V.F. Corporation (VFC Quick QuoteVFC - Free Report) is likely to register year-over-year bottom and top-line declines when it posts third-quarter fiscal 2025 earnings on Jan. 29, before the opening bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.8 billion, indicating a 7.2% decline from the prior-year quarter’s figure.

The consensus estimate for earnings is pegged at 34 cents per share, which indicates a plunge of more than 40% from the year-ago quarter’s figure. However, the metric has risen a penny in the past 30 days.

V.F. Corp. delivered an earnings surprise of 46.3% in the last reported quarter. In the trailing four quarters, the company’s earnings missed the Zacks Consensus Estimate by a sharp margin.

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Key Factors to Influence VFC’s Q3 Results

V.F. Corp.’s results are likely to be hurt by a challenging operating backdrop, including the inflationary pressures. The company has been witnessing soft performance in a few 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 results. Its direct-to-consumer (DTC) business has also not been performing well. Our model expects Americas sales to fall 11.3% year over year and a fall of 0.7% in wholesale revenues and 11.5% in DTC revenues .

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. We anticipate sales at Vans and The North Face brands to decline 8.7% and 5.9%, respectively, for the said quarter.

Such limitations, coupled with elevated promotional activity and higher costs, are likely to have dented VFC’s bottom-line performance. Management, in its last earnings call, had projected revenues to be in the bracket of $2.7-$2.75 billion, down 1-3% year over year for the third quarter of fiscal 2025. This is inclusive of an estimated negative foreign exchange impact of about 100 basis points. It had anticipated adjusted operating income to be in the band of $170-$200 million, down from $218 million delivered in the year-earlier quarter. Selling, general and administrative costs are anticipated have increased modestly year over year on the reintroduction of incentive compensation.

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, Vans’ turnaround, reducing costs and strengthening the balance sheet. The company has been managing costs effectively as well.

What the Zacks Model Unveils for VFC

Our proven model predicts a likely 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 chance of an earnings beat. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

V.F. Corp. has an Earnings ESP of +4.30% and a Zacks Rank of 1.

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 31.18 on a forward 12-month basis, higher than 14.72 of the Textile - Apparel industry. Also, it is trading higher than its median of 17.13.

The recent market movements show that VFC’s shares have surged 53.9% in the past three months compared with the industry's 17.1% growth.

More Stocks Poised to Beat Earnings Estimates

Here are three other companies, which according to our model, have the right combination of elements to post an earnings beat this season:

lululemon athletica (LULU Quick QuoteLULU - Free Report) currently has an Earnings ESP of +0.62% and a Zacks Rank of 2. 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 fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.6 billion, indicating 11.3% growth from the figure reported in the year-ago quarter.

The consensus estimate for LULU’s earnings is pegged at $5.81 a share, implying a 9.8% increase from the year-earlier quarter. LULU has a trailing four-quarter earnings surprise of 6.7%, on average.

Royal Caribbean Cruises (RCL Quick QuoteRCL - Free Report) currently has an Earnings ESP of +0.15% and a Zacks Rank of 2. RCL is likely to register top and bottom-line growth when it reports fourth-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.8 billion, indicating 13.2% growth from the figure reported in the year-ago quarter.

The consensus estimate for Royal Caribbean’s earnings is pegged at $1.50 per share, implying a 20% increase from the year-earlier quarter. The consensus mark for earnings has moved up a penny in the past seven days.

Fox (FOXA Quick QuoteFOXA - Free Report) currently has an Earnings ESP of +5.86% and a Zacks Rank of 2. FOXA is likely to register top and bottom-line growth when it reports third-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4.9 billion, indicating 15.4% growth from the figure reported in the year-ago quarter.

The consensus estimate for FOXA’s earnings is pegged at 64 cents per share, implying an 88.2% growth from the year-earlier quarter. The consensus mark for earnings has been unchanged in the past 30 days.