth from the figure reported in the year-ago quarter.
The consensus estimate for LULU’s earnings is pegged at $2.76 a share, implying a 9.1% increase from the year-earlier quarter. LULU has a trailing four-quarter earnings surprise of 7.9%, on average.
Disney (DIS - Free Report) currently has an Earnings ESP of +2.09% and a Zacks Rank of 3. DIS is likely to register bottom and top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $22.6 billion, indicating a 6.4% increase from the figure reported in the year-ago quarter.
The consensus estimate for DIS’ earnings is pegged at $1.09 per share, implying 32.9% growth from the year-ago quarter’s actual. DIS has a trailing four-quarter earnings surprise of 18%, on average.
Ralph Lauren (RL - Free Report) currently has an Earnings ESP of +1.32% and a Zacks Rank of 3. The company is expected to register an increase in the bottom and top lines when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for quarterly earnings per share of $2.39 indicates a rise of 13.8% from the year-ago quarter.
The consensus mark for RL’s revenues is pegged at $1.67 billion, which implies an increase of 2.1% from the year-ago quarter. RL has a trailing four-quarter earnings surprise of 10.3%, on average.